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Overview
The ETC Securities are designed to
provide investors with exposure to a metal without having to take
physical delivery of the metal. The underlying "Metal" for the ETC Securities is:
platinum.
Each ETC Security relates to a
specific amount in weight of Metal, specified in the Final Terms,
known as the "Metal Entitlement
per ETC Security".
On any particular day, the ETC
Security can be viewed as giving an exposure to that ------amount
of Metal as the amount payable in respect of each ETC Security and
the value per ETC Security (the "Value per ETC Security") is linked to
the value of the Metal, subject to an adjustment for any foreign
exchange gains or losses between the Metal Currency (as defined
below) and the Specified Currency. In order to back its obligations
under the ETC Securities, the Issuer will seek to hold enough Metal
to meet its obligations under the ETC Securities. The precise
amount it holds at any time may be more or less than the aggregate
amount of the Metal Entitlement per ETC Security to reflect the
periodic payment of product fees and an adjustment for any foreign
exchange gains or losses. The proceeds from the disposal of the
underlying Metal, plus any interest received on the proceeds of
such disposal less any negative interest, net of any deductions
(and converted into the Specified Currency at the rate the Metal
Agent determines would be obtainable at the time of conversion
which shall be on or about the day of such sale (or, if such day is
not an FX business day, the immediately following FX business day,
and which may take into account a bid/offer spread quoted by a
dealer), will equal the amount due under the ETC Securities
(subject to certain minimum amounts owed).
The Metal will be held for the
Issuer by JPMorgan Chase Bank, N.A. (or any successor or
replacement) (the "Secured Account
Custodian") and will be generally held on an "allocated"
basis. This means that specifically identifiable physical items of
the Metal are allocated to the Issuer and are segregated from metal
held for other clients of the custodian. However, for operational
purposes, small amounts of Metal may be held on an "unallocated"
basis. This means that the Secured Account Custodian maintains an
account in the name of the Issuer which shows them as being
entitled to delivery of a particular amount of the Metal but
without specific physical metal having been identified. Where Metal
is held on an "unallocated" basis the right to delivery is a purely
contractual right and, as such, the Issuer is an unsecured creditor
of the custodian and is exposed to the credit risk of the
custodian.
Security
The obligations of the Issuer under
the ETC Securities will be secured pursuant to a security deed
governed by the laws of Ireland and a security deed governed by
English law by security interests over the rights of the Issuer
under the agreements entered into by it in respect of the ETC
Securities and any underlying Metal. The assets and property that
are the subject of such security interests are known as
"Secured Property" for this
Series. Securityholders will not, by reason of holding such Series,
have any claim against the Secured Property with respect to any
other series of ETC Securities. The security will become
enforceable if payment of the redemption amount in respect of such
ETC Securities is not made when due on the Scheduled Maturity Date
or the Scheduled Early Redemption Date (defined below) (if
applicable).
Final Redemption
Amount
On the Scheduled Maturity Date, each
ETC Security will become due and payable at an amount (the
"Final Redemption Amount")
equal to the greater of (i) the Final Metal Redemption Amount
(defined below) plus the Specified Interest Amount (defined below)
and (ii) 10 per cent. of the issue price per ETC Security as at the
series issue date (the "Minimum
Debt Principal Amount") plus the
Specified Interest Amount.
The "Final Metal Redemption Amount" is
determined by multiplying (i) the Metal Entitlement per ETC
Security as at the Final Redemption Valuation Date (defined below);
and (ii) the volume-weighted average prices per metal unit at which
the Metal Agent (defined below) is able to sell the underlying
Metal ("Average Metal Sale
Price") during the Final Redemption Disposal Period (defined
below).
The "Final Redemption Disposal Period" is
the period which lasts for the number of days specified in the
Final Terms, which shall start from (but exclude) the date falling
four non-disrupted business days following the Final Redemption
Valuation Date.
"Final Redemption Valuation Date" is the
date specified in the Final Terms or, if such day is not a business
day, the next following business day.
"Specified Interest Amount" is the
amount of interest per ETC Security equal to that ETC Security's
pro rata share of the
amount of interest which has accrued (if any) on the proceeds of
realisation of the underlying Metal deposited into the Series Cash
Account (defined below) during or relating to the relevant
redemption disposal period. Whilst interest may accrue at a
positive, zero or negative rate on the Series Cash Account, the
Specified Interest Amount is subject to a minimum of zero and any
negative interest shall instead be deducted from the proceeds of
the sale of the underlying Metal.
Early Redemption
Amount
If any of the early redemption
events occur, each ETC Security will become due and payable at an
amount (the "Early Redemption
Amount") equal to the greater of (i) the Early Metal
Redemption Amount (defined below) plus the Specified Interest
Amount and (ii) the Minimum Debt Principal Amount plus the
Specified Interest Amount.
The "Early Metal Redemption Amount" is
determined by multiplying (i) the Metal Entitlement per ETC
Security as at the Early Redemption Valuation Date (defined below);
and (ii) the Average Metal Sale Price during the Early Redemption
Disposal Period (defined below).
The "Early Redemption Disposal Period" is
the period which lasts for the number of days specified in the
Final Terms, which shall start from (but exclude) the date falling
four non-disrupted business days following the Early Redemption
Valuation Date, save where the Issuer has suspended the
determination of the value and Metal Entitlement per ETC Security
and no replacement Series Counterparty is appointed, in which case
the date falling four non-disrupted business days following the end
of such suspension period.
The "Scheduled Early Redemption Date" is the
8th business day following the Early Redemption Disposal
Period.
The "Early Redemption Valuation Date" is the
date of the occurrence of an early redemption event or the date on
which the Trustee gives notice that, due to the occurrence of an
event of default, the ETC Securities shall become due and payable
at their Early Redemption Amount on the Scheduled Early Redemption
Date, or, if such day is not a business day, the next following
business day.
There can be no assurance that the
Final Redemption Amount or Early Redemption Amount, as applicable,
will be greater than or equal to the amount invested by any
securityholder.
If the Final Metal Redemption Amount
or Early Redemption Amount, as applicable, plus the Specified
Interest Amount falls below the Minimum Debt Principal Amount plus
the Specified Interest Amount, then due to the limited recourse
nature of the ETC Securities, securityholders are unlikely to
receive payment of the Final Redemption Amount or Early Redemption
Amount, as applicable, in full and may receive zero.
The Final Redemption Amount or Early
Redemption Amount per ETC Security, as applicable, will be
determined by reference to the Average Metal Sale Price of the
underlying Metal held in respect of the ETC Securities sold during
the Final Redemption Disposal Period or Early Redemption Disposal
Period, as applicable, by JPMorgan Chase Bank N.A. (or any
successor or replacement) as "Metal Agent", net of associated
deductions and taxes. The Issuer will, on or prior to the Scheduled
Maturity Date or Scheduled Early Redemption Date, publish the
determination of the Final Redemption Amount or Early Redemption
Amount, as applicable, (which shall include publication of the
price, volume and date of each sale of underlying Metal during the
relevant redemption disposal period, including information on any
fees, deductions and/or taxes imposed on such sale, and the
determination of the Average Metal Sale Price) on the website
maintained on behalf of the Issuer at www.etf.dws.com (or such
other website notified by the Issuer for the ETC Securities from
time to time).
The Metal Agent will pay the
aggregate proceeds of such disposals (converted, if necessary, into
the currency of the ETC Securities) to the cash account for the
Series (the "Series Cash
Account") maintained by J.P. Morgan SE as "Account Bank" as directed by the
Programme Administrator (defined below).
Interest
The ETC Securities will not pay
periodic interest. On early or final redemption of the ETC
Securities, a Specified Interest Amount may be payable by the
Issuer as part of the Final Redemption Amount or Early Redemption
Amount payable per ETC Security, as the case may be.
Foreign Exchange
Hedge
The foreign exchange hedge seeks to
reduce the exposure of the ETC Securities to exchange rate
fluctuations between the currency in which the ETC Securities are
denominated and the currency in which the Metal is quoted. The
currency in which the Metal is quoted is known as the "Metal Currency". It does this by
reflecting the effect of a notional forward sale of the Metal
Currency and a corresponding forward purchase of the currency in
which the ETC Securities are denominated. The foreign exchange
hedge may result in gains or losses to the Issuer. Such gains or
losses will result in an increase or decrease in the Metal
Entitlement per ETC Security and will therefore impact the Value
per ETC Security. The Metal Currency for the Series is: U.S.
dollar.
The foreign exchange hedge is
entered into by the Issuer with J.P. Morgan SE as the "Series Counterparty". In such role, it
enters into a balancing agreement with the Issuer in relation to
the ETC Securities (the "Balancing
Agreement") which provides for deliveries of metal to or by
the Issuer to reflect an adjustment for any foreign exchange gain
or loss realised by the Issuer.
Where there are foreign exchange
gains and the Metal Entitlement per ETC Security consequently
increases, the Series Counterparty will deliver additional Metal
equivalent to such increase. Where there are losses and the Metal
Entitlement per ETC Security consequently decreases, the Issuer
will be required to deliver Metal equivalent to such decrease to
the Series Counterparty under the Balancing Agreement. All such
payments will be in the form of Metal and will settle no later than
the second business day after the relevant valuation
day.
Fees
The ETC Securities are subject to a
product fee (which comprises a foreign exchange hedging fee) that
accrues on a daily basis. Accrued product fee is paid by a daily
reduction in the Metal Entitlement per ETC Security which, as a
result of such reduction, operates as a charge on securityholders.
The Issuer will, using the Metal Agent, periodically realise Metal
equal to such charge and the proceeds will be credited to the
Series Cash Account maintained by the Account Bank in relation to
the ETC Securities and used by the Issuer to pay the product fee to
the Programme Administrator in accordance with the Programme
Administrator Agreement. The Programme Administrator
Agreement provides that the Programme Administrator will use the
product fee in relation to each Series of ETC Securities to pay on
behalf of the Issuer the costs of the Programme (as set out in the
schedule to the Programme Administrator Agreement) relating to such
Series of ETC Securities and the Issuer more generally.
Events of Default and Early
Redemption Events
The ETC Securities may become due
and payable prior to their Scheduled Maturity Date in connection
with the occurrence of any of the following events:
(i)
certain legal or regulatory changes occur in relation to the Issuer
and the Issuer gives a notice of redemption;
(ii)
the Balancing Agreement is terminated in connection with an event
of default, a termination event or the valid delivery of an
optional termination notice under such Balancing Agreement (and to
the extent the optional termination notice is delivered by the
Series Counterparty, no replacement is put in place (as discussed
further below under "Optional
Termination"));
(iii)
any agent in
relation to the ETC Securities resigns or their appointment is
terminated and the Issuer gives notice that no successor or
replacement has been appointed within a 60 calendar day
period;
(iv) the
Value per ETC Security is less than or equal to 20 per cent. of the
issue price as at the series issue date for two consecutive
valuation days and the determination agent gives the relevant
notice;
(v)
the Issuer will, or there is a substantial likelihood that it will,
be required to make a payment in respect of VAT or be required to
account for VAT in respect of a delivery of Metal from or to an
authorised participant (whether or not such VAT is
recoverable);
(vi) an
Issuer Call Redemption Event occurs (as discussed further below
under "Issuer Call Redemption
Event");
(vii) the
Issuer becomes entitled to serve a VAT redemption event notice or a
termination notice under the Balancing Agreement following a tax
event or illegality under the Balancing Agreement and the Trustee
gives the relevant notice as directed by the requisite number of
securityholders; or
(viii) an
event of default occurs under the ETC Securities. These include
certain breaches by the Issuer of its obligations that are not
cured within the applicable cure period and certain insolvency
events with respect to the Issuer.
Issuer Call Redemption
Event
The Issuer may elect to redeem the
ETC Securities early on giving not less than 30 calendar days'
notice to securityholders (an "Issuer Call Redemption
Event").
Optional
Termination
The Issuer or the Series
Counterparty may, on giving not less than 30 calendar days' prior
notice, terminate the Balancing Agreement. Termination of the
Balancing Agreement may result in an early redemption of the ETC
Securities if such notice is given by the Issuer, or, in respect of
an optional termination notice validly delivered by the Series
Counterparty, a replacement Series Counterparty is not appointed
within the time specified the terms and conditions.
Limited Recourse and
Ranking
The ETC Securities will rank equally
amongst themselves. The rights of securityholders are limited in
recourse to the Secured Property. As such, once the Secured
Property has been realised and the net proceeds distributed, none
of the parties or anyone acting on their behalves may take further
steps against the Issuer or its directors, officers, members or
administrator to recover any further sum and no debt will be owed
by the Issuer in respect of such sum. Any proceeds of the Secured
Property will be applied in accordance with the priorities of
payments set out in the terms and conditions and, therefore, the
rights of securityholders will rank in accordance therewith. As a
result of such provisions, the securityholders may not receive in
full the final redemption amount or early redemption amount payable
in respect of an ETC Security.
Withholding
Tax
All payments in respect of the ETC
Securities shall be made net of and after allowance for any
withholding or deduction for, or on account of, any taxes. In the
event that any withholding or deduction for, or on account of, any
taxes applies to payments in respect of the ETC Securities,
securityholders will be subject to such tax or deduction and shall
not be entitled to receive amounts to compensate for any such tax
or deduction. No event of default will occur as a result of any
such withholding or deduction.
Governing
Law
The ETC Securities will be governed
by the laws of Ireland. There will be two security deeds relating
to the ETC Securities; one will be governed by the laws of Ireland
and the other will be governed by English law.
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