Filed Pursuant to Rule 424(b)(3)
Registration
No 333-276531
PROSPECTUS
GraniteShares
Platinum Trust*
*
Principal U.S. Listing Exchange: NYSE Arca
GraniteShares
Platinum Trust (the “Trust”) issues GraniteShares Platinum Shares (“Shares”), which represent units of fractional
undivided beneficial interest in the net assets of the Trust. The Trust seeks to reflect generally the performance of the price of platinum.
The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. GraniteShares LLC (the “Sponsor”)
is the sponsor of the Trust; The Bank of New York Mellon (the “Trustee”) is the trustee of the Trust; and ICBC Standard Bank
Plc (the “Custodian”) is the custodian of the Trust. The Trust intends to issue additional Shares on a continuous basis.
The
Shares may be purchased from the Trust only in one or more blocks of 50,000 Shares (a block of 50,000 Shares is called a “Basket”).
The Trust will issue Shares in Baskets to certain authorized participants (“Authorized Participants”) on an ongoing basis,
as described in “Plan of Distribution.” Baskets will be offered continuously at the net asset value for 50,000 Shares on
the day that an order to create a Basket is accepted by the Trustee. The net asset value per Share (“NAV”) is calculated
by taking the current price of the Trust’s total assets (determined with respect to platinum on the LBMA Platinum Price PM), subtracting
any liabilities, and dividing by the total number of Shares outstanding. The offering of the Trust’s Shares is a “best efforts”
offering, which means that the Authorized Participants are not required to purchase a specific number or dollar amount of Shares. Authorized
Participants will not receive from the Sponsor, the Trust or any affiliates any fee or other compensation in connection with the offering
of the Shares.
The
Shares trade on the NYSE Arca (the “Exchange”) under the symbol “PLTM.” The Shares are sold to the public at
varying prices to be determined by reference to, among other considerations, the price of platinum and the trading price of the Shares
on the Exchange at the time of each sale. The market price of the Shares may be different from the NAV and may trade at a discount or
premium. Investors who decide to buy or sell Shares of the Trust will place their trade orders through their brokers and may incur customary
brokerage commissions and charges.
Except
when aggregated in Baskets, the Shares are not redeemable securities. Baskets are only redeemable by Authorized Participants.
Investing
in the Shares involves significant risks. See “Risk Factors” beginning on page 8.
Neither
the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of the securities
offered in this prospectus, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
The
Shares are neither interests in nor obligations of the Sponsor or the Trustee. The Trust is not an investment company registered under
the Investment Company Act of 1940, as amended. The Trust is not a commodity pool for purposes of the Commodity Exchange Act of 1936,
as amended (the “Commodity Exchange Act”).
As
of January 23, 2024, there were 4,100,000 Shares outstanding.
The
date of this prospectus is January 23, 2024.
Table
of Contents
Statement
Regarding Forward-Looking Statements
This
prospectus includes statements which relate to future events or future performance. In some cases, you can identify such forward-looking
statements by terminology such as “may,” “will,” “should,” “expect,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative
of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this prospectus
that address activities, events or developments that may occur in the future, including such matters as changes in commodity prices and
market conditions (for platinum and the Shares), the Trust’s operations, the Sponsor’s plans and references to the Trust’s
future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results
may differ materially. These statements are based upon certain assumptions and analyses made by the Sponsor on the basis of its perception
of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the
circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however,
is subject to a number of risks and uncertainties, including the special considerations discussed in this prospectus, general economic,
market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or
regulatory bodies, and other world economic and political developments. See “Risk Factors.” Consequently, all the forward-looking
statements made in this prospectus are qualified by these cautionary statements, and there can be no assurance that the actual results
or developments the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences
to, or have the expected effects on, the Trust’s operations or the value of the Shares. Moreover, neither the Sponsor, nor any
other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Neither the Trust nor the Sponsor
undertakes an obligation to publicly update or conform to actual results any forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law.
Prospectus
Summary
The
following is a summary of this prospectus, and while it contains material information about the Trust and the Shares, it does not
contain or summarize all of the information about the Trust and the Shares contained in this prospectus that is material and that
may be important to you. You should read this entire prospectus, including “Risk Factors” beginning on page 8 and any
material incorporated by reference herein before making an investment decision about the Shares. Capitalized terms not defined in
this prospectus have the meaning set forth in the Glossary.
Trust
Structure, the Sponsor, the Trustee and the Custodian
The
Trust was formed in 2018 when an initial deposit of platinum was made in exchange for the issuance of two Baskets. The purpose of the
Trust is to own platinum transferred to the Trust in exchange for Shares issued by the Trust. Each Share represents a unit of fractional
undivided beneficial interest in the net assets of the Trust. The assets of the Trust consist primarily of platinum held by the Custodian
on behalf of the Trust. However, there may be situations where the Trust will unexpectedly hold cash. For example, a claim may arise
against a third party, which is settled in cash. In situations where the Trust unexpectedly receives cash or other assets, no new Shares
will be issued until after the record date for the distribution of such cash or other property has passed.
The
Sponsor of the Trust is GraniteShares LLC, a Delaware limited liability company. The Shares are not obligations of, and are not guaranteed
by the Sponsor, or any of its subsidiaries or affiliates.
The
Trust is governed by the provisions of the Depositary Trust Agreement (as amended from time to time, the “Trust Agreement”)
executed on January 11, 2018 by the Sponsor and the Trustee.
The
Trust issues Shares only in blocks of 50,000 or integral multiples thereof. Baskets of Shares may be redeemed by the Trust in exchange
for the amount of platinum corresponding to their redemption value. Individual Shares are not redeemed by the Trust, but are listed and
trade on the Exchange under the symbol “PLTM.” The Trust seeks to reflect generally the performance of the price of platinum.
The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. The material terms of the Trust
are discussed in greater detail under the section “Description of the Shares and the Trust Agreement.” The Trust is not a
registered investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), and is
not required to register under the Investment Company Act. The Trust is not a commodity pool for purposes of the Commodity Exchange Act.
The
Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering
in the United States and the listing of the Shares on the Exchange. The Sponsor will not exercise day-to-day oversight over the Trustee
or the Custodian. The Sponsor has developed a marketing plan for the Trust, prepares marketing materials regarding the Shares of the
Trust, and executes the marketing plan of the Trust on an ongoing basis. The Sponsor has agreed to assume the following expenses incurred
by the Trust: the Trustee’s fee (the “Trustee’s Fee”) and its ordinary out-of-pocket expenses, the Custodian’s
fee (the “Custodian’s Fee”) and its reimbursable expenses, the Exchange listing fees, SEC registration fees, marketing
expenses, printing and mailing costs, audit fees and expenses and up to $500,000 per annum in legal fees and expenses.
The
Trustee is The Bank of New York Mellon and the Custodian is ICBC Standard Bank Plc. The agreements between the Trustee and the Custodian
for the custody of the Trust’s platinum are governed by English law.
The
Trustee is responsible for the day-to-day administration of the Trust. The responsibilities of the Trustee include (1) processing orders
for the creation and redemption of Baskets; (2) coordinating with the Custodian the receipt and delivery of platinum transferred to,
or by, the Trust in connection with each issuance and redemption of Baskets; (3) calculating the net asset value of the Trust on each
business day; and (4) selling the Trust’s platinum as needed to cover the Trust’s expenses. For a more detailed description
of the role and responsibilities of the Trustee see “Description of the Shares and the Trust Agreement” and “The Trustee.”
The
Custodian is responsible for safekeeping the platinum owned by the Trust. The Custodian was selected by the Sponsor and, at the direction
of the Sponsor, appointed by the Trustee, and is responsible to the Trustee under the Trust’s platinum custody agreements. The
general role and responsibilities of the Custodian are further described in “The Custodian.”
Trust
Objective
The
objective of the Trust is for the value of the Shares to reflect, at any given time, the value of the assets owned by the Trust at that
time less the Trust’s accrued expenses and liabilities as of that time. The Shares are intended to constitute a simple and cost-effective
means of making an investment similar to an investment in platinum. An investment in allocated physical platinum bullion requires expensive
and sometimes complicated arrangements in connection with the assay, transportation and warehousing of the metal. Traditionally, such
expense and complications have resulted in investments in physical platinum bullion being efficient only in amounts beyond the reach
of many investors. The Shares have been designed to remove the obstacles represented by the expense and complications involved in an
investment in physical platinum bullion, while at the same time having an intrinsic value that reflects, at any given time, the price
of the assets owned by the Trust at such time less the Trust expenses and liabilities. Although the Shares are not the exact equivalent
of an investment in platinum, they provide investors with an alternative that allows a level of participation in the platinum market
through the securities market.
Market
Volatility and the War Between Russia and Ukraine
In
late February 2022, Russia invaded Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other countries
in the region and in the West. According to the 2022 PGM market report from Johnson Matthey, Russia produced 18.7 tonnes of platinum
in 2022, or approximately 11% of the world’s mining production. The responses of other countries and political bodies to Russia’s
actions, the larger overarching tensions, Ukraine’s military response, and the potential for wider conflict may increase financial
market volatility generally, have severe adverse effects on regional and global economic markets, and cause volatility in the price of
platinum and the share price of the Trust. The escalating conflict between Russia and Ukraine, including but not limited to, sanctions,
shipping disruptions, and collateral war damage could further disrupt the availability of platinum supplies.
Advantages
of investing in the Shares include:
The
Shares represent an interest in physical platinum owned by the Trust (other than up to a maximum of 192 ounces of platinum held in unallocated
form) and held in physical custody at the Custodian. Physical platinum of the Trust in the Custodian’s possession is not subject
to borrowing arrangements with third parties. Other than the platinum temporarily being held in an unallocated platinum account of the
Trust in connection with deposits and an amount of platinum comprising less than 192 ounces which may be held in the unallocated platinum
account of the Trust on an ongoing basis, the physical platinum of the Trust is not subject to counterparty or credit risks. This contrasts
with most other financial products that gain exposure to precious metals through the use of derivatives that are subject to counterparty
and credit risks.
| ● |
Backed
by platinum held by the Custodian on behalf of the Trust. |
The
Shares are backed primarily by allocated physical platinum bullion identified as the Trust’s property in the Custodian’s
books. The Trust arrangements contemplate that no Shares can be issued unless the corresponding amount of platinum has been deposited
into the Trust. Once deposited into the Trust, platinum is only removed from the Trust if (i) sold to pay Trust expenses (such as the
Sponsor’s Fee and any other expenses not assumed by the Sponsor) or liabilities to which the Trust may be subject, or (ii) transferred
from the Trust’s account to an Authorized Participant’s account in exchange for one or more Baskets of Shares surrendered
for redemption.
| ● |
Ease
and flexibility of investment. |
Retail
investors may purchase and sell Shares through traditional brokerage accounts. Because the amount of platinum corresponding to a Share
is significantly less than the minimum amounts of physical platinum bullion that are commercially available for investment purposes,
the cash outlay necessary for an investment in Shares should be less than the amount required for currently existing means of investing
in physical platinum bullion. Shares are eligible for margin accounts.
| ●
|
Relatively
cost efficient. |
Although
the return, if any, of an investment in the Shares is subject to the additional expenses of the Trust, including the Sponsor’s
Fee and other costs and expenses not assumed by the Sponsor which would not be incurred in the case of a direct investment in platinum,
the Shares may represent a cost-efficient alternative for investors not otherwise in a position to participate directly in the market
for allocated physical platinum bullion, because the expenses involved in an investment in allocated physical platinum through the Shares
are dispersed among all holders of Shares.
Summary
Risk Factors
An
investment in the Trust involves risks and uncertainties described in the section below entitled “Risk Factors” and elsewhere
in this prospectus. You should carefully read the “Risk Factors” section of this prospectus for a discussion of factors that
you should consider before deciding to invest in the Shares. Some of these risks and uncertainties include:
| ● | Because
the Shares are created to reflect the price of the platinum held by the Trust, the market
price of the Shares will be as unpredictable as the price of platinum has historically been.
This creates the potential for losses, regardless of whether you hold Shares for the short-,
mid- or long-term. |
| ● | Future
governmental decisions may have significant impact on the price of platinum, which may result
in a significant decrease or increase in the value of the net assets and the net asset value
of the Trust. |
| ● | An
investment in the Trust may be adversely affected by competition from other methods of investing
in platinum. |
| ● | Because
the Trust is not a diversified investment, it may be more volatile than other investments. |
| ● | As
an owner of Shares, you will not have the rights normally associated with ownership of other
types of shares. |
| ● | The
value of the Shares will be adversely affected if any services provided to the Trust by the
Sponsor, the Custodian or the Trustee are suddenly or unexpectedly terminated. |
| ● | The
Sponsor and its affiliates manage other funds, including those that invest in physical gold
bullion or other precious metals, and conflicts of interest may occur, which may reduce the
value of the net assets of the Trust, the NAV and the trading price of the Shares. |
| ● | War
and other geopolitical events, including but not limited to the war between Russia and Ukraine,
outbreaks or public health emergencies (as declared by the World Health Organization), the
continuation or expansion of war or other hostilities, or a prolonged government shutdown
may cause volatility in the price of platinum due to the importance of a country or region
to the platinum market, market access restrictions imposed on some local platinum producers
and refiners, potential impacts to global transportation and shipping and other supply chain
disruptions. These events are unpredictable and may lead to extended periods of price volatility. |
Principal
Offices
The
Sponsor’s office is located at 222 Broadway, 21st Floor, New York, New York 10038 and its phone number is (844) 476
8747. The Trustee has a Trust office at 240 Greenwich Street New York, NY 10286. The Custodian’s office is located at 20 Gresham
Street, London, EC2V 7JE, United Kingdom.
The
Offering
| Offering |
|
The
Shares represent units of fractional undivided beneficial interest in the net assets of the Trust. |
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| Use
of Proceeds |
|
Proceeds
received by the Trust from the issuance and sale of Baskets and the Shares (as described on the front page of this prospectus) will
consist of platinum deposits and, possibly from time to time, cash. Pursuant to the Trust Agreement, during the life of the Trust
such proceeds will only be (1) held by the Trust, (2) distributed to Authorized Participants in connection with the redemption of
Baskets, or (3) disbursed or sold as needed to pay the Trust’s ongoing expenses. |
| Exchange
Symbol |
|
PLTM |
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| CUSIP |
|
38748T
103 |
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| Creation
and Redemption |
|
The
Trust will issue and redeem Baskets of Shares on a continuous basis. Baskets of Shares will only be issued or redeemed in exchange
for an amount of platinum determined by the Trustee on each day that the Exchange is open for regular trading. No Shares will be
issued unless the Custodian has allocated to the Trust’s account the corresponding amount of platinum. Initially, a Basket
required delivery of 1,500 Ounces of platinum. The amount of platinum necessary for the creation of a Basket, or to be received upon
redemption of a Basket, has decreased over the life of the Trust, and will continue to decrease, due to the payment or accrual of
fees and other expenses or liabilities payable by the Trust. Baskets may be created or redeemed only by Authorized Participants,
who will pay the Trustee a transaction fee for each order to create or redeem Baskets. See “Description of the Shares and the
Trust Agreement” for more details. |
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| Net
Asset Value |
|
The
net asset value of the Trust will be obtained by subtracting the Trust’s expenses and liabilities on any day from the value
of the platinum owned by the Trust on that day; the NAV per Share will be obtained by dividing the net asset value of the Trust on
a given day by the number of Shares outstanding on that day. On each day on which the Exchange is open for regular trading, the Trustee
will determine the net asset value of the Trust and the NAV per Share as promptly as practicable after 4:00 p.m. (New York time).
The Trustee will value the Trust’s platinum on the basis of LBMA Platinum Price PM. If there is no LBMA Platinum Price PM on
any day, the Trustee is authorized to use the LBMA Platinum Price AM announced on that day. If neither price is available for that
day, the Trustee will value the Trust’s platinum based on the most recently announced LBMA Platinum Price PM or LBMA Platinum
Price AM. If the Sponsor determines that such price is inappropriate to use, the Sponsor will identify an alternate basis for evaluation
to be employed by the Trustee. Further, the Sponsor may instruct the Trustee to use on an on-going basis a different publicly available
price which the Sponsor determines to fairly represent the commercial value of the Trust’s platinum. See “The Trust—Valuation
of Platinum; Computation of Net Asset Value.” |
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| Trust
Expenses |
|
The
Trust’s only ordinary recurring expense is expected to be the remuneration due to the Sponsor (the “Sponsor’s Fee”).
In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume the following expenses of the Trust: the Trustee’s
Fee and its ordinary out-of-pocket expenses, the Custodian’s Fee and its reimbursable expenses, the Exchange listing fees,
SEC registration fees, marketing expenses, printing and mailing costs, audit fees and expenses and up to $500,000 per annum in legal
fees and expenses. The Sponsor’s Fee is accrued daily at an annualized rate equal to 0.50% of the net asset value of the Trust
and is payable monthly in arrears. The Sponsor may, at its discretion and from time to time, waive all or a portion of the Sponsor’s
Fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create
no obligation to waive any such fees during any period not covered by the waiver. Presently, the Sponsor does not intend to waive
any part of its fee. The Trustee from time to time may sell platinum in such quantities as may be necessary to permit the payment
of the Sponsor’s Fee and other Trust expenses and liabilities not assumed by the Sponsor. The Trustee will endeavor to sell
platinum at such times and in the smallest amounts required to permit such payments as they become due, it being the intention to
avoid or minimize the Trust’s holdings of assets other than platinum. Accordingly, the amount of platinum to be sold may vary
from time to time depending on the level of the Trust’s expenses and liabilities and the market price of platinum. See “The
Trust—Trust Expenses” and “Description of the Shares and the Trust Agreement—Trust Expenses and Platinum
Sales.” |
| Federal
Income Tax Considerations |
|
Owners
of Shares are treated, for U.S. federal income tax purposes, as if they owned a corresponding share of the assets of the Trust. They
are also viewed as if they directly received a corresponding share of any income of the Trust, or as if they had incurred a corresponding
share of the expenses of the Trust. Consequently, each sale of platinum by the Trust constitutes a taxable event to owners of beneficial
interests in the Shares (“Shareholders”). See “United States Federal Income Tax Consequences—Taxation of
U.S. Shareholders” and “ERISA and Related Considerations.” |
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|
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| Voting
Rights |
|
Shareholders
have the right to vote only in limited circumstances, for example, causing the Trustee to cure a material breach by the Trustee under
the Trust Agreement, or requiring the Trustee to terminate the Trust Agreement. See “Description of the Shares and the Trust
Agreement—Voting Rights.” |
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|
|
Suspension
of Issuance,
Transfers
and Redemptions |
|
The
Trustee may, and upon direction of the Sponsor will, generally suspend the delivery of Shares against deposits of platinum or the
registration or transfer of Shares or refuse a particular delivery or transfer (i) during any period when the Trustee’s transfer
books are closed, (ii) if the Custodian has informed the Trustee and the Sponsor that it is unable to allocate platinum to the Trust
Allocated Account or (iii) if any such action is otherwise deemed necessary or advisable by the Sponsor for any reason in its sole
discretion. Redemptions may be suspended only (i) during any period in which regular trading on the Exchange is suspended or restricted,
or the Exchange is closed, or (ii) during an emergency as a result of which delivery, disposal or evaluation of platinum is not reasonably
practicable. See “Description of the Shares and the Trust Agreement—Redemption of Baskets.” |
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| Limitation
on Liability |
|
The
Sponsor and the Trustee: |
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● |
are
only obligated to take the actions specifically set forth in the Trust Agreement without gross negligence, willful misconduct or
bad faith; |
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are
not liable for the exercise of discretion permitted under the Trust Agreement; and |
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have
no obligation to prosecute any lawsuit or other proceeding on behalf of the Shareholders or any other person. |
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See
“Description of the Shares and the Trust Agreement—The Sponsor (Liability of the Sponsor and indemnification)”
and “The Trustee (Limitation on Trustee’s liability).” |
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| Termination
Events |
|
The
Trustee will terminate the Trust Agreement if: |
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|
● |
the
Trustee is notified that the Shares are delisted from the Exchange and are not approved for listing on another national securities
exchange within five Business Days of their delisting; |
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|
● |
Shareholders
acting in respect of at least 75% of the outstanding Shares notify the Trustee that they elect to terminate the Trust; |
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● |
60
days have elapsed since the Trustee notified the Sponsor of the Trustee’s election to resign or since the Sponsor removed the
Trustee, and a successor trustee has not been appointed and accepted its appointment; |
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● |
any
sole Custodian then acting resigns or is removed and no successor custodian has been employed within 60 days of such resignation
or removal; |
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● |
the
SEC determines that the Trust is an investment company under the Investment Company Act, and the Trustee has actual knowledge of
that determination; |
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the
U.S. Commodity Futures Trading Commission (the “CFTC”) determines that (i) the Trust is a commodity pool under the Commodity
Exchange Act; and/or (ii) the Shares constitute “commodity interests”, as defined by the CFTC in CFTC Regulation 1.3(yy)
and the Trustee has actual knowledge of that determination; |
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● |
the
aggregate market capitalization of the Trust, based on the closing price for the Shares, is less than $50 million (as adjusted for
inflation by reference to the U.S. Consumer Price Index) at any time more than 18 months after the Trust’s formation, and the
Trust receives, within 6 months after the last trading date on which such capitalization was less than $50 million, notice from the
Sponsor of its decision to terminate the Trust; |
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● |
the
Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust under the United States Internal Revenue Code of
1986, as amended (the “Code”), or under any comparable provision of any other jurisdiction where such treatment is sought,
and the Trustee receives notice that the Sponsor has determined that the termination of the Trust is advisable; or |
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|
● |
60
days have elapsed since DTC ceases to act as depository with respect to the Shares and the Sponsor has not identified another depository
which is willing to act in such capacity. |
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If
the Sponsor resigns without appointing a successor sponsor, or is dissolved or has ceased to exist as a legal entity for any reason
or is deemed to have resigned because (1) it fails to undertake or perform, or becomes incapable of undertaking or performing, any
of the duties required by the Trust Agreement, and such failure or incapacity is not cured, or (2) the Sponsor is adjudged bankrupt
or insolvent, or a receiver of the Sponsor or of its property is appointed, or a trustee or liquidator or any public officer takes
charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then
the Trustee may, among other actions, terminate and liquidate the Trust. |
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|
See
“Description of the Shares and the Trust Agreement—Amendment and Termination.” After termination of the Trust,
the Trustee will deliver Trust property to Authorized Participants upon surrender and cancellation of Shares and, at least 60 days
after termination, may sell any remaining Trust property in a private or public sale, and hold the proceeds, uninvested and in a
non-interest bearing account, for the benefit of the holders who have not surrendered their Shares for cancellation. See “Description
of the Shares and the Trust Agreement—Amendment and Termination.” |
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| Authorized
Participants |
|
Baskets
may be created or redeemed only by Authorized Participants. Each Authorized Participant must be a registered broker-dealer or other
securities market participant, a participant in DTC, have entered into an agreement with the Trustee and the Sponsor (the “Authorized
Participant Agreement”) and have established a platinum unallocated account with the Custodian or another LBMA-approved platinum-clearing
bank. The Authorized Participant Agreement provides the procedures for the creation and redemption of Baskets and for the delivery
of platinum in connection with such creations or redemptions. A list of the current Authorized Participants can be obtained from
the Trustee or the Sponsor. |
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| Clearance
and Settlement |
|
The
Shares are issued in book-entry form only. Transactions in Shares clear through the facilities of DTC. Investors may hold their Shares
through DTC, if they are participants in DTC, or indirectly through entities that are participants in DTC. |
Summary
Financial Condition
As
of January 23, 2024 the net asset value of the Trust, which represents the value of the platinum deposited into the Trust, was
US$36,048,080 and the NAV per Share was US$8.79.
Risk
Factors
Before
making an investment decision, you should consider carefully the risks described below, as well as the other information included in
this prospectus.
The
value of the Shares relates directly to the value of the platinum held by the Trust and fluctuations in the price of platinum could materially
adversely affect an investment in the Shares.
The
Shares are designed to mirror as closely as possible the performance of the price of platinum bullion, and the value of the Shares relates
directly to the value of the platinum held by the Trust, less the Trust’s liabilities (including estimated accrued but unpaid expenses).
The price of platinum has fluctuated widely over the past several years. Several factors may affect the price of platinum, including:
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Global
platinum supply, which is influenced by such factors as production and cost levels in major platinum producing countries such as
South Africa. Recycling, autocatalyst demand, industrial demand, jewelry demand and investment demand are also important drivers
of platinum supply and demand; |
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Investors’
expectations with respect to the rate of inflation; |
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Currency
exchange rates; |
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Interest
rates; |
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Investment
and trading activities of hedge funds and commodity funds; and |
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Global
or regional political, economic or financial events and situations. |
In
addition, investors should be aware that there is no assurance that platinum will maintain its long-term value in terms of purchasing
power in the future. In the event that the price of platinum declines, the Sponsor expects the value of an investment in the Shares to
decline proportionately.
The
Shares may trade at a price which is at, above or below the NAV per Share and any discount or premium in the trading price relative to
the NAV per Share may widen as a result of non-concurrent trading hours between the NYSE Arca, London and COMEX.
The
Shares may trade at, above or below the NAV per Share. The NAV per Share fluctuates with changes in the market value of the Trust’s
assets. The trading price of the Shares fluctuates in accordance with changes in the NAV per Share as well as market supply and demand.
The amount of the discount or premium in the trading price relative to the NAV per Share may be influenced by non-concurrent trading
hours between the NYSE Arca and the major platinum markets. While the Shares trade on the NYSE Arca until 4:00 p.m. New York time, liquidity
in the market for platinum is reduced after the close of the major world platinum markets, including London and the COMEX. As a result,
during this time, trading spreads, and the resulting premium or discount on the Shares, may widen.
A
possible “short squeeze” due to a sudden increase in demand of Shares that largely exceeds supply may lead to price volatility
in the Shares.
Investors
may purchase Shares to hedge existing platinum exposure or to speculate on the price of platinum. Speculation on the price of platinum
may involve long and short exposures. To the extent aggregate short exposure exceeds the number of Shares available for purchase (for
example, in the event that large redemption requests by Authorized Participants dramatically affect Share liquidity), investors with
short exposure may have to pay a premium to repurchase Shares for delivery to Share lenders. Those repurchases may in turn, dramatically
increase the price of the Shares until additional Shares are created through the creation process. This is often referred to as a “short
squeeze.” A short squeeze could lead to volatile price movements in Shares that are not directly correlated to the price of platinum.
Purchasing
activity in the platinum market associated with the purchase of Baskets from the Trust may cause a temporary increase in the price of
platinum. This increase may adversely affect an investment in the Shares.
Purchasing
activity associated with acquiring the platinum required for deposit into the Trust in connection with the creation of Baskets may temporarily
increase the market price of platinum, which will result in higher prices for the Shares. Temporary increases in the market price of
platinum may also occur as a result of the purchasing activity of other market participants. Other platinum market participants may attempt
to benefit from an increase in the market price of platinum that may result from increased purchasing activity of platinum connected
with the issuance of Baskets. Consequently, the market price of platinum may decline immediately after Baskets are created. If the price
of platinum declines, the trading price of the Shares may also decline.
The
Shares and their value could decrease if unanticipated operational or trading problems arise.
There
may be unanticipated problems or issues with respect to the mechanics of the Trust’s operations and the trading of the Shares that
could have a material adverse effect on an investment in the Shares. In addition, although the Trust is not actively “managed”
by traditional methods, to the extent that unanticipated operational or trading problems or issues arise, the Sponsor’s past experience
and qualifications may not be suitable for solving these problems or issues.
Discrepancies,
disruptions or unreliability of the LBMA Platinum Price could impact the value of the Trust’s platinum and the market price of
the Shares.
The
Trustee values the Trust’s platinum pursuant to the LBMA Platinum Price. In the event that the LBMA Platinum Price proves to be
an inaccurate benchmark, or the LBMA Platinum Price varies materially from the prices determined by other mechanisms for valuing platinum,
the value of the Trust’s platinum and the market price of the Shares could be adversely impacted. Any future developments in the
LBMA Platinum Price, to the extent it has a material impact on the LBMA Platinum Price, could adversely impact the value of the Trust’s
platinum and the market price of the Shares. It is possible that electronic failures or other unanticipated events may occur that could
result in delays in the announcement of, or the inability of the benchmark to produce, the LBMA Platinum Price on any given date. Furthermore,
any actual or perceived disruptions that result in the perception that the LBMA Platinum Price is vulnerable to actual or attempted manipulation
could adversely affect the behavior of market participants, which may have an effect on the price of platinum. If the LBMA Platinum Price
is unreliable for any reason, the price of platinum and the market price for the Shares may decline or be subject to greater volatility.
The
amount of platinum represented by each Share will decrease over the life of the Trust due to the sales of platinum necessary to pay the
Sponsor’s Fee and Trust expenses. Without increases in the price of platinum sufficient to compensate for that decrease, the price
of the Shares will also decline and you will lose money on your investment in Shares.
Although
the Sponsor has agreed to assume all organizational and certain ordinary expenses incurred by the Trust, not all Trust expenses have
been assumed by the Sponsor. For example, any taxes and other governmental charges that may be imposed on the Trust’s property
will not be paid by the Sponsor. As part of its agreement to assume some of the Trust’s ordinary administrative expenses, the Sponsor
has agreed to pay legal fees and expenses of the Trust not in excess of $500,000 per annum. Any legal fees and expenses in excess of
that amount will be the responsibility of the Trust.
Because
the Trust does not have any income, it needs to sell platinum to cover expenses not assumed by the Sponsor. The Trust may also be subject
to other liabilities (for example, as a result of litigation) which have also not been assumed by the Sponsor. The only source of funds
to cover those liabilities will be sales of platinum held by the Trust. Even if there are no expenses other than those assumed by the
Sponsor, and there are no other liabilities of the Trust, the Trustee will still need to sell platinum to pay the Sponsor’s Fee.
The result of these sales is a decrease in the amount of platinum represented by each Share. New deposits of platinum, received in exchange
for new Shares issued by the Trust, do not reverse this trend.
A
decrease in the amount of platinum represented by each Share results in a decrease in its price even if the price of platinum has not
changed. To retain the Share’s original price, the price of platinum has to increase. Without that increase, the lesser amount
of platinum represented by the Share will have a correspondingly lower price. If these increases do not occur, or are not sufficient
to counter the lesser amount of platinum represented by each Share, you will sustain losses on your investment in Shares.
An
increase in the Trust expenses not assumed by the Sponsor, or the existence of unexpected liabilities affecting the Trust, will force
the Trustee to sell larger amounts of platinum, and will result in a more rapid decrease of the amount of platinum represented by each
Share and a corresponding decrease in its value. The sale of the Trust’s platinum to pay expenses not assumed by the Sponsor or
unexpected liabilities affecting the Trust, at a time of low platinum prices could adversely affect the value of the Shares.
Crises
may motivate large-scale sales of platinum which could decrease the price of platinum and adversely affect an investment in the Shares.
The
possibility of large-scale distress sales of platinum in times of crisis may have a short-term negative impact on the price of platinum
and adversely affect an investment in the Shares. For example, the 2008 financial credit crisis resulted in significantly depressed prices
of platinum largely due to forced sales and deleveraging from institutional investors such as hedge funds and pension funds. Crises in
the future may impair platinum’s price performance which would, in turn, adversely affect an investment in the Shares.
Several
factors may have the effect of causing a decline in the prices of platinum and a corresponding decline in the price of Shares. Among
them:
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Autocatalysts,
automobile components that use platinum accounted for approximately 39% of the global demand in platinum for 2021. Should global
automobile sales decline, the demand for platinum may fall and impact the price of platinum and affect the price of the Shares. |
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A
significant increase in platinum hedging activity by platinum producers. Should there be an increase in the level of hedge activity
of platinum producing companies, it could cause a decline in world platinum prices, adversely affecting the price of the Shares. |
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A
significant change in the attitude of speculators, investors and central banks towards platinum. Should the speculative community
take a negative view towards platinum or central banking authorities determine to sell national platinum reserves, either event could
cause a decline in world platinum prices, negatively impacting the price of the Shares. |
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To
the extent existing exchange traded vehicles (“ETVs”) tracking platinum markets represent a significant proportion of
demand for physical platinum bullion, large redemptions of the securities of these ETVs could negatively affect physical platinum
bullion prices and the price and NAV of the Shares. |
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A
widening of interest rate differentials between the cost of money and the cost of platinum could negatively affect the price of platinum
which, in turn, could negatively affect the price of the Shares. |
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A
combination of rising money interest rates and a continuation of the current low cost of borrowing platinum could improve the economics
of selling platinum forward. This could result in an increase in hedging by platinum mining companies and short selling by speculative
interests, which would negatively affect the price of platinum. Under such circumstances, the price of the Shares would be similarly
affected. |
The
Trust is a passive investment vehicle. This means that the value of your Shares may be adversely affected by Trust losses that, if the
Trust had been actively managed, it might have been possible to avoid.
The
Trustee does not actively manage the platinum held by the Trust. This means that the Trustee does not sell platinum at times when its
price is high, or acquire platinum at low prices in the expectation of future price increases. It also means that the Trustee does not
make use of any of the hedging techniques available to professional platinum investors to attempt to reduce the risks of losses resulting
from price decreases. Any losses sustained by the Trust will adversely affect the value of your Shares.
The
price received upon the sale of Shares may be less than the value of the platinum represented by them.
The
result obtained by subtracting the Trust’s expenses and liabilities on any day from the price of the platinum owned by the Trust
on that day is the net asset value of the Trust which, when divided by the number of Shares outstanding on that day, results in the NAV
per Share.
Shares
may trade at, above or below their NAV. The NAV will fluctuate with changes in the market value of the Trust’s assets. The trading
prices of Shares will fluctuate in accordance with changes in their NAVs as well as market supply and demand. The amount of the discount
or premium in the trading price relative to the NAV may be influenced by non-concurrent trading hours between the major platinum markets
and the Exchange. While the Shares will trade on the Exchange until 4:00 p.m. (New York time), liquidity in the market for platinum will
be reduced after the close of the major world platinum markets, including London, Zurich and NYMEX. As a result, during this time, trading
spreads, and the resulting premium or discount on Shares, may widen.
The
Trust may be forced to sell platinum earlier than anticipated if expenses are higher than expected.
The
Trust may be forced to sell physical platinum earlier than anticipated if the Trust’s expenses are higher than estimated. Such
accelerated sales may result in a reduction of the NAV and the value of the Shares.
Because
the Trust is not a diversified investment, it may be more volatile than other investments.
An
investment in the Trust is not intended as a complete investment plan. Because the Trust principally only holds physical platinum, an
investment in the Trust may be more volatile than an investment in a more broadly diversified portfolio. Accordingly, the NAV may be
more volatile than another investment vehicle with a more broadly diversified portfolio and may fluctuate substantially over time. An
investment in the Trust may be deemed speculative and is not intended as a complete investment program; therefore investors should review
closely the objective and strategy, the investment and operating restrictions and the redemption provisions of the Trust as outlined
herein and familiarize themselves with the risks associated with an investment in the Trust.
The
liquidation of the Trust may occur at a time when the disposition of the Trust’s platinum will result in losses to investors in
Shares.
The
Trust may have a limited duration. If certain events occur, at any time, the Trustee will have to terminate the Trust. See “Description
of the Shares and the Trust Agreement—Amendment and Termination” for more information about the termination of the Trust,
including when events outside the control of the Sponsor, the Trustee or the Shareholders may prompt the Trust’s termination.
Upon
termination of the Trust, the Trustee will sell platinum in the amount necessary to cover all expenses of liquidation, and to pay any
outstanding liabilities of the Trust. The remaining platinum will be distributed among Authorized Participants surrendering Shares. Any
platinum remaining in the possession of the Trustee after 60 days may be sold by the Trustee and the proceeds of the sale will be held
by the Trustee until claimed by any remaining holders of Shares. Sales of platinum in connection with the liquidation of the Trust at
a time of low prices will likely result in losses, or adversely affect your gains, on your investment in Shares.
There
may be situations where an Authorized Participant is unable to redeem a Basket of Shares. To the extent the value of platinum decreases,
these delays may result in a decrease in the value of the platinum the Authorized Participant will receive when the redemption occurs,
as well as a reduction in liquidity for all Shareholders in the secondary market.
Although
Shares surrendered by Authorized Participants in Basket-size aggregations are redeemable in exchange for the underlying amount of platinum,
redemptions may be suspended during any period while regular trading on the Exchange is suspended or restricted, or in which an emergency
exists that makes it reasonably impracticable to deliver, dispose of, or evaluate platinum. If any of these events occurs at a time when
an Authorized Participant intends to redeem Shares, and the price of platinum decreases before such Authorized Participant is able again
to surrender Shares for redemption, such Authorized Participant will sustain a loss with respect to the amount that it would have been
able to obtain in exchange for the platinum received from the Trust upon the redemption of its Shares, had the redemption taken place
when such Authorized Participant originally intended it to occur. As a consequence, Authorized Participants may reduce their trading
in Shares during periods of suspension, decreasing the number of potential buyers of Shares in the secondary market and, therefore, decreasing
the price a Shareholder may receive upon sale.
The
liquidity of the Shares may also be affected by the withdrawal from participation of Authorized Participants.
In
the event that one or more Authorized Participants that have substantial interests in Shares withdraw from participation, the liquidity
of the Shares will likely decrease which could adversely affect the market price of the Shares and result in your incurring a loss on
your investment.
Under
the JOBS Act, emerging growth companies are also permitted to elect to delay adoption of new or revised accounting standards until companies
that are not subject to periodic reporting obligations are required to comply, if such accounting standards apply to non-reporting companies.
However, the Trust has chosen to opt out of this extended transition period for complying with new or revised accounting standards. Section
107 of the JOBS Act provides that the decision to opt out of the extended transition period for complying with new or revised accounting
standards is irrevocable.
The
Trust cannot predict if investors will find an investment in the Trust less attractive if it relies on these exemptions.
Authorized
Participants with large holdings may choose to terminate the Trust.
Holders
of 75% of the Shares have the power to terminate the Trust. This power may be exercised by a relatively small number of holders. If it
is so exercised, investors who wished to continue to invest in platinum through the vehicle of the Trust will have to find another vehicle,
and may not be able to find another vehicle that offers the same features as the Trust.
The
lack of an active trading market for the Shares may result in losses on your investment at the time of disposition of your Shares.
Although
Shares are listed for trading on the Exchange, you should not assume that an active trading market for the Shares will develop or be
maintained. If you need to sell your Shares at a time when no active market for them exists, such lack of an active market will most
likely adversely affect the price you receive for your Shares (assuming you are able to sell them).
If
the process of creation and redemption of Baskets encounters any unanticipated difficulties, the possibility for arbitrage transactions
intended to keep the price of the Shares closely linked to the price of platinum may not exist and, as a result, the price of the Shares
may fall or otherwise diverge from NAV.
If
the processes of creation and redemption of Shares (which depend on timely transfers of platinum to and by the Custodian) encounter any
unanticipated difficulties, potential market participants, such as the Authorized Participants and their customers, who would otherwise
be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price
of the Shares and the price of the underlying platinum may not take the risk that, as a result of those difficulties, they may not be
able to realize the profit they expect. If this is the case, the liquidity of the Shares may decline and the price of the Shares may
fluctuate independently of the price of platinum and may fall or otherwise diverge from NAV.
As
an owner of Shares, you will not have the rights normally associated with ownership of other types of shares.
Shares
are not entitled to the same rights as shares issued by a corporation. By acquiring Shares, you are not acquiring the right to elect
directors, to receive dividends, to vote on certain matters regarding the issuer of your Shares or to take other actions normally associated
with the ownership of shares of a corporation. You will only have the limited rights described under “Description of the Shares
and the Trust Agreement.”
As
an owner of Shares, you will not have the protections normally associated with ownership of shares in an investment company registered
under the Investment Company Act, or the protections afforded by the Commodity Exchange Act.
The
Trust is not registered as an investment company for purposes of United States federal securities laws, and is not subject to regulation
by the SEC as an investment company. Consequently, the owners of Shares do not have the regulatory protections provided to investors
in registered investment companies. For example, the provisions of the Investment Company Act that limit transactions with affiliates,
prohibit the suspension of redemptions (except under certain limited circumstances) or limit sales loads, among others, do not apply
to the Trust.
The
Trust does not hold or trade in commodity futures contracts, “commodity interests”, or any other instruments regulated by
the Commodity Exchange Act, as administered by the CFTC and the National Futures Association (the “NFA”). Furthermore, the
Trust is not a commodity pool for purposes of the Commodity Exchange Act and the Shares are not “commodity interests”. Consequently,
the Trustee and Sponsor are not subject to registration as commodity pool operators or commodity trading advisors with respect to the
Trust or the Shares. The owners of Shares do not receive the Commodity Exchange Act disclosure document and certified annual report required
to be delivered by a registered commodity pool operator or a commodity trading advisor with respect to the Trust, and the owners of Shares
do not have the regulatory protections provided to investors in commodity pools operated by registered commodity pool operators or advised
by commodity trading advisors.
An
investment in the Shares may be adversely affected by competition from other methods of investing in platinum.
The
Trust competes with other financial vehicles, including traditional debt and equity securities issued by companies in the platinum industry
and other securities backed by or linked to platinum, direct investments in platinum and investment vehicles similar to the Trust. Market
and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to invest in other financial
vehicles or to invest in platinum directly, which could limit the market for the Shares and reduce the liquidity of the Shares.
The
price of platinum may be affected by the sale of ETVs tracking the platinum market.
To
the extent existing ETVs tracking the platinum market represent a significant proportion of demand for physical platinum, large redemptions
of the securities of these ETVs could negatively affect physical platinum prices and the price and NAV of the Shares.
The
value of the Shares will be adversely affected if platinum owned by the Trust is lost or damaged in circumstances in which the Trust
is not in a position to recover the corresponding loss.
The
Custodian is responsible to the Trust for loss or damage to the Trust’s platinum only under limited circumstances. The agreements
with the Custodian contemplate that the Custodian will be responsible to the Trust only if it acts with negligence, fraud or in willful
default of its obligations under those agreements. The Custodian’s liability will not exceed the market value of the platinum credited
to the Trust Unallocated Account and the Trust Allocated Account at the time such negligence, fraud or willful default is either discovered
by or notified to the Custodian (such market value calculated using the nearest available LBMA Platinum Price PM following the occurrence
of such negligence, fraud or willful default), provided that, in the case of such discovery by or notification to the Custodian, the
Custodian notifies the Sponsor and the Trustee promptly after any discovery of such negligence, fraud or willful default. Furthermore,
the Custodian is not liable for any delay in performance, or for the non-performance, of any of its obligations under the Custody Agreements
by reason of any cause beyond the Custodian’s reasonable control, including any act of God or war or terrorism, any breakdown,
malfunction or failure of, or connected with, any communication, computer, transmission, clearing or settlement facilities, industrial
action, or acts, rules and regulations of any governmental or supra national bodies or authorities or any relevant regulatory or self-regulatory
organization.
In
addition, because the Custody Agreements are governed by English law, the holders of the Shares may have no rights against the Custodian
and any rights they may have against the Custodian will be different from, and may be more limited than, those that could have been available
to them under the laws of a different jurisdiction. The choice of English law to govern the Custody Agreements, however, is not expected
to affect any rights that the holders of the Shares may have against the Trust or the Trustee.
Moreover,
the Trust may not be in a position to recover insurance proceeds in the event of any loss with respect to its platinum. The Trust does
not insure its platinum. The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate,
which does not cover the full amount of platinum held in custody. The Trust is not a beneficiary of any such insurance and does not have
the ability to dictate the existence, nature or amount of coverage. Therefore, Shareholders cannot be assured that the Custodian will
maintain adequate insurance or any insurance with respect to the platinum held by the Custodian on behalf of the Trust. The Custodian
and the Trustee do not require any direct or indirect subcustodians to be insured or bonded with respect to their custodial activities
or in respect of the platinum held by them on behalf of the Trust. Consequently, a loss may be suffered with respect to the Trust’s
platinum which is not covered by insurance and for which no person is liable in damages.
Any
loss of platinum owned by the Trust will result in a corresponding loss in the net asset value of the Trust and it is reasonable to expect
that such loss will also result in a decrease in the value at which the Shares are traded on the Exchange.
Although
the relationship between the Custodian and the Trustee concerning the Trust’s allocated platinum is expressly governed by English
law, a court hearing any legal dispute concerning that arrangement may disregard that choice of law and apply U.S. law, in which case
the ability of the Trust to seek legal redress against the Custodian may be frustrated.
The
obligations of the Custodian under the Custody Agreements are governed by English law. The Trust is a New York common law trust. Any
United States, New York or other court situated in the United States may have difficulty interpreting English law (which, insofar as
it relates to custody arrangements, is largely derived from court rulings rather than statute), The London Platinum and Palladium Market
(LPPM) rules or the customs and practices in the London custody market. It may be difficult or impossible for the Trust to sue the Custodian
in a United States, New York or other court situated in the United States. In addition, it may be difficult, time consuming and/or expensive
for the Trust to enforce in a foreign court a judgment rendered by a United States, New York or other court situated in the United States.
Shareholders
and Authorized Participants lack the right under the Custody Agreements to assert claims directly against the Custodian, which significantly
limits their options for recourse.
Neither
the Shareholders nor any Authorized Participant will have a right under the Custody Agreements to assert a claim of the Trustee against
the Custodian. Claims under the Custody Agreements may only be asserted by the Trustee on behalf of the Trust.
Platinum
held in the Trust Unallocated Account and any Authorized Participant’s unallocated platinum account will not be segregated from
the Custodian’s assets. If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any
Authorized Participant. In addition, in the event of the Custodian’s insolvency, there may be a delay and costs incurred in identifying
the platinum bars held in the Trust Allocated Account.
Platinum
which is part of a deposit for a purchase order or part of a redemption distribution will be held for a time in the Trust Unallocated
Account and, previously or subsequently in, the unallocated platinum account of the purchasing or redeeming Authorized Participant. During
those times, the Trust and the Authorized Participant, as the case may be, will have no proprietary rights to any specific bars of platinum
held by the Custodian and will each be an unsecured creditor of the Custodian with respect to the amount of platinum held in such unallocated
accounts. In addition, if the Custodian fails to allocate the Trust’s platinum in a timely manner, in the proper amounts or otherwise
in accordance with the terms of the Trust Unallocated Account Agreement, or if a subcustodian fails to so segregate platinum held by
it on behalf of the Trust, unallocated platinum will not be segregated from the Custodian’s assets, and the Trust will be an unsecured
creditor of the Custodian with respect to the amount so held in the event of the insolvency of the Custodian. In the event the Custodian
becomes insolvent, the Custodian’s assets might not be adequate to satisfy a claim by the Trust or the Authorized Participant for
the amount of platinum held in their respective unallocated platinum accounts.
In
the event of the insolvency of the Custodian, a liquidator may seek to freeze access to the platinum held in all of the accounts held
by the Custodian, including the Trust Allocated Account. Although the Trust would retain legal title to the allocated platinum bars,
the Trust could incur expenses in connection with obtaining control of the allocated platinum bars, and the assertion of a claim by such
liquidator for unpaid fees could delay creations and redemptions of Baskets.
From
time to time subcustodians may be employed by the Custodian to provide temporary custody and safekeeping of the Trust’s platinum.
The obligations of any subcustodian of the Trust’s platinum are not determined by contractual arrangements but by LPPM rules and
London bullion market customs and practices, which may prevent the Trust’s recovery of damages for losses on its platinum custodied
with subcustodians.
Allocated
platinum may be held by one or more subcustodians appointed by the Custodian, or employed by the subcustodians appointed by the Custodian,
until it is transported to the Custodian’s London vault premises. Under the Trust Allocated Account Agreement, subject to certain
exclusions including the Custodian’s obligation to use commercially reasonable efforts to obtain delivery of the Trust’s
platinum bars from any subcustodians appointed by the Custodian, the Custodian is not liable for the acts or omissions of its subcustodians
unless the selection of such subcustodians was made negligently or in bad faith. There are expected to be no written contractual arrangements
between subcustodians that hold the Trust’s platinum bars and the Trustee or the Custodian, because traditionally such arrangements
are based on the LPPM’s rules and on the customs and practices of the London bullion market. In the event of a legal dispute with
respect to or arising from such arrangements, it may be difficult to define such customs and practices. The LPPM’s rules may be
subject to change outside the control of the Trust. Under English law, neither the Trustee nor the Custodian would have a supportable
breach of contract claim against a subcustodian for losses relating to the safekeeping of platinum. If the Trust’s platinum bars
are lost or damaged while in the custody of a subcustodian, the Trust may not be able to recover damages from the Custodian or the subcustodian.
Because
neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may temporarily hold the Trust’s
platinum bars until transported to the Custodian’s London vault, failure by the subcustodians to exercise due care in the safekeeping
of the Trust’s platinum bars could result in a loss to the Trust.
Under
the Trust Allocated Account Agreement, the Custodian agreed that it will hold all of the Trust’s platinum bars in its own vault
premises except when the platinum bars have been allocated in a vault other than the Custodian’s vault premises, and in such cases
the Custodian agreed that it will use commercially reasonable efforts promptly to transport the platinum bars to the Custodian’s
vault, at the Custodian’s cost and risk. Nevertheless, there may be periods of time when some portion of the Trust’s platinum
bars will be held by one or more subcustodians appointed by the Custodian or by a subcustodian of such subcustodian.
The
Custodian is required under the Trust Allocated Account Agreement to use reasonable care in appointing its subcustodians but otherwise
has no other responsibility in relation to the subcustodians appointed by it. These subcustodians may in turn appoint further subcustodians,
but the Custodian is not responsible for the appointment of these further subcustodians. The Custodian does not undertake to monitor
the performance by subcustodians of their custody functions or their selection of further subcustodians. The Trustee does not undertake
to monitor the performance of any subcustodian. Furthermore, the Trustee may have no right to visit the premises of any subcustodian
for the purposes of examining the Trust’s platinum bars or any records maintained by the subcustodian, and no subcustodian will
be obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of
such subcustodian.
In
addition, the ability of the Trustee to monitor the performance of the Custodian may be limited because under the Custody Agreements,
the Trustee and the Sponsor have only limited rights to visit the premises of the Custodian for the purpose of examining the Trust’s
platinum bars and certain related records maintained by the Custodian.
The
value of the Shares will be adversely affected if any services provided to the Trust by the Sponsor, the Custodian or the Trustee are
suddenly or unexpectedly terminated.
Upon
the sudden or unexpected termination, resignation or removal of any service provider to the Trust, it is possible that a comparable replacement
service provider will be available or able to be appointed without material delay. Any such unavailability or delay could cause the Trustee
to expend assets of the Trust and consequently, the NAV of the Shares, in finding a replacement service provider.
The
value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor, the Trustee, or the Custodian as contemplated
in the Trust Agreement and the Custody Agreements.
Under
the Trust Agreement, the Sponsor and the Trustee each have the right to be indemnified from the Trust for any liability or expense it
incurs without gross negligence, bad faith, willful misconduct or willful malfeasance on its part. Similarly, the Custody Agreements
provide for indemnification of the Custodian by the Trust under certain circumstances. This means that it may be necessary to sell assets
of the Trust in order to cover losses or liability suffered by the Sponsor, the Trustee or the Custodian. Any sale of that kind would
reduce the net asset value of the Trust and the value of the Shares.
The
service providers engaged by the Trust may not carry adequate insurance to cover claims against them by the Trust, which could adversely
affect the value of net assets of the Trust.
The
Trustee, the Custodian and other service providers engaged by the Trust maintain such insurance as they deem adequate with respect to
their respective businesses. Investors cannot be assured that any of the aforementioned parties will maintain any insurance with respect
to the Trust’s assets held or the services that such parties provide to the Trust and, if they maintain insurance, that such insurance
is sufficient to satisfy any losses incurred by them in respect of their relationship with the Trust. Accordingly, the Trust will have
to rely on the efforts of the service provider to recover from their insurer compensation for any losses incurred by the Trust in connection
with such arrangements.
The
Sponsor and its affiliates manage other funds, including those that invest in physical platinum bullion or other precious metals, and
conflicts of interest may occur, which may reduce the value of the net assets of the Trust, the NAV and the trading price of the Shares.
The
Sponsor or its affiliates and associates currently engage in, and may in the future engage in, the promotion, management or investment
management of other accounts, funds or trusts that invest primarily in physical platinum bullion or other precious metals. Although officers
and professional staff of the Sponsor’s management intend to devote as much time to the Trust as is deemed appropriate to perform
their duties, the Sponsor’s management may allocate their time and services among the Trust and the other accounts, funds or trusts.
The Sponsor will provide any such services to the Trust on terms not less favorable to the Trust than would be available from a non-affiliated
party.
The
Sponsor and the Trustee may agree to amend the Trust Agreement without the consent of the Shareholders.
The
Sponsor and the Trustee may agree to amend the Trust Agreement, including to increase the Sponsor’s Fee, without Shareholder consent.
If an amendment imposes new fees and charges or increases existing fees or charges, including the Sponsor’s Fee (except for taxes
and other governmental charges, registration fees or other such expenses, or prejudices a substantial right of Shareholders), it will
become effective for outstanding Shares 30 days after notice of such amendment is given to registered owners. Shareholders that are not
registered owners (which most shareholders will not be) may not receive specific notice of a fee increase other than through an amendment
to the prospectus. Moreover, at the time an amendment becomes effective, by continuing to hold Shares, Shareholders are deemed to agree
to the amendment and to be bound by the Trust Agreement as amended without specific agreement to such increase (other than through the
“negative consent” procedure described above).
Shareholders
could incur a tax liability without an associated distribution of the Trust.
In
the normal course of business it is possible that the Trust could incur a taxable gain in connection with the sale of platinum that is
otherwise not associated with a distribution. In the event that this occurs, Shareholders may be subject to tax due to the grantor trust
status of the Trust even though there is not a corresponding distribution from the Trust.
The
Trust may be negatively impacted by the effects of the spread of illnesses or other public health emergencies on the global economy and
the markets and service providers relevant to the performance of the Trust.
An
outbreak of infectious respiratory illness caused by a novel coronavirus known as COVID-19 was first detected in China in December 2019
and has now been spread globally. This outbreak has resulted in travel restrictions, closed international borders, enhanced health screenings
at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations,
supply chain disruptions, and lower consumer demand, layoffs, defaults and other significant economic impacts, as well as general concern
and uncertainty. The impact of this outbreak has adversely affected the economies of many nations and the entire global economy and may
impact individual issuers and capital markets in ways that cannot necessarily be foreseen. Other infectious illness outbreaks that may
arise in the future could have similar impacts. Public health crises caused by the outbreak may exacerbate other pre-existing political,
social and economic risks in certain countries or globally.
The
COVID-19 outbreak has had and may continue to have serious negative effects on social, economic and financial systems, including significant
uncertainty and volatility in the financial markets. For instance, the suspension of operations of mines, refineries and vaults that
extract, produce or store platinum, restrictions on travel that delay or prevent the transportation of platinum, and an increase in demand
for platinum may disrupt supply chains for platinum, which could cause secondary market spreads to widen and compromise our ability to
make settlements on time. Any inability of the Trust to issue or redeem Shares or the Custodian or any sub-custodian to receive or deliver
platinum as a result of the outbreak will negatively affect the Trust’s operations.
The
duration of the outbreak and its effects cannot be determined with certainty. A prolonged outbreak could result in an increase of the
costs of the Trust, affect liquidity in the market for platinum as well as the correlation between the price of the Shares and the net
asset value of the Trust, any of which could adversely affect the value of your Shares. In addition, the outbreak could also impair the
information technology and other operational systems upon which the Trust’s service providers, including the Sponsor, the Trustee
and the Custodian, rely, and could otherwise disrupt the ability of employees of the Trust’s service providers to perform essential
tasks on behalf of the Trust. Governmental and quasi-governmental authorities and regulators throughout the world have in the past responded
to major economic disruptions with a variety of fiscal and monetary policy changes, including, but not limited to, direct capital infusions
into companies, new monetary programs and lower interest rates. An unexpected or quick reversal of these policies, or the ineffectiveness
of these policies, is likely to increase volatility in the market for platinum, which could adversely affect the price of the Shares.
Further,
the outbreak could interfere with or prevent the determination of the applicable benchmark price, which the Trustee uses to value the
platinum held by the Trust and calculate the net asset value of the Trust. The outbreak could also cause the closure of futures exchanges,
which could eliminate the ability of Authorized Participants to hedge purchases of Baskets, increasing trading costs of Shares and resulting
in a sustained premium or discount in the Shares. Each of these outcomes would negatively impact the Trust.
War
and other geopolitical events, including but not limited to the war between Russia and Ukraine or the war between Israel and Hamas, outbreaks
or public health emergencies (as declared by the World Health Organization), the continuation or expansion of war or other hostilities,
or a prolonged government shutdown may cause volatility in the price of platinum due to the importance of a country or region to the
platinum market, market access restrictions imposed on some local platinum producers and refiners, potential impacts to global transportation
and shipping and other supply chain disruptions. These events are unpredictable and may lead to extended periods of price volatility.
The
operations of the Trust, the exchanges, brokers and counterparties with which the Trust does business, and the markets in which the Trust
does business could be severely disrupted in the event of a major terrorist attack, cyber-attack, data breach, outbreak or public health
emergency as declared by the World Health Organization (such as the spread of the novel coronavirus known as COVID-19), or the continuation
or expansion of war or other hostilities.
In
late February 2022, Russia launched an invasion of Ukraine, significantly amplifying already existing geopolitical tensions among Russia
and other countries in the region and in the west. The responses of countries and political bodies to Russia’s actions, the larger
overarching tensions, and Ukraine’s military response and the potential for wider conflict may increase financial market volatility
generally, have severe adverse effects on regional and global economic markets, and cause volatility in the price of platinum and the
share price of the Trust. The conflict in Ukraine, along with global political fallout and implications including sanctions, shipping
disruptions, collateral war damage, and a potential expansion of the conflict beyond Ukraine’s borders, could disturb the platinum
market. Russia is one of the world’s largest platinum producer, mining around 19.6 tonnes of platinum, or around 11% of the total
mined worldwide. On March 6, 2022, the LBMA suspended its accreditation of six Russian precious metals refiners, hence suspending their
access the world’s largest gold market. War and other geopolitical events in eastern Europe, including but not limited to Russia
and Ukraine, may cause volatility in commodity prices including precious metals prices. These events are unpredictable and may lead to
extended periods of price volatility.
Global
terrorist attacks, anti-terrorism initiatives, and political unrest, as well as the adverse impact the COVID-19 pandemic has had on the
global and U.S. markets and economy, continue to fuel concerns. For example, the COVID-19 pandemic may continue to adversely impact the
level of services currently provided by the U.S. government, could weaken the U.S. economy, and interfere with the commodities markets
that rely upon data published by U.S. federal government agencies. The types of events discussed above, including the COVID-19 pandemic,
are highly disruptive to economies and markets and have recently led, and may continue to lead, to increased market volatility and significant
market losses.
More
generally, a climate of uncertainty and panic, including the contagion of the COVID-19 virus and other infectious viruses or diseases,
may adversely affect global, regional, and local economies and reduce the availability of potential investment opportunities, and increases
the difficulty of performing due diligence and modeling market conditions, potentially reducing the accuracy of financial projections.
Under these circumstances, the Trust may have difficulty achieving its investment objective which may adversely impact performance. Further,
such events can be highly disruptive to economies and markets, significantly disrupt the operations of individual companies (including,
but not limited to, the Sponsor and third party service providers), sectors, industries, markets, securities and commodity exchanges,
currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Trust’s
assets. These factors could cause substantial market volatility, exchange trading suspensions and closures that could impact the ability
of the Trust to complete redemptions and otherwise affect Trust performance and Trust trading in the secondary market. A widespread crisis
may also affect the global economy in ways that cannot necessarily be foreseen at the current time. How long such events will last and
whether they will continue or recur cannot be predicted. Impacts from these events could have significant impact on the Trust’s
performance, resulting in losses to your investment. The current and future global economic impact may cause the underlying assumptions
and expectations of the Trust to become outdated quickly or inaccurate, resulting in significant losses.
Risks
Relating to Prior Securities Issuances
Issuances
of the Trust’s securities are subject to federal and state securities laws, and certain holders of shares of beneficial interest
issued by the Trust may be entitled to rescission.
Issuances
of securities are subject to federal and state securities laws. Between November 1, 2020 and December 14, 2020, the Trust issued an aggregate
of 400,000 shares representing units of fractional undivided beneficial interests in the net assets of the Trust. During such period,
the Trust’s Registration Statement on Form S-1 (File No. 333-221325) to register the November Shares was not “current”
because the registration statement had not been amended to include the Trust’s most recent audited financial statements. As a result,
the sales of the November Shares were not registered under federal and state securities laws. Consequently, purchasers of the November
Shares may seek to rescind the sales, in which case the Trust could be liable for rescission payments to them in the amount of their
aggregate original purchase price plus applicable interest. If one or more holders were to successfully seek such rescission or prevail
in any such suit, the Trust’s financial condition and results of operations may be adversely affected. As of the date hereof, the
Trust has not received any claims for rescission or damages or claims relating to any other liability stemming from the Trust’s
issuance of the November Shares.
Use
of Proceeds
Proceeds
received by the Trust from the issuance and sale of Baskets consist of platinum deposits. Such deposits are held by the Custodian on
behalf of the Trust until (i) delivered to Authorized Participants in connection with redemptions of Baskets or (ii) sold to pay fees
due to the Sponsor and Trust expenses and liabilities not assumed by the Sponsor. See “The Trust—Trust Expenses.”
Description
of the Platinum Industry
Introduction
This
section provides a brief introduction to the platinum industry by looking at some of the key participants and detailing the primary sources
of demand and supply.
Platinum
Group Metals
Platinum
and palladium are the two best known metals of the six platinum group metals (PGMs). Platinum and palladium have the greatest economic
importance and are found in the largest quantities. The other four—iridium, rhodium, ruthenium and osmium—are produced only
as co-products of platinum and palladium.
Primary
Sources of Supply and Demand
Main
demand for platinum is mainly autocatalyst and jewelry. It is sourced through mining (73%) and recycling (24%).
The
Mining and Producer Sector
This
group includes mining companies that specialize in PGM production. PGMs are found primarily in South Africa (72% of the total mine production)
and Russia (11% of the total mine production) (source: Johnson Matthey’s 2023 PGM market report). As a general matter, the occurrence
of a severe event in one or several major platinum producing countries such as geopolitical events, outbreaks or public health emergencies
(as declared by the World Health Organization), the continuation or expansion of war or other hostilities, or a prolonged government
shutdown may have significant adverse effects on the Trust and its investments and alter current assumptions and expectations. For example,
in late February 2022, Russia invaded Ukraine, significantly amplifying already existing geopolitical tensions among Russia and other
countries in the region and in the West. The responses of other countries and political bodies to Russia’s actions, the larger
overarching tensions, Ukraine’s military response, and the potential for wider conflict may increase financial market volatility
generally, have severe adverse effects on regional and global economic markets, and cause volatility in the price of platinum and the
share price of the Trust. Russia produces more than 19.6 tonnes of platinum per year, or approximately 11% of the world’s production.
The continuous conflict between Russia and Ukraine, including but not limited to, sanctions, shipping disruptions, and collateral war
damage could further disrupt the availability of platinum supplies.
Autocatalyst
Autocatalyst
is the main source of demand for platinum, with approximately 39% of the gross demand, and is used primarily for diesel engines. Recycling
autocatalyst is also a significant source of supply, with 31% of the total supply.
Jewelry
Jewelry
is the second source of demand for platinum, representing approximately 24% of the total demand. Recycling jewelry accounts for approximately
9% of the total supply.
World
Platinum Supply and Demand 2018–2022
The
following table sets forth a summary of the world platinum supply and demand for the last five years and is based on information reported
by the PGM 2023 Market Report prepared by Johnson Matthey.
| (000 ounces) | |
2018 | | |
2019 | | |
2020 | | |
2021 | | |
2022 | |
| Supply | |
| | | |
| | | |
| | | |
| | | |
| | |
| Mine Production | |
| | | |
| | | |
| | | |
| | | |
| | |
| South Africa | |
| 4,467 | | |
| 4,344 | | |
| 3,243 | | |
| 4,609 | | |
| 3,965 | |
| Russia | |
| 687 | | |
| 721 | | |
| 699 | | |
| 638 | | |
| 600 | |
| North America | |
| 370 | | |
| 367 | | |
| 334 | | |
| 279 | | |
| 266 | |
| Others | |
| 626 | | |
| 605 | | |
| 687 | | |
| 687 | | |
| 699 | |
| Total Mine Production | |
| 6,150 | | |
| 6,037 | | |
| 4,963 | | |
| 6,213 | | |
| 5,530 | |
| Autocatalyst Recycling | |
| 1,332 | | |
| 1,389 | | |
| 1,154 | | |
| 1,234 | | |
| 1,153 | |
| Jewelry and Electrical Recycling | |
| 737 | | |
| 703 | | |
| 544 | | |
| 411 | | |
| 315 | |
| Total Supply | |
| 8,219 | | |
| 8,129 | | |
| 6,661 | | |
| 7,858 | | |
| 6,998 | |
| Demand | |
| | | |
| | | |
| | | |
| | | |
| | |
| Autocatalysts | |
| 2,815 | | |
| 2,589 | | |
| 2,024 | | |
| 2,405 | | |
| 2,762 | |
| Jewelry | |
| 2,258 | | |
| 2,073 | | |
| 1,657 | | |
| 1,468 | | |
| 1,344 | |
| Chemical | |
| 654 | | |
| 665 | | |
| 615 | | |
| 677 | | |
| 699 | |
| Electronics | |
| 228 | | |
| 215 | | |
| 226 | | |
| 259 | | |
| 235 | |
| Glass | |
| 501 | | |
| 468 | | |
| 507 | | |
| 908 | | |
| 594 | |
| Investment | |
| 67 | | |
| 1,131 | | |
| 1,022 | | |
| (28 | ) | |
| (565 | ) |
| Medical and biomedical | |
| 241 | | |
| 254 | | |
| 218 | | |
| 224 | | |
| 235 | |
| Other | |
| 1,104 | | |
| 994 | | |
| 879 | | |
| 865 | | |
| 954 | |
| Total Demand | |
| 7,868 | | |
| 8,389 | | |
| 7,148 | | |
| 6,778 | | |
| 6,258 | |
| Movement in Stocks | |
| 351 | | |
| (260 | ) | |
| (487 | ) | |
| 1,080 | | |
| 740 | |
Source:
Johnson Matthey, PGM Market Report 2022, published May 2023
Historical
Chart of the Price of Platinum
The
price of platinum is volatile and its fluctuations are expected to have a direct impact on the value of the Shares. However, movements
in the price of platinum in the past, and any past or present trends, are not a reliable indicator of future movements.
The
following chart illustrates the movements in the price of an ounce of platinum in U.S. dollars from January 2014 to December 2023:
Source:
Bloomberg, GraniteShares
Operation
of the Platinum Market
The
global trade in platinum consists of Over-the-Counter (OTC) transactions in spot, forward, and option and other derivatives, together
with exchange-traded futures and options.
Over-the-Counter
Market
Most
trading in physical platinum is conducted on the OTC market, predominantly in Zurich and London. The LPPM coordinates various OTC market
activities, including clearing and vaulting, acts as the principal intermediary between physical platinum market participants and the
relevant regulators, promotes good trading practices and develops standard market documentation. In addition, the LPPM promotes refining
standards for the platinum market by maintaining the “London/Zurich Good Delivery List,” which are the lists of LPPM accredited
melters and assayers of platinum.
The
basis for settlement and delivery of a spot trade is payment (generally in U.S. dollars) two business days after the trade date against
delivery. Delivery of the platinum can either be by physical delivery or through the clearing systems to an unallocated account. The
unit of trade in London and Zurich is the troy ounce, whose conversion between grams is: 1,000 grams is equivalent to 32.1507465 troy
ounces, and one troy ounce is equivalent to 31.1034768 grams.
A
good delivery platinum plate or ingot is acceptable for delivery in settlement of a transaction on the OTC market (a “Good Delivery
Platinum Plate or Ingot”). A Good Delivery Platinum Plate or Ingot must contain between 32 and 192 troy ounces of platinum with
a minimum fineness (or purity) of 999.5 parts per 1,000 (99.95%), be of good appearance, and be easy to handle and stack. A Good Delivery
Platinum Plate or Ingot must also bear the stamp of one of the melters and assayers who are on the LPPM approved list. Unless otherwise
specified, the platinum spot price always refers to the “Good Delivery Standards” set by the LPPM.
The
London Metal Exchange (the “LME”) administers the operation of an electronic platinum bullion price fixing systems (“LMEbullion”)
that replicates electronically the manual London platinum fix processes, as well as providing electronic market clearing processes for
platinum bullion transactions at the fixed prices established by the LME pricing mechanism. The LME’s electronic price fixing processes
establishes and publishes fixed prices for troy ounces of platinum twice each London trading day during fixing sessions beginning at
9:45 a.m. London time (the “LBMA Platinum Price AM”) and 2:00 p.m. London time (the “LBMA Platinum Price PM”)
(and together the “LBMA Platinum Price”).
Market
Regulation
The
global platinum markets are overseen and regulated by both governmental and self-regulatory organizations. In addition, certain trade
associations have established rules and protocols for market practices and participants. In the United Kingdom, responsibility for the
regulation of the financial market participants, including the major participating members of the LPPM, falls under the authority of
the Financial Conduct Authority (FCA) as provided by the Financial Services and Markets Act 2000 (“FSM Act”). Under this
act, all UK-based banks, together with other investment firms, are subject to a range of requirements, including fitness and properness,
capital adequacy, liquidity, and systems and controls.
The
FCA is responsible for regulating investment products, including derivatives, and those who deal in investment products. Regulation of
spot, commercial forwards, and deposits of platinum not covered by the FSM Act is provided for by The London Code of Conduct for Non-Investment
Products, which was established by market participants in conjunction with the Bank of England.
Futures
Exchanges
Futures
exchanges seek to provide a neutral, regulated marketplace for the trading of derivatives contracts for commodities, such as futures,
options and certain swaps. The terms of these contracts are defined by an exchange for each commodity. For each commodity traded, the
contract specifies the precise commodity quality and quantity standards, as well as the location and timing of physical delivery for
the reference physical commodity, although only a very small number of these contracts result in the actual commodity delivery.
An
exchange does not buy or sell those contracts, but seeks to offer a transparent forum where members, on their own behalf or on the behalf
of customers, can trade the contracts in a safe, efficient and orderly manner. The futures and options contracts, as well as some swaps,
are cleared through a derivative clearing organization which ensures more accurate valuation of positions in these contracts as well
as settlement of trades in these contracts.
The
most significant platinum futures exchange in the U.S. is NYMEX, a subsidiary of the Chicago Mercantile Exchange Group (the “CME
Group”). Another commodity exchange includes the Tokyo Commodity Exchange (“TOCOM”).
Exchange
Regulation
In
addition to the public nature of the pricing, futures exchanges in the United States are regulated at two levels, internal and external
governmental supervision. The internal is performed through self-regulation by self-regulatory organizations and consists of regular
monitoring of the trading process to ensure that it is conducted in conformance with all exchange rules; the financial condition of all
exchange member firms to ensure that they continuously meet financial commitments; and the positions of commercial and noncommercial
customers to ensure that physical delivery and other commercial commitments can be met, and that pricing is not being improperly affected
by the size of any particular customer positions. External governmental oversight is performed by the CFTC, which reviews all the rules
and regulations of United States futures exchanges and monitors their enforcement. The CFTC oversees the operation of the U.S. commodity
futures markets, including the CME. One of the principal public policy objectives of the Commodity Exchange Act is to ensure the integrity
of the markets it oversees and the reliability of the prices of trades on those markets. The Commodity Exchange Act and CFTC require
futures exchanges to ensure compliance with core principles applicable to designated contract markets to have rules and procedures to
prevent market manipulation, abusive trade practice and fraud, and the CFTC conducts regular review of the markets’ rule enforcement
programs. Other local regulators enforce their own regulations governing trading platforms and futures exchanges located in their jurisdictions.
Not
a Regulated Commodity Pool
The
Trust does not trade in platinum futures contracts on the CME or on any other futures exchange. The Trust takes delivery of physical
platinum that complies with the LPPM platinum delivery rules. Because the Trust does not trade in platinum futures contracts on any futures
exchange, the Trust is not regulated by the CFTC under the Commodity Exchange Act as a “commodity pool,” and is not operated
by a CFTC-regulated commodity pool operator. Investors in the Trust do not receive the regulatory protections afforded to investors in
regulated commodity pools, nor may the NYMEX or any futures exchange enforce its rules with respect to the Trust’s activities.
In addition, investors in the Trust do not benefit from the protections afforded to investors in platinum futures contracts on regulated
futures exchanges.
The
Trust
The
activities of the Trust are limited to (1) issuing Baskets in exchange for the platinum deposited with the Custodian as consideration,
(2) selling platinum as necessary to cover the Sponsor’s Fee and Trust expenses not assumed by the Sponsor and other liabilities,
and (3) delivering platinum in exchange for Baskets surrendered for redemption. The Trust is not actively managed. It does not engage
in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of platinum.
Trust
Objective
The
objective of the Trust is for the value of the Shares to reflect, at any given time, the value of the assets owned by the Trust at that
time less the Trust’s accrued expenses and liabilities as of that time. The Shares are intended to constitute a simple and cost-effective
means of making an investment similar to an investment in platinum. An investment in allocated physical platinum bullion requires expensive
and sometimes complicated arrangements in connection with the assay, transportation and warehousing of the metal. Traditionally, such
expense and complications have resulted in investments in physical platinum bullion being efficient only in amounts beyond the reach
of many investors. The Shares have been designed to remove the obstacles represented by the expense and complications involved in an
investment in physical platinum bullion, while at the same time having an intrinsic value that reflects, at any given time, the price
of the assets owned by the Trust at such time less the Trust expenses and liabilities. Although the Shares are not the exact equivalent
of an investment in platinum, they provide investors with an alternative that allows a level of participation in the platinum market
through the securities market.
Advantages
of investing in the Shares include:
●
Minimal credit risk.
The
Shares represent an interest in physical platinum owned by the Trust (other than up to a maximum of 192 ounces of platinum held in unallocated
form) and held in physical custody at the Custodian. Physical platinum of the Trust in the Custodian’s possession is not subject
to borrowing arrangements with third parties. Other than the platinum temporarily being held in an unallocated platinum account of the
Trust in connection with deposits and an amount of platinum comprising less than 192 ounces which may be held in the unallocated platinum
account of the Trust on an ongoing basis, the physical platinum of the Trust is not subject to counterparty or credit risks. This contrasts
with most other financial products that gain exposure to precious metals through the use of derivatives that are subject to counterparty
and credit risks.
●
Backed by platinum held by the Custodian on behalf of the Trust.
As
noted above, the Shares are backed primarily by allocated physical platinum bullion identified as the Trust’s property in the Custodian’s
books. The Trust arrangements contemplate that no Shares can be issued unless the corresponding amount of platinum has been deposited
into the Trust. Once deposited into the Trust, platinum is only removed from the Trust if (i) sold to pay Trust expenses (such as the
Sponsor’s Fee and any other expenses not assumed by the Sponsor) or liabilities to which the Trust may be subject, or (ii) transferred
from the Trust’s account to an Authorized Participant’s account in exchange for one or more Baskets of Shares surrendered
for redemption.
●
Ease and flexibility of investment.
Retail
investors may purchase and sell Shares through traditional brokerage accounts. Because the amount of platinum corresponding to a Share
is significantly less than the minimum amounts of physical platinum bullion that are commercially available for investment purposes,
the cash outlay necessary for an investment in Shares should be less than the amount required for currently existing means of investing
in physical platinum bullion. Shares are eligible for margin accounts.
●
Relatively cost efficient.
Although
the return, if any, of an investment in the Shares is subject to the additional expenses of the Trust, including the Sponsor’s
Fee, the Trustee’s Fee, the Custodian’s Fee, and to other costs and expenses not assumed by the Sponsor which would not be
incurred in the case of a direct investment in platinum, the Shares may represent a cost-efficient alternative for investors not otherwise
in a position to participate directly in the market for allocated physical platinum bullion, because the expenses involved in an investment
in allocated physical platinum bullion through the Shares are dispersed among all holders of Shares.
Secondary
Market Trading
While
the Trust seeks to reflect generally the performance of the price of platinum less the Trust’s expenses and liabilities, Shares
may trade at, above or below their NAV. The NAV of Shares will fluctuate with changes in the market value of the Trust’s assets.
The trading prices of Shares will fluctuate in accordance with changes in their NAV as well as market supply and demand. The amount of
the discount or premium in the trading price relative to the NAV may be influenced by non-concurrent trading hours between the major
platinum markets and the Exchange. While the Shares trade on the Exchange until 4:00 p.m. (New York time), liquidity in the market for
platinum may be reduced after the close of the major world platinum markets, including London, Zurich and NYMEX. As a result, during
this time, trading spreads, and the resulting premium or discount, on Shares may widen. However, given that Baskets of Shares can be
created and redeemed in exchange for the underlying amount of platinum, the Sponsor believes that the arbitrage opportunities may provide
a mechanism to mitigate the effect of such premium or discount.
Valuation
of Platinum; Computation of Net Asset Value
On
each business day, as soon as practicable after 4:00 p.m. (New York time), the Trustee evaluates the platinum held by the Trust and determines
the net asset value of the Trust and the NAV. For purposes of making these calculations, a business day means any day other than a day
when the Exchange is closed for regular trading.
The
Trustee values the platinum held by the Trust using that day’s LBMA Platinum Price PM. LBMA Platinum Price PM is the price per
troy ounce of platinum, stated in U.S. dollars, determined by the LME, following an auction process starting after 2:00 p.m. (London
time), on each day that the London platinum market is open for business, and announced by the LME shortly thereafter.
If
there is no LBMA Platinum Price PM on any day, the Trustee is authorized to use the LBMA Platinum Price AM announced on that day. If
neither price is available for that day, the Trustee will value the Trust’s platinum based on the most recently announced LBMA
Platinum Price PM or LBMA Platinum Price AM. If the Sponsor determines that such price is inappropriate to use, the Sponsor will identify
an alternate basis for evaluation to be employed by the Trustee. Further, the Sponsor may instruct the Trustee to use on an on-going
basis a different publicly available price which the Sponsor determines to fairly represent the commercial value of the Trust’s
platinum. Neither the Trustee nor the Sponsor are liable to any person for the determination that the most recently announced LBMA Platinum
Price PM (or other benchmark price) is not appropriate as a basis for evaluation of the platinum held or receivable by the Trust or for
any determination as to the alternative basis for evaluation, provided that such determination is made in good faith.
Once
the value of the Trust’s platinum has been determined, the Trustee subtracts all accrued fees, expenses and other liabilities of
the Trust from the total value of the platinum and all other assets of the Trust. The resulting figure is the net asset value of the
Trust. The Trustee determines the NAV per Share by dividing the net asset value of the Trust by the number of Shares outstanding at the
time the computation is made. Any estimate of the accrued but unpaid fees, expenses and liabilities of the Trust for purposes of computing
the net asset value of the Trust and NAV per Share of the Trust made by the Trustee in good faith shall be conclusive upon all persons
interested in the Trust.
Trust
Expenses
The
Trust’s only ordinary recurring expense is expected to be the Sponsor’s Fee. In exchange for the Sponsor’s Fee, the
Sponsor has agreed to assume the following expenses incurred by the Trust: the Trustee’s Fee and its ordinary out-of-pocket expenses,
the Custodian’s Fee and its reimbursable expenses, the Exchange listing fees, SEC registration fees, marketing expenses, printing
and mailing costs, audit fees and expenses and up to $500,000 per annum in legal fees and expenses.
The
Sponsor’s Fee is accrued daily at an annualized rate equal to 0.50% of the net asset value of the Trust and is payable monthly
in arrears. The Sponsor may, at its discretion and from time to time, waive all or a portion of the Sponsor’s Fee for stated periods
of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive
any such fees during any period not covered by the waiver. Presently, the Sponsor does not intend to waive any part of its fee. However,
the Sponsor may, in its sole discretion, agree to rebate all or a portion of the Sponsor’s Fee attributable to Shares held by certain
institutional investors subject to minimum shareholding and lock up requirements as determined by the Sponsor to foster stability in
the Trust’s asset levels. Any such rebate will be subject to negotiation and written agreement between the Sponsor and the investor
on a case by case basis. The Sponsor is under no obligation to provide any rebates of the Sponsor’s Fee. Neither the Trust nor
the Trustee will be a party to any Sponsor’s Fee rebate arrangements negotiated by the Sponsor. Any Sponsor’s Fee rebate
shall be paid from the funds of the Sponsor and not from the assets of the Trust.
The
Sponsor’s Fee will be paid through delivery of platinum from the Trust Unallocated Account that has been de-allocated from the
Trust Allocated Account for this purpose. The Trustee will, when directed by the Sponsor, and, in the absence of such direction, may,
in its discretion, sell platinum in such quantity and at such times, as may be necessary to permit payment of the Trust expenses or liabilities
not assumed by the Sponsor. The Trustee will endeavor to sell platinum at such times and in the smallest amounts required to permit such
payments as they become due, it being the intention to avoid or minimize the Trust’s holdings of assets other than platinum. Accordingly,
the amount of platinum to be sold will vary from time to time depending on the level of the Trust’s expenses and the market price
of platinum. The Custodian may, but is not required to purchase platinum needed to cover Trust expenses provided that if the Trustee’s
instruction to sell platinum is received by the Custodian by 1:00 p.m. (London time), the purchase price for the platinum will be that
day’s LBMA Platinum Price PM (or other applicable benchmark price), and if the Trustee’s instruction to sell platinum is
received by the Custodian after 1:00 p.m. (London time), the purchase price will be the next LBMA Platinum Price PM (or other applicable
benchmark price) available after that day.
Cash
held by the Trustee pending payment of the Trust’s expenses will not bear any interest. Each sale of platinum by the Trust will
be a taxable event to Shareholders for federal income tax purposes. See “United States Federal Income Tax Consequences—Taxation
of U.S. Shareholders.”
Impact
of Trust Expenses on the Trust’s Net Asset Value
The
Trust sells platinum to raise the funds needed for the payment of the Sponsor’s Fee and all other Trust expenses or liabilities
not assumed by the Sponsor. The purchase price received as consideration for such sales is the Trust’s sole source of funds to
cover its liabilities. The Trust does not engage in any activity designed to derive a profit from changes in the price of platinum. Platinum
not needed to redeem Baskets of Shares, or to cover the Sponsor’s Fee and Trust expenses or liabilities not assumed by the Sponsor,
will be held in physical form by the Custodian. As a result of the recurring deliveries or sales of platinum necessary to pay the Sponsor’s
Fee and the Trust expenses or liabilities not assumed by the Sponsor, the net asset value of the Trust and, correspondingly, the fractional
amount of platinum represented by each Share, will decrease over the life of the Trust. New deposits of platinum, received in exchange
for additional new Baskets issued by the Trust, do not reverse this trend.
Hypothetical
Expense Example
The
following table, prepared by the Sponsor, illustrates the anticipated impact of the deliveries and sales of platinum discussed above
on the fractional amount of platinum represented by each outstanding Share for three years. It assumes that the only dispositions of
platinum will be those sales needed to pay the Sponsor’s Fee and that the price of platinum and the number of Shares remain constant
during the three-year period covered. The table does not show the impact of any extraordinary expenses the Trust may incur. Any such
extraordinary expenses, if and when incurred, will accelerate the decrease in the fractional amount of platinum represented by each Share.
In addition, the table does not show the effect of any waivers of the Sponsor’s Fee that may be in effect from time to time.
| | |
1 | | |
2 | | |
3 | |
| Hypothetical platinum price per ounce | |
$ | 900.00 | | |
$ | 900.00 | | |
$ | 900.00 | |
| Sponsor’s Fee | |
| 0.50 | % | |
| 0.50 | % | |
| 0.50 | % |
| Shares of Trust, beginning | |
| 150,000 | | |
| 150,000 | | |
| 150,000 | |
| Ounces of platinum in Trust, beginning | |
| 1,500.000 | | |
| 1,492.539 | | |
| 1,485.115 | |
| Beginning adjusted net asset value of the Trust | |
$ | 1,350,000.00 | | |
$ | 1,343,285.20 | | |
$ | 1,336,603.80 | |
| Ounces of platinum to be delivered to cover the Sponsor’s Fee | |
| 7.461 | | |
| 7.424 | | |
| 7.387 | |
| Ounces of platinum in Trust, ending | |
| 1,492.539 | | |
| 1,485.115 | | |
| 1,477.728 | |
| Ending adjusted net asset value of the Trust | |
$ | 1,343,285.20 | | |
$ | 1,336,603.80 | | |
$ | 1,229,955.64 | |
| Ending NAV per share | |
$ | 8.96 | | |
$ | 8.91 | | |
$ | 8.87 | |
Description
of the Shares and the Trust Agreement
General
The
Trust was formed in 2018 when an initial deposit of platinum was made in exchange for the issuance of two Baskets. The purpose of the
Trust is to own platinum transferred to the Trust in exchange for Shares issued by the Trust. The Trust is governed by the Trust Agreement
between the Sponsor and the Trustee. The Trust Agreement sets out the rights of depositors of platinum and registered holders of Shares
and the rights and obligations of the Sponsor and the Trustee. New York law governs the Trust Agreement, the Trust and the Shares. The
following is a general description of the Shares and a summary of material provisions of the Trust Agreement. It is qualified by reference
to the entire Trust Agreement, which is filed as an exhibit to the registration statement of which this prospectus is a part.
Each
Share represents a unit of fractional undivided beneficial interest in the net assets of the Trust. The assets of the Trust consist primarily
of platinum held by the Custodian on behalf of the Trust. However, the Trustee will, at the direction of the Sponsor, or, in the absence
of such direction, may, in its discretion, sell the Trust’s platinum as necessary to cover the Sponsor’s Fee and expenses
and liabilities not assumed by the Sponsor. Such sales result in the Trust holding cash for brief periods of time. In addition, there
may be other situations where the Trust may hold cash. For example, a claim may arise against the Custodian, an Authorized Participant,
or any other third party, which is settled in cash. In those situations where the Trust unexpectedly receives cash or any other assets,
the Trust Agreement provides that no deposits of platinum will be accepted (i.e., there will be no issuance of new Shares) until after
the record date for the distribution of such cash or other property has passed.
The
Trustee is authorized under the Trust Agreement to create and issue an unlimited number of Shares. The Trustee will create Shares only
in Baskets (a Basket equals a block of 50,000 Shares) and only upon the order of an Authorized Participant. Any creation and issuance
of Shares above the amount registered on the registration statement of which this prospectus is a part will require the registration
of such additional Shares. Baskets of Shares may be redeemed by the Trust in exchange for the amount of platinum represented by the aggregate
number of Shares redeemed. The Trust is not a registered investment company under the Investment Company Act and is not required to register
under such act. The Trust is not a commodity pool for purposes of the Commodity Exchange Act.
Deposit
of Platinum; Issuance of Baskets
The
Trust creates and redeems Shares on a continuous basis but only in Baskets of 50,000 Shares. Upon the deposit of the corresponding amount
of platinum with the Custodian, and the payment of the Trustee’s applicable fee and of any expenses, taxes or charges (such as
stamp taxes or stock transfer taxes or fees), the Trustee will deliver the appropriate number of Baskets to the DTC account of the depositing
Authorized Participant. Only Authorized Participants can deposit platinum and receive Baskets of Shares in exchange. As of the date of
this prospectus, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Merrill Lynch Professional Clearing Corp., Morgan Stanley &
Co. LLC, Virtu Americas LLC and Virtu Financial BD LLC are the Authorized Participants. The Sponsor and the Trustee maintain a current
list of Authorized Participants. Platinum allocated by the Custodian to the Trust Allocated Account must meet the Good Delivery Standards.
Before
making a deposit, the Authorized Participant must deliver to the Trustee a written purchase order indicating the number of Baskets it
intends to acquire. The Trustee will acknowledge the purchase order unless it or the Sponsor decides to refuse the purchase order as
permitted by the Trust Agreement. The date the Trustee receives that order determines the Basket Amount the Authorized Participant needs
to deposit. However, orders received by the Trustee after 3:59 p.m. (New York time) on a business day or on a business day when the LBMA
Platinum Price PM or other applicable benchmark price is not announced, will not be accepted.
If
the Trustee accepts the purchase order, it transmits to the Authorized Participant, via facsimile or electronic mail message, no later
than 5:30 p.m. (New York time) on the date such purchase order is received, or deemed received, a copy of the purchase order endorsed
“Accepted” by the Trustee and indicating the Basket Amount that the Authorized Participant must deliver to the Custodian
at the Trust Unallocated Account loco London in exchange for each Basket. Prior to the Trustee’s acceptance as specified above,
a purchase order only represents the Authorized Participant’s unilateral offer to deposit platinum in exchange for Baskets of Shares
and has no binding effect upon the Trust, the Trustee, the Custodian or any other party.
The
Basket Amount necessary for the creation of a Basket changes from day to day. The initial Basket Amount at the time of creation of the
Trust was 1,500 Ounces of platinum. On each day that the Exchange is open for regular trading, the Trustee adjusts the quantity of platinum
constituting the Basket Amount as appropriate to reflect sales of platinum, any loss of platinum that may occur, and accrued expenses.
The computation is made by the Trustee as promptly as practicable after 4:00 p.m. (New York time). See “The Trust—Valuation
of Platinum; Computation of Net Asset Value” for a description of how the LBMA Platinum Price PM is determined, and description
of how the Trustee determines the NAV. The Trustee determines the Basket Amount for a given day by dividing the number of Ounces of platinum
held by the Trust as of the opening of business on that business day, adjusted for the amount of platinum constituting estimated accrued
but unpaid fees and expenses of the Trust as of the opening of business on that business day, by the quotient of the number of Shares
outstanding at the opening of business divided by 50,000. Fractions of an Ounce of platinum smaller than 0.001 Ounce are disregarded
for purposes of the computation of the Basket Amount. The Basket Amount so determined is communicated via electronic mail message to
all Authorized Participants, and made available on the Sponsor’s website for the Shares. The Exchange also publishes the Basket
Amount determined by the Trustee as indicated above.
Because
the Sponsor has assumed what are expected to be most of the Trust’s expenses, and the Sponsor’s Fee accrues daily at the
same rate (i.e., 1/365th of the net asset value of the Trust multiplied by 0.50%), in the absence of any extraordinary expenses or liabilities,
the amount of platinum by which the Basket Amount decreases each day is predictable. Authorized Participants may use that indicative
Basket Amount as guidance regarding the amount of platinum that they may expect to have to deposit with the Custodian in respect of purchase
orders placed by them on such next business day and accepted by the Trustee. The Authorized Participant Agreement provides, however,
that once a purchase order has been accepted by the Trustee, the Authorized Participant will be required to deposit with the Custodian
the Basket Amount determined by the Trustee on the effective date of the purchase order.
No
Shares are issued unless and until the Custodian has informed the Trustee that it has allocated to the Trust Allocated Account (other
than up to 192 Ounces, which may be held in the Trust Unallocated Account) the corresponding amount of platinum.
Redemption
of Baskets
Authorized
Participants, acting on authority of the registered holder of Shares or on their own account, may surrender Baskets of Shares in exchange
for the corresponding Basket Amount announced by the Trustee. Upon the surrender of such Shares and the payment of the Trustee’s
applicable fee and of any expenses, taxes or charges (such as stamp taxes or stock transfer taxes or fees), the Trustee will deliver
to the order of the redeeming Authorized Participant the amount of platinum corresponding to the redeemed Baskets. Shares can only be
surrendered for redemption in Baskets of 50,000 Shares each.
Before
surrendering Baskets of Shares for redemption, an Authorized Participant must deliver to the Trustee a written request indicating the
number of Baskets it intends to redeem or on a business day when the LBMA Platinum Price PM or other applicable benchmark price is not
announced. The date the Trustee receives that order determines the Basket Amount to be received in exchange. However, orders received
by the Trustee after 3:59 p.m. (New York time) on a business day or on a business day when the LBMA Platinum Price PM or other applicable
benchmark price is not announced, will not be accepted.
The
redemption distribution from the Trust will consist of a credit to the redeeming Authorized Participant’s unallocated account representing
the amount of the platinum held by the Trust evidenced by the Shares being redeemed as of the date of the redemption order. Fractions
of an Ounce included in the redemption distribution smaller than 0.001 of an Ounce are disregarded. The redemption distribution will
not be delivered unless and until all of the Shares to be redeemed have been received by the Trustee.
In
connection with any issuance or redemption of Shares, the Authorized Participant shall be responsible for paying or reimbursing to the
Custodian and the Trustee the amount of any applicable tax, fees or other governmental charge that may be due in connection with the
transfer of platinum and the issuance and delivery of Shares, and any expense associated with the delivery of platinum other than by
credit to an Authorized Participant’s unallocated account with the Custodian.
Redemptions
may be suspended, or the date for delivery of platinum may be postponed, only (i) during any period in which regular trading on the Exchange
is suspended or restricted or the Exchange is closed (other than scheduled holiday or weekend closings), or (ii) during an emergency
as a result of which delivery, disposal or evaluation of platinum is not reasonably practicable. Neither the Trustee nor the Sponsor
will be liable to any person by reason of any such suspension or postponement.
Certificates
Evidencing the Shares
The
Shares are evidenced by certificates executed and delivered by the Trustee on behalf of the Trust. DTC has accepted the Shares for settlement
through its book-entry settlement system. So long as the Shares are eligible for DTC settlement, there will be only one or more global
certificates evidencing Shares that will be registered in the name of a nominee of DTC. Investors will be able to own Shares only in
the form of book-entry security entitlements with DTC or direct or indirect participants in DTC. No investor will be entitled to receive
a separate certificate evidencing Shares. Because Shares can only be held in the form of book-entries through DTC and its participants,
investors must rely on DTC, a DTC participant and any other financial intermediary through which they hold Shares to receive the benefits
and exercise the rights described in this section. Investors should consult with their broker or financial institution to find out about
the procedures and requirements for securities held in DTC book-entry form.
Cash
and Other Distributions
If
the Sponsor and Trustee determine that there is more cash being held in the Trust than is needed to pay the Trust’s expenses for
the next month, the Trustee will distribute the extra cash to DTC for further distribution to the Shareholders.
If
the Trust receives any property other than platinum or cash, the Trustee will distribute that property in proportion to the number of
Shares owned by any means the Sponsor thinks is lawful, equitable and feasible. If the Sponsor is of the opinion that the distribution
cannot be made in that way, the Trustee will adopt a method the Sponsor deems lawful, equitable and feasible for the purpose of effecting
the distribution, including the public or private sale of the property, or any part thereof, and the net proceeds shall be distributed
in the same manner as a distribution of cash. Such distributions shall be made after deduction or upon payment of the expenses of the
Trustee.
Registered
holders of Shares are entitled to receive these distributions in proportion to the number of Shares owned. Before making a distribution,
the Trustee may deduct any applicable withholding taxes and governmental charges and any expenses of the Trustee that have not been paid.
The Trustee distributes only whole dollars and cents and shall round fractional cents down to the nearest whole cent. Shareholders of
record on the record date fixed by the Trustee for a distribution will be entitled to receive their pro rata portion of any distribution.
If
the Trust is terminated and liquidated, the Trustee will distribute to the Shareholders in exchange for their Shares their pro rata share
of any amounts remaining after the satisfaction of all outstanding liabilities of the Trust and the establishment of such reserves for
applicable taxes, other governmental charges and contingent or future liabilities as the Trustee shall determine. See “Description
of the Shares and the Trust Agreement—Amendment and Termination.”
Voting
Rights
The
Shares do not represent a traditional investment and you should not view them as similar to “shares” of a corporation operating
a business enterprise with management and a board of directors. As a Shareholder, you will not have the statutory rights normally associated
with the ownership of shares of a corporation, including, for example, the right to bring “oppression” or “derivative”
actions. All Shares are of the same class with equal rights and privileges. Each Share is transferable, is fully paid and non-assessable
and entitles the holder to vote on the limited matters upon which Shareholders may vote under the Trust Agreement. The Shares do not
entitle their holders to any conversion or pre-emptive rights or any redemption rights or rights to distributions. However, registered
holders of at least 25% of the Shares have the right to require the Trustee to cure any material breach by it of the Trust Agreement,
and registered holders of at least 75% of the Shares have the right to require the Trustee to terminate the Trust Agreement as described
below. In addition, certain amendments to the Trust Agreement require advance notice to the Shareholders before the effectiveness of
such amendments, but no Shareholder vote or approval is required for any amendment to the Trust Agreement.
Fees
and Expenses of the Trustee
Each
deposit of platinum for the creation of Baskets of Shares and each surrender of Baskets of Shares for the purpose of withdrawing Trust
property (including if the Trust Agreement terminates) must be accompanied by a payment to the Trustee of a fee of $500 (or such other
fee as the Trustee, with the prior written consent of the Sponsor, may from time to time announce).
The
Trustee is entitled to reimburse itself from the assets of the Trust for all expenses and disbursements incurred by it for extraordinary
services it may provide to the Trust or in connection with any discretionary action the Trustee may take to protect the Trust or the
interests of the holders.
Trust
Expenses and Platinum Sales
In
addition to the fee payable to the Sponsor (See “The Sponsor—The Sponsor’s Fee”), the following expenses are
paid out of the assets of the Trust:
| |
- |
any
expenses or liabilities of the Trust and the Trustee that are not assumed by the Sponsor; |
| |
|
|
| |
- |
any
taxes and other governmental charges that may fall on the Trust or its property; |
| |
|
|
| |
- |
expenses
and costs of any action taken by the Trustee or the Sponsor to protect the Trust and the rights and interests of holders of Shares;
and |
| |
|
|
| |
- |
any
indemnification of the Trustee or the Sponsor as described below. |
The
Trustee may sell the Trust’s platinum from time to time as necessary to permit payment of the fees and expenses that the Trust
is required to pay. See “The Trust—Trust Expenses.”
The
Trustee and the Sponsor shall not be responsible for any depreciation or loss incurred by reason of sales of platinum made in compliance
with the Trust Agreement, including upon termination of the Trust Agreement.
Payment
of Taxes
The
Trustee may deduct the amount of any taxes owed from any distributions it makes. It may also sell trust assets, by public or private
sale, to pay any taxes owed. Authorized Participants are responsible for any transfer tax, sales or use tax, recording tax, value added
tax or similar tax or other governmental charge applicable to the creation or redemption of Baskets regardless of whether such tax or
charge is imposed directly on the Authorized Participant. By placing a purchase order or redemption order, the Authorized Participant
agrees to indemnify the Sponsor, the Trustee and the Trust if any of them is required by law to pay any such tax or charge, together
with any applicable penalties, additions to tax and interest thereon.
Evaluation
of Platinum and the Trust Assets
See
“The Trust—Valuation of Platinum; Computation of Net Asset Value.”
Amendment
and Termination
The
Sponsor and the Trustee may agree to amend the Trust Agreement (except with respect to giving the Trustee the power to vary the Trust’s
investments) without the consent of the Shareholders. If an amendment imposes or increases fees or charges, except for taxes and other
governmental charges, registration fees or other such expenses, or prejudices a substantial right of holders of Shares, it will not become
effective for outstanding Shares until 30 days after the Trustee notifies DTC of the amendment. At the time an amendment becomes effective,
by continuing to hold Shares, registered and beneficial owners of Shares are deemed to agree to the amendment and to be bound by the
Trust Agreement as amended.
The
Trustee will terminate the Trust Agreement if:
| |
- |
the
Trustee is notified that the Shares are delisted from the Exchange and are not approved for listing on another national securities
exchange within five business days of their delisting; |
| |
|
|
| |
-
|
Shareholders
acting in respect of at least 75% of the outstanding Shares notify the Trustee that they elect to terminate the Trust; |
| |
|
|
| |
-
|
60
days have elapsed since the Trustee notified the Sponsor of the Trustee’s election to resign or since the Sponsor removed the
Trustee, and a successor trustee has not been appointed and accepted its appointment; |
| |
|
|
| |
-
|
any
sole Custodian then acting resigns or is removed and no successor custodian has been employed within 60 days of such resignation
or removal; |
| |
|
|
| |
-
|
the
SEC determines that the Trust is an investment company under the Investment Company Act, and the Trustee has actual knowledge of
that determination; |
| |
|
|
| |
-
|
the
CFTC determines that (i) the Trust is a commodity pool under the Commodity Exchange Act; and/or (ii) the Shares constitute “commodity
interests”, as defined by the CFTC or in CFTC Regulation 1.3(yy) and the Trustee has actual knowledge of that determination; |
| |
|
|
| |
-
|
the
aggregate market capitalization of the Trust, based on the closing price for the Shares, is less than $50 million (as adjusted for
inflation by reference to the U.S. Consumer Price Index) at any time more than 18 months after the Trust’s formation, and the
Trust receives, within 6 months after the last trading date on which such capitalization was less than $50 million, notice from the
Sponsor of its decision to terminate the Trust; |
| |
|
|
| |
-
|
the
Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust under the Code, or under any comparable provision
of any other jurisdiction where such treatment is sought, and the Trustee receives notice that the Sponsor has determined that the
termination of the Trust is advisable; or |
| |
|
|
| |
- |
60
days have elapsed since DTC ceases to act as depository with respect to the Shares and the Sponsor has not identified another depository
which is willing to act in such capacity. |
If
the Sponsor resigns without appointing a successor sponsor, is dissolved or ceases to exist as a legal entity for any reason, or is deemed
to have resigned because (1) it fails to undertake or perform, or becomes incapable of undertaking or performing, any of the duties required
by the Trust Agreement, and such failure or incapacity is not cured, or (2) the Sponsor is adjudged bankrupt or insolvent, or a receiver
of the Sponsor or of its property is appointed, or a trustee or liquidator or any public officer takes charge or control of the Sponsor
or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, the Sponsor shall be deemed to have resigned,
in which case the Trustee may, among other actions, terminate and liquidate the Trust.
The
Trustee will notify DTC at least 30 days before the date for termination of the Trust Agreement. After termination, the Trustee and its
agents will do the following under the Trust Agreement but nothing else: (i) collect distributions pertaining to Trust property; (ii)
pay the Trust’s expenses and sell platinum as necessary to meet those expenses; and (iii) deliver Trust property to Authorized
Participants upon surrender of Shares. 60 days or more after termination, the Trustee will sell any remaining Trust property. After that,
the Trustee will hold the money it received on the sale, as well as any other cash it is holding under the Trust Agreement, for the pro
rata benefit of the registered holders that have not surrendered their Shares and will deliver to such registered holders against the
surrender of their Shares their pro rata portion thereof. It will not invest the money and has no liability for interest. The Trustee
will deduct from any delivery to Authorized Participants or registered holders of Shares any applicable fees, Trust expenses and taxes
and governmental charges.
The
Sponsor
This
section summarizes some of the important provisions of the Trust Agreement which apply to the Sponsor. For a general description of the
Sponsor’s role concerning the Trust, see “The Sponsor—The Sponsor’s Role.”
Liability
of the Sponsor and Indemnification
The
Sponsor is required to perform its obligations under the Trust Agreement without gross negligence, willful misconduct or bad faith. Otherwise,
the Sponsor has no obligation, and will not be liable, to any Shareholder, Authorized Participant or other person under the Trust Agreement.
Additionally, the Sponsor will not have any liability to any Shareholder, Authorized Participant or other person if it is prevented or
delayed by law or circumstances beyond its control from performing its obligations under the Trust Agreement, or for any act or omission
it made in reliance upon information or advice from legal counsel, accountants, any Authorized Participant, Shareholder or other person
believed by it in good faith to be competent to give such information or advice. The Sponsor has no obligation to prosecute any action,
suit or proceeding in respect of any Trust property or in respect of the Shares on behalf of a Shareholder, Authorized Participant or
other person, or to comply with any direction or instruction from a Shareholder or Authorized Participant regarding Shares, unless specifically
required to do so by the Trust Agreement.
The
Sponsor and its members, managers, directors, officers, employees, agents and affiliates (as such term is defined under the Securities
Act) and subsidiaries shall be indemnified from the Trust and held harmless against any loss, liability, or expense (including reasonable
fees and expenses of legal counsel) arising out of or in connection with the performance of its obligations under the Trust Agreement
and under each other agreement entered into by the Sponsor in furtherance of the administration of the Trust (including Authorized Participant
agreements to which the Sponsor is a party, including the Sponsor’s indemnification obligations thereunder) or any actions taken
in accordance with the provisions of the Trust Agreement to the extent such loss, liability or expense was incurred without (1) gross
negligence, bad faith, willful misconduct or willful malfeasance on the part of such indemnified party in connection with the performance
of its obligations under the Trust Agreement or any such other agreement or any actions taken in accordance with the provisions of the
Trust Agreement or any such other agreement, or (2) reckless disregard on the part of such indemnified party of its obligations and duties
under the Trust Agreement or any such other agreement. Such indemnity shall include payment from the Trust of the reasonable costs and
expenses incurred by such indemnified party in investigating or defending itself against any claim or liability in its capacity as Sponsor.
Any amounts payable to an indemnified party may be payable in advance or shall be secured by a lien on the Trust’s assets. The
Sponsor may, in its discretion, undertake any action which it may deem necessary or desirable in respect of the Trust Agreement and the
interests of the Shareholders and, in such event, the reasonable legal expenses and costs of any such actions shall be expenses and costs
of the Trust and the Sponsor shall be entitled to be reimbursed therefor by the Trust.
Successor
Sponsors
If
the Sponsor fails to undertake or perform, or becomes incapable of undertaking or performing, any of its duties and such failure or incapacity
is not cured within 30 days following receipt of notice from the Trustee of such failure or incapacity, or if the Sponsor is adjudged
bankrupt or insolvent, or a receiver of the Sponsor or of its property is appointed, or a trustee or liquidator or any public officer
takes charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Trustee may (1) appoint a successor sponsor, (2) agree to act as the sponsor, or (3) terminate and liquidate
the Trust and distribute its remaining assets. The Trustee has no obligation to appoint a successor sponsor or to assume the duties of
the Sponsor and will have no liability to any person because the Trust is or is not terminated as described in the preceding sentence.
The
Trustee
This
section summarizes some of the important provisions of the Trust Agreement which apply to the Trustee. For a general description of the
Trustee’s role concerning the Trust, see “The Trustee—The Trustee’s Role.”
Qualifications
of the Trustee
The
Trustee and any successor trustee must be (1) a bank, trust company, corporation or national banking association organized and doing
business under the laws of the United States or any of its states, and authorized under such laws to exercise corporate trust powers,
(2) a participant in DTC or such other securities depository as shall then be acting with respect to Shares, and (3) unless counsel to
the Sponsor, the appointment of which is acceptable to the Trustee, determines that such requirement is not necessary for the exception
under Section 408(m)(3)(B) of the Code, to apply, a banking institution as defined in Code Section 408(n). The Trustee and any successor
trustee must have, at all times, an aggregate capital, surplus, and undivided profits of at least $150 million.
General
Duty of Care of Trustee
The
Trustee is a fiduciary under the Trust Agreement; provided, however, that the fiduciary duties and responsibilities and liabilities of
the Trustee are limited by, and are only those specifically set forth in, the Trust Agreement. For limitations of the fiduciary duties
of the Trustee, see the limitations on liability set forth in “Description of the Shares and the Trust Agreement—The Trustee.”
Limitation
on Trustee’s Liability
The
Trustee is required to perform its obligations under the Trust Agreement without gross negligence, willful misconduct or bad faith. Otherwise
the Trustee has no obligations, and will not be liable to any Shareholder, Authorized Participant or other person, under the Trust Agreement.
The Trustee will not have any liability to any Shareholder or Authorized Participant if it is prevented or delayed by law or circumstances
beyond its control from performing its obligations under the Trust Agreement, or for any act or omission it made in reliance upon information
or advice from legal counsel, accountants, any Authorized Participant, any Shareholder or any other person believed by it in good faith
to be competent to give such information or advice. The Trustee has no obligation to comply with any direction or instruction from any
Shareholder or Authorized Participant regarding Shares, unless specifically required to do so by the Trust Agreement. In no event will
the Trustee be liable for acting in accordance with or conclusively relying upon any instruction, notice, demand, certificate or document
(1) from the Sponsor or a Custodian or any entity acting on behalf of either which the Trustee believes is given pursuant to or is authorized
by the Trust Agreement or a Custody Agreement, respectively; or (2) from or on behalf of any Authorized Participant which the Trustee
believes is given pursuant to or is authorized by an Authorized Participant Agreement (provided that the Trustee has complied with any
verification procedures specified in the Authorized Participant Agreement). The Trustee will not be liable for any indirect, consequential,
punitive or special damages, regardless of the form of action and whether or not any such damages were foreseeable or contemplated, or
for an amount in excess of the value of the Trust’s assets.
Trustee’s
Liability for Custodial Services and Agents
The
Trustee will not be answerable for the default of the Custodian or any other custodian of the Trust’s platinum employed at the
direction of the Sponsor or selected by the Trustee with reasonable care. The Trustee does not monitor the performance of the Custodian
or any sub-custodian other than to review the reports provided by the Custodian pursuant to the Custody Agreements. The Trustee may also
employ custodians for Trust assets other than platinum, agents, attorneys, accountants, auditors and other professionals and shall not
be answerable for the default or misconduct of any of them if they were selected with reasonable care. The fees and expenses charged
by custodians for the custody of platinum and related services, agents, attorneys, accountants, auditors or other professionals, and
expenses reimbursable to any custodian under a custody agreement authorized by the Trust Agreement, exclusive of fees for services to
be performed by the Trustee, will be expenses of the Sponsor or the Trust. Fees paid for the custody of assets other than platinum will
be an expense of the Trustee.
Taxes
The
Trustee will not be personally liable for any taxes or other governmental charges imposed upon the platinum or its custody, moneys or
other Trust assets, or on the income therefrom or the sale or proceeds of the sale thereof, or upon it as Trustee (except that it shall
be personally liable for any income or other taxes on the amounts it receives from the Sponsor for its fee for acting as Trustee and
for reimbursement for out-of-pocket expenses) or upon or in respect of the Trust or the Shares which it may be required to pay under
any present or future law of the United States of America or of any other taxing authority having jurisdiction in the premises. For all
such taxes and charges and for any expenses, including reasonable counsel’s fees, which the Trustee may sustain or incur with respect
to such taxes or charges, the Trustee will be reimbursed and indemnified out of the Trust’s assets and the payment of such amounts
shall be secured by a lien on the Trust’s assets.
Indemnification
of the Trustee
The
Trustee and its directors, officers, employees, shareholders, agents and affiliates (as such term is defined under the Securities Act)
shall be indemnified from the Trust and held harmless against any loss, liability or expense (including the reasonable fees and expenses
of counsel) arising out of or in connection with the performance of its obligations under the Trust Agreement and under each other agreement
entered into by the Trustee in furtherance of the administration of the Trust (including the Custody Agreements and any Authorized Participant
Agreement, including the Trustee’s indemnification obligations thereunder) or otherwise by reason of the Trustee’s acceptance
or administration of the Trust, to the extent such loss, liability or expense was incurred without (i) gross negligence, bad faith, willful
misconduct or willful malfeasance on the part of such indemnified party in connection with the performance of its obligations under the
Trust Agreement or any such other agreement or any actions taken in accordance with the provisions of the Trust Agreement or any such
other agreement or (ii) reckless disregard on the part of such indemnified party of its obligations and duties under the Trust Agreement
or any such other agreement. Such indemnity shall include payment from the Trust of the costs and expenses incurred by such indemnified
party in investigating or defending itself against any claim or liability. Any amounts payable to an indemnified party may be payable
in advance or shall be secured by a lien on the Trust’s assets.
Indemnity
for Actions Taken to Protect the Trust
The
Trustee is under no obligation to appear in, prosecute or defend any action that in its opinion may involve it in expense or liability,
unless it is furnished with reasonable security and indemnity against the expense or liability. Subject to the preceding conditions,
the Trustee may, in its sole discretion, undertake such action as it may deem necessary or desirable to protect the Trust and the rights
and interests of all Shareholders pursuant to the terms of the Trust Agreement. The expenses, costs and disbursements incurred by the
Trustee in connection with taking any action under the preceding sentence (including the reasonable fees and disbursements of legal counsel)
shall be expenses of the Trust, and shall be deductible from, and constitute a lien on, the assets of the Trust.
Protection
for Amounts Due to Trustee
If
any fees or costs owed to the Trustee under the Trust Agreement are not paid when due by the Sponsor, the Trustee may charge those amounts
to the Trust, in any amount not exceeding the amount that could be charged to the Trust in respect of the Sponsor’s Fee (without
regard to whether the Sponsor may not be entitled to such fee due to its default, waiver or other reason), and any subsequent amount
paid to the Sponsor as its fee shall be net of the amounts withheld. The Trustee’s right of reimbursement shall be secured by a
lien on amounts chargeable to the Trust for the Sponsor’s Fee, without giving effect to any fee waiver, which shall have priority
over the interest of the Sponsor, the Shareholders and any other person.
Holding
of Trust Property Other Than Platinum
The
Trustee will hold and record the ownership of the Trust’s assets in a manner so that it will be owned by the Trust and the Trustee
as trustee thereof for the benefit of the Shareholders for the purposes of, and subject to and limited by the terms and conditions set
forth in, the Trust Agreement. Other than issuance of the Shares, the Trust shall not issue or sell any certificates or other obligations
or, except as provided in the Trust Agreement, otherwise incur, assume or guarantee any indebtedness for money borrowed.
All
moneys held by the Trustee shall be held by it, without interest thereon or investment thereof, as a deposit for the account of the Trust.
Such monies held shall be deemed segregated by maintaining such monies in an account or accounts for the exclusive benefit of the Trust.
The Trustee may also employ custodians for Trust assets other than platinum, agents, attorneys, accountants, auditors and other professionals
and shall not be answerable for the default or misconduct of any of them if they were selected with reasonable care. Any Trust assets
other than platinum or cash will be held by the Trustee either directly or through the commercial book-entry system operated by the Federal
Reserve Banks (“Book Entry System”), DTC, or through any other clearing agency or similar system (“Clearing Agency”),
if available. The Trustee will have no responsibility or liability for the actions or omissions of the Book Entry System, DTC or any
Clearing Agency. The Trustee shall not be liable for ascertaining or acting upon any calls, conversions, exchange offers, tenders, interest
rate changes, or similar matters relating to securities held at DTC.
Resignation,
Discharge or Removal of Trustee; Successor Trustees
The
Trustee may at any time resign as Trustee by written notice of its election so to do, delivered to the Sponsor, and such resignation
shall take effect upon the appointment of a successor Trustee and its acceptance of such appointment.
The
Sponsor may remove the Trustee in its sole discretion by written notice delivered to the Trustee not more than 120 days and at least
90 days prior to the fifth anniversary of the date of the Trust Agreement or, thereafter, by written notice delivered to the Trustee
not more than 120 days and at least 90 days prior to the last day of any subsequent three-year period.
The
Sponsor may also remove the Trustee at any time if the Trustee (1) ceases to be a Qualified Bank (as defined below), (2) is in material
breach of its obligations under the Trust Agreement and fails to cure such breach within 30 days after receipt of written notice from
the Sponsor or Shareholders acting on behalf of at least 25% of the outstanding Shares specifying such default and requiring the Trustee
to cure such default, or (3) fails to consent to the implementation of an amendment to the Trust’s initial Internal Control Over
Financial Reporting deemed necessary by the Sponsor and, after consultations with the Sponsor, the Sponsor and the Trustee fail to resolve
their differences regarding such proposed amendment. Under such circumstances, the Sponsor, acting on behalf of the Shareholders, may
remove the Trustee by written notice delivered to the Trustee and such removal shall take effect upon the appointment of a successor
Trustee and its acceptance of such appointment.
A
“Qualified Bank” means a bank, trust company, corporation or national banking association organized and doing business under
the laws of the United States or any State of the United States that is authorized under those laws to exercise corporate trust powers
and that (i) is a DTC Participant or a participant in such other depository as is then acting with respect to the Shares; (ii) unless
counsel to the Sponsor, the appointment of which is acceptable to the Trustee, determines that the following requirement is not necessary
for the exception under Section 408(m)(3) of the Code, to apply, is a banking institution as defined in Section 408(n) of the Code and
(iii) had, as of the date of its most recent annual financial statements, an aggregate capital, surplus and undivided profits of at least
$150 million.
The
Sponsor may also remove the Trustee at any time if the Trustee merges into, consolidates with or is converted into another corporation
or entity in a transaction in which the Trustee is not the surviving entity. The surviving entity from such a transaction shall be the
successor of the Trustee without the execution or filing of any document or any further act; however, during the 90-day period following
the effectiveness of such transaction, the Sponsor may, by written notice to the successor Trustee, remove the Trustee and designate
a successor Trustee.
If
the Trustee resigns or is removed, the Sponsor, acting on behalf of the Shareholders, shall use its reasonable efforts to appoint a successor
Trustee, which shall be a Qualified Bank. Every successor Trustee shall execute and deliver to its predecessor and to the Sponsor, acting
on behalf of the Shareholders, an instrument in writing accepting its appointment, and thereupon such successor Trustee, without any
further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor,
nevertheless, upon payment of all sums due it and on the written request of the Sponsor, acting on behalf of the Shareholders, shall
execute and deliver an instrument transferring to such successor all rights and powers of such predecessor, shall duly assign, transfer
and deliver all right, title and interest in the Trust’s assets to such successor, and shall deliver to such successor a list of
the registered owners of all outstanding Shares. The Sponsor or any such successor Trustee shall promptly give notice of the appointment
of such successor Trustee to the Shareholders.
If
the Trustee resigns and a successor trustee has not been appointed and accepted its appointment within 60 days after the date the Trustee
issues its notice of resignation, the Trustee will terminate and liquidate the Trust and distribute its remaining assets.
The
Custodian and Custody of the Trust’s Platinum
In
addition to this section, see “The Custodian—The Custodian’s Role” for a summary of some of the important provisions
of the Trust Agreement which apply to the Custodian and the custody of the Trust’s platinum.
The
Trustee, on behalf of the Trust, will enter into the Custody Agreements with the Custodian.
The
Sponsor will appoint accountants, auditors, or other inspectors to audit or examine the accounts and operations of the Custodian and
any successor custodian or additional custodian at such times as directed by the Sponsor as permitted by the Custody Agreements. The
Trustee has no obligation to monitor the activities of any Custodian other than to receive and review such reports of the platinum held
for the Trust by such Custodian and of transactions in platinum held for the account of the Trust made by such Custodian pursuant to
the Custody Agreements.
Appointment
and Removal of Custodians
The
Sponsor may direct the Trustee to employ one or more other custodians in addition to or in replacement of the Custodian, provided that
the Trustee shall not be answerable for the default of any custodian employed at the direction of the Sponsor or selected by the Trustee
with reasonable care. When directed by the Sponsor, the Trustee will employ one or more successor or additional custodians selected by
the Sponsor for the safekeeping of platinum and services in connection with the deposit and delivery of platinum.
The
Securities Depository; Book-Entry-Only System; Global Security
DTC
acts as securities depository for the Shares. DTC is a limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code,
and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of DTC Participants and to facilitate the clearance and settlement of transactions in those securities among DTC Participants
through electronic book-entry changes. This eliminates the need for physical movement of securities certificates. DTC Participants include
securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or
their representatives) own DTC. Access to the DTC system is also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly. DTC agrees with and represents
to DTC Participants that it will administer its book-entry system in accordance with its rules and by-laws and requirements of law.
Individual
certificates are not issued for the Shares. Instead, one or more global certificates are signed by the Trustee on behalf of the Trust,
registered in the name of Cede & Co., as nominee for DTC, and deposited with the Trustee on behalf of DTC. The global certificates
represent all of the Shares outstanding at any time.
Upon
the settlement date of any creation, transfer or redemption of Shares, DTC will credit or debit, on its book-entry registration and transfer
system, the number of Shares so created, transferred or redeemed to the accounts of the appropriate DTC Participants. The Trustee and
the DTC Participants will designate the accounts to be credited and charged in the case of creation or redemption of Shares.
Beneficial
ownership of the Shares is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants
and Indirect Participants. Owners of beneficial interests in the Shares will be shown on, and the transfer of ownership is effected only
through, records maintained by DTC, with respect to DTC Participants, the records of DTC Participants, with respect to Indirect Participants,
and the records of Indirect Participants with respect to beneficial owners that are not DTC Participants or Indirect Participants. Beneficial
owners are expected to receive from or through a DTC Participant a written confirmation relating to their purchase of the Shares.
Investors
may transfer Shares through DTC by instructing the DTC Participant or Indirect Participant through which they hold their Shares to transfer
the Shares. Transfers will be made in accordance with standard securities industry practice.
DTC
may decide to discontinue providing its service for the Shares by giving notice to the Trustee and the Sponsor. Under these circumstances,
the Sponsor will either find a replacement for DTC to perform its functions at a comparable cost or, if a replacement is unavailable,
the Trustee will terminate the Trust.
The
rights of the Shareholders generally must be exercised by DTC Participants acting on their behalf in accordance with the rules and procedures
of DTC.
The
Trust Agreement provides that, as long as the Shares are eligible for deposit with DTC, the sole registered owner will be DTC or its
nominee and transfer of Shares will be effected solely by DTC in accordance with its customary practices from time to time.
The
Sponsor
The
Sponsor is a Delaware limited liability company and was formed on January 6, 2017. The Sponsor’s office is located at 222 Broadway,
21st Floor, New York, New York 10038. Under the Delaware Limited Liability Company Act and the governing documents of the
Sponsor, the sole member of the Sponsor, GraniteShares, Inc., is not responsible for the debts, obligations and liabilities of the Sponsor
solely by reason of being the sole member of the Sponsor.
The
Sponsor’s Role
The
Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering
in the United States and the listing of the Shares on the Exchange. The Sponsor assumed the organizational expenses of the Trust and
has agreed to assume the following expenses incurred by the Trust: the Trustee’s monthly fee and its ordinary out-of-pocket expenses,
the Custodian’s Fee and its reimbursable expenses, Exchange listing fees, SEC registration fees, marketing expenses, printing and
mailing costs, audit fees and expenses and up to $500,000 per annum in legal fees and expenses.
The
Sponsor will not exercise day-to-day oversight over the Trustee or the Custodian. The Sponsor may remove the Trustee and appoint a successor
Trustee (i) if the Trustee ceases to meet certain objective requirements (including the requirement that it have capital, surplus and
undivided profits of at least $150 million), (ii) if, having received written notice of a material breach of its obligations under the
Trust Agreement, the Trustee has not cured the breach within 30 days, or (iii) if the Trustee refuses to consent to the implementation
of an amendment to the Trust’s initial Internal Control Over Financial Reporting. The Sponsor also has the right to replace the
Trustee during the 90 days following any merger, consolidation or conversion in which the Trustee is not the surviving entity or, in
its discretion, on the fifth anniversary of the creation of the Trust or on any subsequent third anniversary thereafter. The Sponsor
also has the right to direct the Trustee to appoint any new or additional Custodian that the Sponsor selects.
The
Sponsor has developed a marketing plan for the Trust, prepares marketing materials regarding the Shares, including the content of the
Trust’s website, and executes the marketing plan for the Trust on an ongoing basis.
Management
of the Sponsor
The
Trust does not have any directors, officers or employees. The creation and operation of the Trust has been arranged by the Sponsor. The
Sponsor is not governed by a board of directors. The principals and executive officers of the Sponsor are as follows:
William
Rhind has been the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the Sponsor
since its inception on January 6, 2017. Prior to forming the Sponsor and becoming its CEO and CFO, Mr. Rhind was the CEO of World Gold
Trust Services, LLC (“WGTS”) from September 2014 to February 2016. WGTS is the sponsor of SPDR® Gold Trust, the largest
gold fund in the world, and is a wholly-owned subsidiary of the World Gold Council, a market development organization for the gold industry.
Mr. Rhind also served as the Managing Director, Institutional Investment, of the World Gold Council from September 2013 to February 2016.
From March 2007 to September 2013, Mr. Rhind was employed by ETF Securities, an independent exchange-traded product provider, in a number
of leadership roles, including as Managing Director from June 2009 to September 2013. In that role, Mr. Rhind managed the company’s
U.S. exchange traded fund business. Prior to joining ETF Securities, Mr. Rhind was a Principal for the iShares unit of Barclays Global
Investors. He began his career as an investment banking analyst at Nomura International in London. Mr. Rhind earned a Bachelor of Arts
in Modern Languages (French & Russian) and European Studies from the University of Bath in England. Mr. Rhind is 44 years old.
Benoit
Autier has been the Chief Accounting Officer (“CAO”) of the Sponsor since its inception on January 6, 2017. Mr. Autier
was previously the Head of Product Management for the World Gold Council from September 2015 to October 2016. Mr. Autier worked at ETF
Securities, an independent exchange-traded product provider, from July 2005 to August 2015 as Head of Product Management. Mr. Autier
previously was employed by KPMG in Paris as a senior consultant. Mr. Autier holds a Masters in Finance from London Business School. Mr.
Autier is 48 years old.
The
Sponsor’s Fee
The
Sponsor’s Fee accrues daily and is paid monthly in arrears at an annualized rate equal to 0.50% of the net asset value of the Trust.
The
Trustee
The
Bank of New York Mellon, a banking corporation organized under the laws of the State of New York with trust powers, serves as the Trustee.
The Bank of New York Mellon has a trust office at 240 Greenwich Street New York, NY 10286. The Bank of New York Mellon is subject to
supervision by the New York State Department of Financial Services and the Board of Governors of the Federal Reserve System. A copy of
the Trust Agreement is available for inspection at The Bank of New York Mellon’s trust office identified above. The Bank of New
York Mellon had at least $150 million in capital and retained earnings as of September 30, 2023.
The
Trustee’s Role
The
Trustee is responsible for the day-to-day administration of the Trust. This includes (i) processing orders for the creation and redemption
of Baskets; (ii) coordinating with the Custodian the receipt and delivery of platinum transferred to, or by, the Trust in connection
with each issuance and redemption of Baskets; (iii) calculating the net asset value of the Trust on each business day; and (iv) selling
the Trust’s platinum as needed to cover the Trust’s expenses. The Trustee intends to regularly communicate with the Sponsor
to monitor the overall performance of the Trust. The Trustee does not monitor the performance of the Custodian other than to review the
reports provided by the Custodian pursuant to the Custody Agreements. The Trustee, along with the Sponsor, will liaise with the Trust’s
legal, accounting and other professional service providers as needed. The Trustee will assist and support the Sponsor with the preparation
of the financial statements of the Trust and with all periodic reports required to be filed with the SEC on behalf of the Trust.
The
Trustee’s Fees are paid by the Sponsor.
The
Trustee and any of its affiliates may from time to time purchase or sell Shares for their own account, as agent for their customers and
for accounts over which they exercise investment discretion.
The
Custodian
ICBC
Standard Bank Plc, a public limited company incorporated under the laws of England and Wales, serves as the Custodian of the Trust’s
platinum.
The
Custodian’s Role
The
Custodian is responsible for holding the Trust’s allocated platinum as well as receiving and converting allocated and unallocated
platinum on behalf of the Trust. Unless otherwise agreed between the Trustee (as instructed by the Sponsor) and the Custodian, physical
platinum must be held by the Custodian at its London vault premises. At the end of each business day, the Custodian will hold no more
than 192 Ounces of unallocated platinum for the Trust, which corresponds to the maximum Ounce weight of Good Delivery Platinum or Ingot.
The Custodian converts the Trust’s platinum between allocated and unallocated platinum when: (1) Authorized Participants engage
in creation and redemption transactions with the Trust; or (2) platinum is sold to pay Trust expenses. The Custodian will facilitate
the transfer of platinum in and out of the Trust through the unallocated platinum accounts it may maintain for each Authorized Participant
or unallocated platinum accounts that may be maintained for an Authorized Participant by another LPPM-approved platinum-clearing bank,
and through the unallocated platinum account it will maintain for the Trust. The Custodian is responsible for allocating specific bars
of platinum to the Trust Allocated Account.
The
Custodian will provide the Trustee with regular reports detailing the platinum transfers in and out of the Trust Unallocated Account
with the Custodian and identifying the platinum bars held in the Trust Allocated Account.
The
Custodian’s fees and expenses are to be paid by the Sponsor. The Custodian and its affiliates may from time to time act as Authorized
Participants or purchase or sell platinum or shares for their own account, as an agent for their customers and for accounts over which
they exercise investment discretion. The Trustee, on behalf of the Trust, has entered into the Custody Agreements with the Custodian,
under which the Custodian maintains the Trust Unallocated Account and the Trust Allocated Account.
Pursuant
to the Trust Agreement, if, upon the resignation of the Custodian, there would be no custodian acting pursuant to the Custody Agreements,
the Trustee shall, promptly after receiving notice of such resignation, appoint a substitute custodian or custodians selected by the
Sponsor pursuant to custody agreement(s) approved by the Sponsor (provided, however, that the rights and duties of the Trustee under
the Trust Agreement and the custody agreement(s) shall not be materially altered without its consent). When directed by the Sponsor,
and to the extent permitted by, and in the manner provided by, the Custody Agreements, the Trustee shall remove the Custodian and appoint
a substitute or appoint an additional custodian or custodians selected by the Sponsor. Each such substitute or additional custodian shall,
forthwith upon its appointment, enter into a Custody Agreement in form and substance approved by the Sponsor. After the entry into the
Custody Agreements, the Trustee shall not enter into or amend any Custody Agreement with a custodian without the written approval of
the Sponsor (which approval shall not be unreasonably withheld or delayed). When instructed by the Sponsor, the Trustee shall demand
that a custodian of the Trust deliver such of the Trust’s platinum held by it as is requested of it to any other custodian or such
substitute or additional custodian or custodians directed by the Sponsor. In connection with such transfer of physical platinum, the
Trustee will, at the direction of the Sponsor, cause the physical platinum to be weighed or assayed. The Trustee shall have no liability
for any transfer of physical platinum or weighing or assaying of delivered physical platinum as directed by the Sponsor, and in the absence
of such direction shall have no obligation to effect such a delivery or to cause the delivered physical platinum to be weighed, assayed
or otherwise validated.
Under
the Trust Agreement, the Sponsor is responsible for appointing accountants, auditors or other inspectors to audit or examine the accounts
and operations of the Custodian and any successor custodian or additional custodian at such times as directed by the Sponsor as permitted
by the Custody Agreements. See “—Inspection of Platinum” for a summary of the provisions of the Custody Agreements
permitting the Sponsor and the Trustee and their identified representatives, independent public accountants and physical platinum auditors
to access the premises of the Custodian and to examine the physical platinum and records maintained by the Custodian pursuant to the
Custody Agreements. The Trustee has no obligation to monitor the activities of the Custodian other than to receive and review such reports
of the platinum held for the Trust by such Custodian and of transactions in platinum held for the account of the Trust made by such Custodian
pursuant to the Custody Agreements.
Description
of the Custody Agreements
The
Trustee has entered into the Custody Agreements with the Custodian on the Trust’s behalf. The Custody Agreements establish the
Trust Unallocated Account and the Trust Allocated Account with the Custodian and define the Custodian’s responsibilities to the
Trust.
Transfers
from the Trust Unallocated Account
The
Custodian will arrange for the transfer of platinum from the Trust Unallocated Account only in accordance with the Trustee’s instructions
to the Custodian. A transfer of platinum from the Trust Unallocated Account may only be made (1) by transferring platinum to an Authorized
Participant’s unallocated account, (2) by transferring platinum to the Trust Allocated Account, (3) the collection of physical
platinum from the Custodian at its vault premises or such other location as the Custodian may direct, at the Trust’s expense and
risk, (4) delivery of platinum to such location as the Trustee directs, at the Trust’s expense and risk, or (5) by transfer to
an account maintained by the Custodian or a third party on an unallocated basis in connection with the sale of platinum or other transfers
permitted under the Trust Agreement. Transfers made pursuant to clauses (3) and (4) are anticipated to be made only on an exceptional
basis, with transfers under clause (5) to include transfers made in connection with a sale of platinum to pay the Sponsor’s Fee
and any extraordinary expenses of the Trust not paid by the Sponsor or on the liquidation of the Trust. Any platinum made available in
physical form by the Custodian will be in a form that complies with the rules, regulations, practices, procedures and customs of the
LPPM, the Bank of England or any applicable regulatory body that apply to such platinum or in such other form as may be agreed between
the Trustee and the Custodian, the combined weight of which will not exceed the number of Ounces the Trustee has instructed the Custodian
to debit.
The
Custodian shall identify bars of a weight most closely approximating, but not exceeding, the balance in the Trust Unallocated Account
and shall transfer such weight from the Trust Unallocated Account to the Trust Allocated Account.
Right
to Refuse Transfers or Amend Transfer Procedures
The
Custodian will, where practicable, refuse to accept instructions to transfer platinum to or from the Trust Unallocated Account or the
Trust Allocated Account if, in the Custodian’s reasonable opinion, they are or may be contrary to the rules, regulations, practices,
procedures and customs of the LPPM or the Bank of England or contrary to any applicable law. The Custodian may amend the procedures for
transferring platinum to or from the Trust Unallocated Account or the Trust Allocated Account or impose such additional procedures in
relation to the transfer of platinum to or from the Trust Unallocated Account or the Trust Allocated Account where such amendment or
imposition is caused by a change in the rules, regulations, practices, procedures and customs of the LPPM or the Bank of England or other
applicable regulatory authority. The Custodian will, whenever practicable, notify the Trustee and the Sponsor within a commercially reasonable
time before the Custodian amends these procedures or imposes additional ones.
Trust
Unallocated Account Credit and Debit Balances
No
interest will be paid by the Custodian on any credit balance to the Trust Unallocated Account or the Trust Allocated Account. The Trust
Unallocated Account may not at any time have a debit or negative balance.
Exclusion
of Liability
The
Custodian will use reasonable care in the performance of its duties under the Custody Agreements and will only be responsible for any
loss or damage suffered by the Trustee or the Trust as a direct result of any negligence, fraud or willful default on its part in the
performance of its duties. In the case where platinum is lost or damaged, the Custodian’s liability under the Custody Agreements
is further limited to the market value of the platinum credited to the Trust Unallocated Account and the Trust Allocated Account at the
time such negligence, fraud or willful default is either discovered by the Custodian or notified to the Custodian by the Trustee.
Indemnity
The
Trustee will, solely out of and to the extent of the Trust’s assets, indemnify and keep indemnified the Custodian (on an after-tax
basis) on demand against all costs and expenses, damages, liabilities and losses (other than value added taxes and expenses assumed by
the Sponsor) that the Custodian may suffer or incur directly or indirectly in connection with the Custody Agreements, except to the extent
that such sums are due directly to the Custodian’s negligence, willful default or fraud.
Insurance
The
Custodian (or one of its affiliates) will maintain such insurance as it deems appropriate in connection with its custodial and other
obligations and will be responsible for all costs, fees and expenses (including any relevant taxes) arising from the insurance policy
or policies attributable to its relationship with the Trust. The Trustee and the Sponsor may, subject to confidentiality restrictions,
review the details of this insurance coverage from time to time upon reasonable prior notice. In the event the Custodian or one of its
affiliates elects to reduce, cancel or not renew the Custodian’s insurance, the Custodian will give the Trustee and the Sponsor
written notice of the election within 15 days thereafter.
Force
Majeure
The
Custodian will not be liable for any delay in performance or any non-performance of any of its obligations under the Custody Agreements
by reason of any cause beyond its reasonable control, including acts of God, war or terrorism or other breakdowns or acts set forth in
the Custody Agreements.
Reports
The
Custodian will provide the Trustee with reports for each London business day identifying (1) the credits and debits of platinum to the
Trust Unallocated Account and the Trust Allocated Account and (2) sufficient information to identify each bar of physical platinum held
in the Trust Allocated Account. The Custodian will provide notification to the Trustee on each London business day of (1) each separate
transaction transferring platinum to and from the Trust Unallocated Account and the Trust Allocated Account, (2) the amount of platinum
transferred to and from the Trust Allocated Account, and (3) the closing balance of platinum in the Trust Unallocated Account and the
Trust Allocated Account, and the Custodian will use commercially reasonable efforts to send the notification by 12:00 noon (New York
time). For each calendar month, the Custodian will provide the Trustee within a reasonable time after the end of the month a statement
of account for the Trust Allocated Account and the Trust Unallocated Account which shall include the opening and closing monthly balances
and all transfers to and from the Trust Allocated Account and the Trust Unallocated Account, accompanied by one or more weight lists
containing information sufficient to identify each bar of platinum held in the Trust Allocated Account as of the last London Business
Day of the calendar month. Under the Custody Agreements, a “business day” generally means any day that is a “London
Business Day,” when commercial banks generally and the London platinum market are open for the transaction of business in London.
Transfers
into the Trust Unallocated Account
The
Custodian will credit to the Trust Unallocated Account the amount of platinum it receives from an Authorized Participant’s unallocated
account. Additionally, in the ordinary course, the only platinum the Custodian will accept for credit to the Trust Unallocated Account
is platinum that has transferred from an Authorized Participant’s unallocated account or from the Trust Allocated Account.
Termination
The
Custody Agreements each have an initial five (5) year term and will automatically renew for successive one (1) year terms unless otherwise
terminated. The Trustee, upon instruction from the Sponsor, and the Custodian may each terminate any Custody Agreement for any reason
or for no reason upon 90 days’ prior written notice. Each Custody Agreement may also be terminated immediately upon written notice
as follows: (1) by the Trustee, if the Custodian ceases to offer the services contemplated by the Custody Agreement to its clients or
proposes to withdraw from the platinum bullion business, (2) by the Trustee or the Custodian, if it becomes unlawful for the Custodian
or the Trustee to have entered into the agreement or to provide or receive the services thereunder, (3) by the Custodian, if the Custodian
determines in its reasonable view that the Trust or the Sponsor is insolvent or faces impending insolvency, or by the Trustee, if the
Sponsor determines in its view that the Custodian or the Sponsor is insolvent or faces impending insolvency, (4) by the Trustee, if the
Trust is to be terminated, or (5) by the Trustee or the Custodian, if the other Custody Agreement ceases to be in full force and effect.
If
arrangements acceptable to the Custodian for redelivery of the balance in the Trust Unallocated Account or the platinum in the Trust
Allocated Account are not made, the Custodian may continue to maintain the Trust Unallocated Account and the Trust Allocated Account
and charge for its fees and expenses payable under the Trust Allocated Account Agreement, and, after six months from the termination
date, the Custodian may close the Trust Allocated Account and Trust Unallocated Account, sell the Trust’s platinum and account
to the Trustee for the proceeds.
Governing
Law
The
Custody Agreements are governed by English law. The Trustee and the Custodian both consent to the non-exclusive jurisdiction of the courts
of the State of New York and the federal courts located in the borough of Manhattan in New York City. Such consent is not required for
any person to assert a claim of New York jurisdiction over the Trustee or the Custodian.
Inspection
of Platinum
Under
the Custody Agreements, the Custodian will allow the Sponsor and the Trustee and their identified representatives, independent public
accountants and physical platinum auditors (currently Inspectorate International Limited, an entity owned by Bureau Veritas Group Company),
access to its premises upon reasonable notice during normal business hours, to examine the physical platinum and such records as they
may reasonably require to perform their respective duties with regard to investors in Shares. The Trustee agrees that any such access
shall be subject to execution of a confidentiality agreement and agreement to the Custodian’s security procedures, and any such
audit shall be at the Trust’s expense.
Custody
of the Trust’s Platinum
The
Custodian, as instructed by the Trustee on behalf of the Trust, is authorized to accept, on behalf of the Trust, deposits of platinum
in unallocated form. Acting on standing instructions specified in the Custody Agreements, the Custodian allocates platinum deposited
in unallocated form with the Trust by selecting plates or ingots of physical platinum for deposit to the Trust Allocated Account. All
physical platinum allocated to the Trust must conform to the rules, regulations, practices and customs of the LPPM (including without
limitation the good delivery rules of the LPPM).
Platinum
held for the Trust Allocated Account by the Custodian is held at the Custodian’s London vault. Platinum temporarily held by the
Custodian’s currently selected subcustodians and by subcustodians of subcustodians may be held in vaults located in England or
in other locations. When physical platinum is held for the Trust Allocated Account by a subcustodian, the Custodian will use, or where
applicable require any subcustodian to use, commercially reasonable efforts to promptly transport such physical platinum held on behalf
of the Trust to the Custodian’s London vault premises at the Custodian’s own cost and risk.
The
Custodian segregates by identification in its books and records the Trust’s platinum in the Trust Allocated Account from any other
platinum which it owns or holds for others and requires the subcustodians it selects to so segregate the Trust’s platinum held
by them. This requirement reflects the current custody practice in the London bullion market and, under the Trust Allocated Account Agreement,
the Custodian is deemed to have communicated such requirement by virtue of its participation in the London bullion market. The Custodian’s
books and records are expected, as a matter of current London bullion market custody practice, to identify every plate or ingot of platinum
held in the Trust Allocated Account in its own vault by refiner, assay, serial number and weight. Subcustodians selected by the Custodian
are also expected, as a matter of current industry practice, to identify in their books and records each plate or ingot of platinum held
for the Custodian by serial number and such subcustodians may use other identifying information.
The
Sponsor has contracted with physical platinum auditors to provide biannual inspections of the platinum plates and ingots held on behalf
of the Trust and the Custodian’s records concerning the Trust Allocated Account and the Trust Unallocated Account as they may be
reasonably required to perform their respective duties to Shareholders. One audit will be conducted at the end of the fiscal year (June
30) and the other at random, with the consent of the Custodian, on a date selected by the physical platinum auditors.
United
States Federal Income Tax Consequences
The
following discussion of the material United States federal income tax consequences that generally will apply to the purchase, ownership
and disposition of Shares by a U.S. Shareholder (as defined below), and certain United States federal income consequences that may apply
to an investment in Shares by a Non-U.S. Shareholder (as defined below), represents, insofar as it describes conclusions as to United
States federal income tax law and subject to the limitations and qualifications described therein, the opinion of Carlton Fields, special
United States federal income tax counsel to the Sponsor. The discussion below is based on the Internal Revenue Code of 1986, as amended
(the “Code”), Treasury Regulations promulgated thereunder and judicial and administrative interpretations of the Code, all
as in effect on the date of this Prospectus; no assurance can be given that future legislation, regulations, court decisions and/or administrative
pronouncements will not significantly change applicable law and materially affect the conclusions expressed herein, and any such change,
even though made after a Shareholder has invested in the Trust, could be applied retroactively. The tax treatment of Shareholders may
vary depending upon their own particular circumstances. This discussion does not purport to be complete or to deal with all aspects of
federal income taxation that may be relevant to an investor in light of its particular circumstances, including banks, thrift institutions
and certain other financial institutions, insurance companies, tax-exempt organizations, broker-dealers, traders, Shareholders that are
partnerships for United States federal income tax purposes, persons holding Shares as a position in a “hedging,” “straddle,”
“conversion,” or “constructive sale” transaction for United States federal income tax purposes, qualified pension
and profit-sharing plans, individual retirement accounts (IRAs), certain other tax-deferred accounts, U.S. expatriates, persons whose
“functional currency” is not the U.S. dollar, persons with “applicable financial statements” within the meaning
of Section 451(b) of the Code, or other investors with special circumstances) may be subject to special rules not discussed below. In
addition, the following discussion applies only to investors who will hold Shares as “capital assets” within the meaning
of Section 1221 of the Code. Moreover, the discussion below does not address the effect of any state, local or foreign tax law on
an owner of Shares. Purchasers of Shares are urged to consult their own tax advisers with respect to all federal, state, local and foreign
tax law considerations potentially applicable to their investment in Shares.
For
purposes of this discussion, a “U.S. Shareholder” is a Shareholder that is:
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individual who is treated as a citizen or resident of the United States for United States federal income tax purposes; |
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a
corporation (or entity treated as a corporation for United States federal income tax purposes) created or organized in or under the
laws of the United States, any state thereof or the District of Columbia; |
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an
estate, the income of which is includible in gross income for United States federal income tax purposes regardless of its source;
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a
trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial decisions of the trust, or a trust that has made a valid
election under applicable Treasury Regulations to be treated as a domestic trust. |
A
Shareholder that is not a U.S. Shareholder as defined above is considered a “Non-U.S. Shareholder” for purposes of this discussion.
If a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Shares, the tax treatment
of a partner generally depends upon the status of the partner and the activities of the partnership. If you are a partner of a partnership
holding Shares, the discussion below may not be applicable and we urge you to consult your own tax adviser for the U.S. federal tax implications
of the purchase, ownership and disposition of such Shares.
Taxation
of the Trust
The
Sponsor and the Trustee will treat the Trust as a “grantor trust” for United States federal income tax purposes. In the opinion
of Carlton Fields, special United States federal income tax counsel to the Sponsor, the Trust will be classified as a “grantor
trust” for United States federal income tax purposes. As a result, the Trust itself will not be subject to United States federal
income tax. Instead, the Trust’s income and expenses will “flow through” to the Shareholders, and the Trustee will
report the Trust’s income, gains, losses and deductions to the Internal Revenue Service (the “IRS”) on that basis.
The opinion of Carlton Fields, LLP represents only its best legal judgment and is not binding on the IRS or any court and does
not preclude the IRS from taking a contrary position. Accordingly, there can be no assurance that the IRS will agree with the conclusions
of counsel’s opinion and it is possible that the IRS or another tax authority could assert a position contrary to one or all of
those conclusions and that a court could sustain that contrary position. Neither the Sponsor nor the Trustee will request a ruling from
the IRS with respect to the classification of the Trust for United States federal income tax purposes. If the IRS were to assert successfully
that the Trust is not classified as a “grantor trust,” the Trust would likely be classified as a partnership for United States
federal income tax purposes, which may affect the timing and other tax consequences to the Shareholders and would require the Trust to
forward tax information on Schedule K-1 to investors.
The
following discussion assumes that the Trust will be classified as a “grantor trust” for United States federal income tax
purposes.
Taxation
of U.S. Shareholders
Shareholders
will be treated, for United States federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held
in the Trust. Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income,
if any, and as if they directly incurred their respective pro rata shares of the Trust’s expenses. In the case of a Shareholder
that purchases Shares for cash, its initial tax basis in its pro rata share of the assets held in the Trust at the time it acquires its
Shares will be equal to its cost of acquiring the Shares. In the case of a Shareholder that acquires its Shares as part of a creation
of a Basket, the delivery of platinum to the Trust in exchange for the underlying platinum represented by the Shares will not be a taxable
event to the Shareholder, and the Shareholder’s tax basis and holding period for the Shareholder’s pro rata share of the
platinum held in the Trust will be the same as its tax basis and holding period for the platinum delivered in exchange therefor. For
purposes of this discussion, and unless stated otherwise, it is assumed that all of a Shareholder’s Shares are acquired on the
same date and at the same price per Share. Shareholders that hold multiple lots of Shares, or that are contemplating acquiring multiple
lots of Shares, should consult their own tax advisers as to the determination of the tax basis and holding period for the underlying
platinum related to such Shares.
When
the Trust sells platinum, for example to pay expenses, a Shareholder will recognize gain or loss in an amount equal to the difference
between (a) the Shareholder’s pro rata share of the amount realized by the Trust upon the sale and (b) the Shareholder’s
tax basis for its pro rata share of the platinum that was sold. Such gain or loss will generally be long-term or short-term capital gain
or loss, depending upon whether the Shareholder has a holding period in its Shares of longer than one year. A Shareholder’s tax
basis for its share of any platinum sold by the Trust generally will be determined by multiplying the Shareholder’s total basis
for its share of all of the platinum held in the Trust immediately prior to the sale, by a fraction the numerator of which is the amount
of platinum sold, and the denominator of which is the total amount of the platinum held in the Trust immediately prior to the sale. After
any such sale, a Shareholder’s tax basis for its pro rata share of the platinum remaining in the Trust will be equal to its tax
basis for its share of the total amount of the platinum held in the Trust immediately prior to the sale, less the portion of such basis
allocable to its share of the platinum that was sold.
Upon
a Shareholder’s sale of some or all of its Shares, the Shareholder will be treated as having sold the portion or all, respectively,
of its pro rata share of the platinum held in the Trust at the time of the sale that is attributable to the Shares sold. Accordingly,
the Shareholder generally will recognize gain or loss on the sale in an amount equal to the difference between (a) the amount realized
pursuant to the sale of the Shares, and (b) the Shareholder’s tax basis for the portion of its pro rata share of the platinum held
in the Trust at the time of sale that is attributable to the Shares sold, as determined in the manner described in the preceding paragraph.
A
redemption of some or all of a Shareholder’s Shares in exchange for the underlying platinum represented by the Shares redeemed
generally will not be a taxable event to the Shareholder. The Shareholder’s tax basis for the platinum received in the redemption
generally will be the same as the Shareholder’s tax basis for the portion of its pro rata share of the platinum held in the Trust
immediately prior to the redemption that is attributable to the Shares redeemed. The Shareholder’s holding period with respect
to the platinum received should include the period during which the Shareholder held the Shares redeemed. A subsequent sale of the platinum
received by the Shareholder will be a taxable event, unless a nonrecognition provision of the Code applies to such sale.
After
any sale or redemption of less than all of a Shareholder’s Shares, the Shareholder’s tax basis for its pro rata share of
the platinum held in the Trust immediately after such sale or redemption generally will be equal to its tax basis for its share of the
total amount of the platinum held in the Trust immediately prior to the sale or redemption, less the portion of such basis which is taken
into account in determining the amount of gain or loss recognized by the Shareholder upon such sale or, in the case of a redemption,
that is treated as the basis of the platinum received by the Shareholder in the redemption.
Maximum
28% Long-Term Capital Gains Tax Rate for U.S. Shareholders Who Are Individuals
Under
current law, gains recognized by individuals from the sale of “collectibles,” including platinum, held for more than one
year are taxed at a maximum rate of 28%, rather than the current maximum 20% rate applicable to most other long-term capital gains. For
these purposes, gain recognized by an individual upon the sale of an interest in a trust that holds collectibles is treated as gain recognized
on the sale of collectibles, to the extent that the gain is attributable to unrealized appreciation in value of the collectibles held
by the trust. Therefore, any gain recognized by an individual U.S. Shareholder attributable to a sale of Shares held for more than one
year, or attributable to the Trust’s sale of any platinum which the Shareholder is treated (through its ownership of Shares) as
having held for more than one year, generally will be taxed at a maximum federal income tax rate of 28%. The federal income tax rates
for capital gains recognized upon the sale of assets held by an individual U.S. Shareholder for one year or less are generally the same
as those at which ordinary income is taxed. A U.S. corporation’s capital gain is generally taxed at the same federal income tax
rates applicable to the corporation’s ordinary income.
3.8%
Tax on Net Investment Income
Certain
U.S. Shareholders who are individuals are required to pay a 3.8% tax on the lesser of the excess of their modified adjusted gross income
over a threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers) or their “net investment
income,” which generally includes capital gains from the disposition of property. This tax is in addition to any capital gains
taxes due on such investment income. A similar tax applies to estates and trusts. U.S. Shareholders should consult their own tax advisers
regarding the effect, if any, this law may have on their investment in the Shares.
Brokerage
Fees and Trust Expenses
Any
brokerage or other transaction fee incurred by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s
tax basis in the underlying assets of the Trust. Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce
the amount realized by the Shareholder with respect to the sale.
Shareholders
will be required to recognize the full amount of gain or loss upon a sale of platinum by the Trust (as discussed above), even though
some or all of the proceeds of such sale are used by the Trustee to pay Trust expenses. Shareholders may deduct their respective pro
rata shares of each expense incurred by the Trust to the same extent as if they directly incurred the expense. Shareholders who are individuals,
estates or trusts, or certain closely held corporations, however, may be subject to various limitations on their ability to use their
allocable share of the Trust’s deductions and losses. For example, miscellaneous itemized deductions, including expenses for the
production of income, are not currently deductible for taxable years beginning before January 1, 2026. Prospective Shareholders should
consult their own tax advisers regarding the United States federal income tax consequences of holding Shares in light of their particular
circumstance.
Investment
by U.S. Tax-Exempt Shareholders
Certain
U.S. Shareholders (“U.S. Tax-Exempt Shareholders”) are subject to United States federal income tax only on their “unrelated
business taxable income” (“UBTI”). Unless they incur debt in order to purchase Shares, it is expected that U.S. Tax-Exempt
Shareholders should not realize UBTI in respect of income or gains from the Shares. U.S. Tax-Exempt Shareholders should consult their
own independent tax advisers regarding the United States federal income tax consequences of holding Shares in light of their particular
circumstances.
Investment
by Regulated Investment Companies
Mutual
funds and other investment vehicles which are “regulated investment companies” within the meaning of Code Section 851 should
consult with their tax advisers concerning (i) the likelihood that an investment in Shares, although they are a “security”
within the meaning of the Investment Company Act, may be considered an investment in the underlying platinum for purposes of Code Section
851(b), and (ii) the extent to which an investment in Shares might nevertheless be consistent with preservation of their qualification
under Code Section 851.
Investment
by Certain Retirement Plans
Section
408(m) of the Code provides that the purchase of a “collectible” as an investment for an IRA, or for a participant-directed
account maintained under any plan that is tax-qualified under Section 401(a) of the Code (“Tax Qualified Account”), is treated
as a taxable distribution from the account to the owner of the IRA, or to the participant for whom the Tax Qualified Account is maintained,
of an amount equal to the cost to the account of acquiring the collectible. The IRS has issued private letter rulings which provide that
the purchase of shares of trusts similar to the Trust by an IRA or a Tax Qualified Account will not constitute the acquisition of a collectible
or be treated as resulting in a taxable distribution to the IRA owner or Tax Qualified Account participant under Code Section 408(m).
However, if any of the Shares so purchased are distributed from an IRA or Tax Qualified Account to the IRA owner or plan participant,
or if any platinum received by such IRA or Tax Qualified Account upon the redemption of any of the Shares purchased by it is distributed
(or treated as distributed pursuant to Code Section 408(m)) to the IRA owner or plan participant, the Shares or platinum so distributed
will be subject to federal income tax in the year of distribution, to the extent provided under the applicable provisions of Code Sections
408(d), 408(m) or 402. Private letter rulings are only binding on the IRS with respect to the taxpayer to which they were issued, and
the Trust has neither requested nor obtained such a private letter ruling. Accordingly, potential IRA or Tax Qualified Account investors
are urged to consult with their own professional advisors concerning the treatment of an investment in Shares under Code Section 408(m).
Taxation
of Non-U.S. Shareholders
A
Non-U.S. Shareholder generally will not be subject to United States federal income tax with respect to gain recognized upon the sale
or other disposition of Shares, or upon the sale of platinum by the Trust, unless (1) the Non-U.S. Shareholder is an individual and is
present in the United States for 183 days or more during the taxable year of the sale or other disposition, and the gain is treated as
being from United States sources; or (2) the gain is effectively connected with the conduct by the Non-U.S. Shareholder of a trade or
business in the United States and certain other conditions are met.
United
States Information Reporting and Backup Withholding
The
Trustee will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection
with the Trust. To the extent required by applicable regulations, each Shareholder will be provided with information regarding its allocable
portion of the Trust’s annual income (if any) and expenses. A U.S. Shareholder may be subject to United States backup withholding
tax, at a rate of 24%, in certain circumstances unless it provides its taxpayer identification number and complies with certain certification
procedures. Non-U.S. Shareholders may have to comply with certification procedures to establish that they are not a United States person,
and some Non-U.S. Shareholders will be required to meet certain information reporting or certification requirements imposed by the Foreign
Account Tax Compliance Act, in order to avoid certain information reporting and withholding tax requirements.
The
amount of any backup withholding will be allowed as a credit against a Shareholder’s United States federal income tax liability
and may entitle such a Shareholder to a refund, provided that the required information is furnished to the IRS in a timely manner.
Taxation
in Jurisdictions Other Than the United States
Prospective
purchasers of Shares that are based in or acting out of a jurisdiction other than the United States are advised to consult their own
tax advisers as to the tax consequences, under the laws of such jurisdiction (or any other jurisdiction other than the United States
to which they are subject), of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as
to whether any value added tax, other consumption tax or transfer tax is payable in relation to such purchase, holding, sale, redemption
or other dealing.
ERISA
and Related Considerations
ERISA
and/or Code Section 4975 impose certain requirements on certain employee benefit plans and certain other plans and arrangements, including
individual retirement accounts and annuities, Keogh plans, and certain commingled investment vehicles or insurance company general or
separate accounts in which such plans or arrangements are invested (collectively, “Plans”), and on persons who are fiduciaries
with respect to the investment of “plan assets” of a Plan. Government plans and some church plans are not subject to the
fiduciary responsibility provisions of ERISA or the provisions of Section 4975 of the Code, but may be subject to substantially similar
rules under other federal law, or under state or local law (“Other Law”).
In
contemplating an investment of a portion of Plan assets in Shares, the Plan fiduciary responsible for making such investment should carefully
consider, taking into account the facts and circumstances of the Plan and the “Risk Factors” discussed above and whether
such investment is consistent with its fiduciary responsibilities under ERISA or Other Law, including, but not limited to: (1) whether
the investment is permitted under the Plan’s governing documents, (2) whether the fiduciary has the authority to make the investment,
(3) whether the investment is consistent with the Plan’s investment and funding objectives, (4) the tax effects of the investment
on the Plan (see, for example, “Investment by Retirement Plans” under “United States Federal Income Tax Consequences”
above), and (5) whether the investment satisfies the exclusive purpose, prudence, and diversification requirements under ERISA or Other
Law considering all relevant factors, including those discussed in this prospectus. In addition, ERISA and Code Section 4975 prohibit
a broad range of transactions involving assets of a plan and persons who are fiduciaries or “parties in interest” under ERISA
or “disqualified persons” under Section 4975 of the Code. A violation of these rules may result in the imposition of significant
excise taxes under Section 4975 of the Code and other liabilities under ERISA. Plans subject to Other Law may be subject to similar restrictions.
It
is anticipated that the Shares will constitute “publicly offered securities” as defined in the Department of Labor “Plan
Asset Regulations,” §2510.3-101 (b)(2) as modified by Section 3(42) of ERISA. Accordingly, pursuant to the Plan Asset Regulations,
only Shares purchased by a Plan, and not an interest in the underlying assets held in the Trust, should be treated as assets of the Plan,
for purposes of applying the “fiduciary responsibility” rules of ERISA and the “prohibited transaction” rules
of ERISA and the Code. Fiduciaries of plans subject to Other Law should consult legal counsel to determine whether there would be a similar
result under the Other Law.
This
registration statement on Form S-1 and Preliminary Prospectus, as well as any Prospectus, relating to the Trust do not constitute an
undertaking to provide either individualized investment advice or impartial investment advice by the Sponsor, and it is our intention
to not act in a fiduciary capacity with respect to any Plan.
Allowing
an investment in the Trust is not to be construed as a representation by the Sponsor or any of its affiliates, agents or employees that
this investment meets some or all of the relevant legal requirements with respect to investments by any particular Plan or that this
investment is appropriate for any such particular Plan. The person with investment discretion should consult with the Plan’s attorney
and financial advisors as to the propriety of an investment in the Trust in light of the circumstances of the particular Plan, current
tax law and ERISA.
Plan
of Distribution
The
Trust issues Shares in Baskets to Authorized Participants in exchange for deposits of platinum on a continuous basis. Because new Shares
can be created and issued on an ongoing basis, at any point during the life of the Trust, “purchases,” as such term is used
in the Securities Act, will be occurring. Broker-dealers and other persons are cautioned that some of their activities will result in
their being deemed participants in a distribution in a manner which would render them statutory underwriters and subject them to the
prospectus-delivery and liability provisions of the Securities Act. For example, a broker-dealer firm or its client will be deemed a
statutory underwriter if it purchases a Basket from the Trust, breaks the Basket down into the constituent Shares and sells the Shares
directly to its customers; or if it chooses to couple the creation of a supply of new Shares with an active selling effort involving
solicitation of secondary market demand for the Shares. A determination of whether a particular market participant is an underwriter
must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular
case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to designation
as an underwriter.
Investors
that purchase Shares through a commission/fee-based brokerage account may pay commissions/fees charged by the brokerage account. We recommend
that investors review the terms of their brokerage accounts for details on applicable charges.
Dealers
that are not “underwriters” but are participating in a distribution (as contrasted to ordinary secondary trading transactions),
and thus dealing with Shares that are part of an “unsold allotment” within the meaning of Section 4(a)(3)(C) of the Securities
Act, would be unable to take advantage of the prospectus-delivery exemption provided by Section 4(a)(3) of the Securities Act.
The
Sponsor intends to qualify the Shares in states selected by the Sponsor and that sales be made through broker-dealers who are members
of FINRA. Investors intending to create or redeem Baskets through Authorized Participants in transactions not involving a broker-dealer
registered in such investor’s state of domicile or residence should consult their legal advisor regarding applicable broker-dealer
or securities regulatory requirements under the state securities laws prior to such creation or redemption.
Authorized
Participants will offer Shares at an offering price that will vary, depending on, among other factors, the price of platinum and the
trading price of the Shares on the Exchange at the time of offer. Authorized Participants will not receive from the Trust, the Sponsor,
the Trustee or any of their affiliates a fee or other compensation in connection with the sale of the Shares, although Authorized Participants
may receive commissions/fees from investors who purchase Shares.
The
Trust will not bear any expenses in connection with the offering or sales of the Shares.
The
offering of Baskets is being made in compliance with Conduct Rule 2310 of FINRA. Accordingly, the Authorized Participants will not make
any sales to any account over which it has discretionary authority without the prior written approval of a purchaser of Shares. Authorized
Participants will not receive from the Trust or the Sponsor any compensation in connection with an offering of the Shares. Accordingly,
there is, and will be, no payment of underwriting compensation in connection with any such offering of Shares in excess of 10% of the
gross proceeds of the offering.
Authorized
Participants may act for their own accounts as well as for the accounts of other market participants. This may include market participants
such as producers and refiners of platinum that are active in the platinum market. The Sponsor believes that the size and operation of
the platinum market make it unlikely that an Authorized Participant’s creations or redemptions of Baskets for the account of such
market participants will impact the price of platinum or the price of the Shares.
Pursuant
to a Marketing Services Agreement and Securities Activities and Services Agreement, ALPS Fund Services, Inc. (“ALPS”) provides
the following services to Sponsor:
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Reviewing
proposed advertising materials and sales literature for compliance with applicable laws and regulations; filing with appropriate
regulators those advertising materials and sales literature as required; furnishing to the Sponsor any comments provided by regulators
with respect to such materials and using its best efforts to obtain regulators’ approval of such advertising materials and
sales literature; |
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Preparing
and providing compliance policies and procedures for complying with applicable laws, rules and regulations under the Securities Act
and the rules and regulations of any applicable self-regulatory organizations, including FINRA; |
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Consulting
with the Trust’s legal counsel when requested in connection with the services provided pursuant to the Marketing Services Agreement; |
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Registering
and overseeing supervisory activities of the Sponsor’s FINRA-licensed personnel; and |
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Preparing
and maintaining books and records related to the services provided. |
The
Shares will trade on the Exchange under the symbol “PLTM”.
Legal
Matters
Validity
of the Shares
The
validity of the Shares has been passed upon for the Sponsor by Carlton Fields, which, as special United States federal income tax counsel
to the Sponsor, has also rendered an opinion regarding the material United States federal income tax consequences relating to the Shares.
License
Agreement
On
November 3, 2017, The Bank of New York Mellon granted to the Sponsor of the Trust (the “Licensee”) a perpetual, worldwide,
non-exclusive, non-transferable license under The Bank of New York Mellon’s patents and patent applications that cover securitized
platinum products solely for the purpose of establishing, operating and marketing any securitized platinum financial product that is
sold, sponsored or issued by the Licensee.
EXPERTS
The
financial statements of the Trust as of and for the fiscal year ended June 30, 2023, have been incorporated by reference herein in reliance
upon the report of Tait, Weller & Baker LLP, independent registered public accounting firm, and upon the authority of said firm as
experts in accounting and auditing.
Incorporation
of Certain Information by Reference
The
Trust is a reporting company and files annual, quarterly and current reports and other information with the SEC. The rules of the SEC
allow the Trust to “incorporate by reference” information that the Trust files with them, which means that the Trust can
disclose important information to you by referring you to those documents. The information incorporated by reference is an important
part of this prospectus. This prospectus incorporates by reference the documents set forth below that have been previously filed with
the SEC and any future filings that the Trust makes with the SEC under Section 13(a), 13(c), 14 and 15(d) of the Exchange Act (in each
case other than those documents or portions of those documents not deemed to have been filed in accordance with the SEC rules) between
the date of this prospectus and the termination of the offering of the securities to be issued under the registration statement:
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Our
Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC on August 14, 2023. |
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Our
Quarterly Reports on Form 10-Q for the quarters ended September 30, 2023 filed with the SEC on November 3, 2023. |
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The
description of our Shares set forth in the Registration Statement on Form 8-A, filed with the SEC on January 18, 2018. |
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The
Trust’s Current Reports on Form 8-K, filed on December 14, 2020, December 21, 2020, December 29, 2020 and December 31, 2020. |
We
also incorporate by reference any filings we make with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the effective date of the registration statement on Form S-1 of which this prospectus is part and prior to the termination of any offering
covered by this prospectus and any applicable prospectus supplement. Any statement contained in a document incorporated by reference
in this prospectus shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained
in this prospectus or in any other subsequently filed document that also is or is deemed to be incorporated by reference in this prospectus
modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
We
will provide you without charge, upon your written or oral request, a copy of any of the documents incorporated by reference in this
prospectus, other than exhibits to such documents which are not specifically incorporated by reference into such documents, and other
than information in future filings that is deemed not to be filed. Please direct your written or telephone requests to GraniteShares
LLC, 222 Broadway, 21st Floor, New York, NY 10038 (Tel: 844-476-8747). You may also obtain information about us by visiting
our website at www.graniteshares.com. Information contained on our website is not part of this prospectus.
The
Trust’s Internet website is www.graniteshares.com. The Trust makes its electronic filings with the SEC, including its annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports available on its website free
of charge as soon as practicable after the Trust files or furnishes them with the SEC. The information contained on the Trust’s
website is not incorporated by reference in this prospectus and should not be considered a part of this prospectus.
Where
You Can Find More Information
The
Sponsor has filed on behalf of the Trust a registration statement on Form S-1 with the SEC under the Securities Act. This prospectus
does not contain all of the information set forth in the registration statement (including the exhibits to the registration statement),
parts of which have been omitted in accordance with the rules and regulations of the SEC. For further information about the Trust or
the Shares, please refer to the registration statement, which is available to the public on the SEC’s website at www.sec.gov. Information
about the Trust and the Shares can also be obtained from the Trust’s website. The internet address of the Trust’s website
is www.graniteshares.com. This internet address is only provided here as a convenience to you to allow you to access the Trust’s
website, and the information contained on or connected to the Trust’s website is not part of this prospectus or the registration
statement of which this prospectus is part.
The
Trust is subject to the informational requirements of the Exchange Act and the Sponsor, on behalf of the Trust, will file quarterly and
annual reports and other information with the SEC. The reports and other information are available to the public on the SEC’s website
at www.sec.gov.
Glossary
In
this prospectus, each of the following terms has the meaning set forth below:
“ALPS”
- ALPS Fund Services, Inc., a corporation incorporated in the State of Colorado
“Authorized
Participant” – A person who, at the time of submitting to the Trustee an order to create or redeem one or more Baskets (i)
is a registered broker-dealer or other securities market participant, (ii) is a DTC Participant, (iii) has in effect a valid Authorized
Participant Agreement, and (iv) has established a platinum unallocated account with the Custodian or another LPPM-approved platinum-clearing
bank.
“Authorized
Participant Agreement” —An agreement entered into by an Authorized Participant, the Sponsor and the Trustee that provides
the procedures for the creation and redemption of Baskets.
“Basket”
— A block of 50,000 Shares (as such number may be increased or decreased pursuant to the Trust Agreement).
“Basket
Amount”— The amount of platinum (measured in Ounces), determined on each Business Day by the Trustee, which Authorized Participants
must transfer to the Trust in exchange for a Basket, or will receive in exchange for each Basket surrendered for redemption.
“Book
Entry System” —The Federal Reserve Treasury Book Entry System for United States and federal agency securities.
“Business
Day” — Any day other than: (i) a day on which the Exchange is closed for regular trading; or (ii) if the order or other transaction
requires the receipt or delivery, or the confirmation of receipt or delivery, of platinum in the United Kingdom or some other jurisdiction
on a particular day, (A) when the banks are authorized to close in the United Kingdom or in such other jurisdiction or when the London
platinum market is closed, or (B) when banks in the United Kingdom or in such other jurisdiction are, or the London platinum market is,
not open for a full business day and the order or other transaction requires the execution or completion of procedures which cannot be
executed or completed by the close of the business day.
“CFTC”
— Commodity Futures Trading Commission, an independent agency with the mandate to regulate commodity futures, options, swaps and
derivatives markets in the United States, or any successor governmental agency in the United States.
“Clearing
Agency”— Any clearing agency or similar system other than the Book Entry System or DTC.
“Code”
— The Internal Revenue Code of 1986, as amended.
“Commodity
Exchange Act” — The Commodity Exchange Act of 1936, as amended.
“Custodian”
— The initial Custodian designated by the Trust Agreement, which is ICBC Standard Bank Plc, a public limited company incorporated
under the laws of England and Wales, and any substitute or additional custodian appointed by the Trustee at the direction of or as approved
by the Sponsor pursuant to the Trust Agreement.
“Custody
Agreements”— Collectively, the Trust Unallocated Account Agreement and the Trust Allocated Agreement, which are governed
by English law, between the Trustee and the Custodian regarding the custody of the Trust’s platinum.
“DTC”
— The Depository Trust Company, a limited purpose trust company organized under the New York Banking Law, a “banking organization”
within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a “clearing corporation”
within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions
of Section 17A of the Exchange Act.
“DTC
Participant” — An entity that has an account with DTC.
“ERISA”—
The Employee Retirement Income Security Act of 1974, as amended.
“Exchange”
— NYSE Arca.
“Exchange
Act” — The Securities Exchange Act of 1934, as amended.
“FINRA”—
Financial Industry Regulatory Authority, Inc.
“Good
Delivery Platinum Plate or Ingot” — Platinum in plate or ingot form with a minimum fineness and purity of 99.95% weighing
between 32.151 and 192.904 troy ounces. One troy ounce equals 31.103 grams meeting the Good Delivery Standards.
“Indirect
Participant” — An entity that has access to the DTC clearing system by clearing securities through, or maintaining a custodial
relationship with, a DTC Participant.
“IRA”
— Individual retirement account.
“IRS”
— Internal Revenue Service.
“LBMA”—
The London Bullion Market Association, a trade association that acts as the coordinator for activities conducted on behalf of its members
and other participants in the London bullion market.
“LBMA
Platinum Price AM” — As of any day, the price of platinum determined in an auction hosted by the LME in the morning of such
day (London time).
“LBMA
Platinum Price PM” — As of any day, the price of platinum determined in an auction hosted by the LME in the afternoon of
such day (London time).
“LME”
— The London Metal Exchange. The LME administers and supervises the determination of the LBMA Platinum Prices.
“LPPM”
— The London Platinum and Palladium Market. The LPPM is the trade association that acts as the coordinator for activities conducted
on behalf of its members and other participants in the London platinum market.
“NAV”
— Net asset value per Share. See “The Trust — Valuation of Platinum; Computation of Net Asset Value” for a description
of how the net asset value of the Trust and the NAV are calculated.
“NFA”
— The National Futures Association, a futures association and a self-regulatory organization organized under the Commodity Exchange
Act and CFTC regulations with the mandate to regulate intermediaries trading in “commodity interests”.
“Non-U.S.
Shareholder” — A Shareholder that is not a U.S. Shareholder.
“NYMEX”
— The exchange market on which platinum futures contracts trade. NYMEX is a subsidiary of the Chicago Mercantile Exchange Group
(the “CME Group”).
“OTC”
— The global Over-the-Counter market for the trading of platinum which consists of transactions in spot, forwards, and options
and other derivatives.
“Ounce”—
A troy ounce, equal to 31.103 grams or 1.0971428 ounces avoirdupois. “Avoirdupois” is the system of weights used in the U.S.
and Great Britain for goods other than precious metals, gems and drugs. In that system, a pound has 16 ounces and an ounce has 16 drams.
“Plan”—
Any (a) employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the fiduciary responsibility provisions of ERISA,
as set forth in Title I thereof, (b) plan described in Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, including
individual retirement accounts and Keogh plans, (c) entity whose underlying assets include plan assets by reason of a plan’s investment
in such entity.
“SEC”
— The Securities and Exchange Commission of the United States, or any successor governmental agency in the United States.
“Securities
Act” — The Securities Act of 1933, as amended.
“Shareholders”—
Owners of beneficial interests in the Shares.
“Shares”
— Units of fractional undivided beneficial interest in the net assets of the Trust that are issued by the Trust.
“Sponsor”—
GraniteShares LLC, a Delaware limited liability company.
“TOCOM”
— The Tokyo Commodity Exchange.
“Tonne”
— One metric ton which is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
“Trust”
— GraniteShares Platinum Trust, a New York trust formed pursuant to the Trust Agreement.
“Trust
Agreement”— The Trust Agreement dated January 11, 2018, among the Sponsor, The Bank of New York Mellon, the registered and
beneficial owners from time to time of Shares and all persons that deposit platinum for creation of Shares under which the Trust is governed.
“Trust
Allocated Account” – The loco London account maintained for the Trust by the Custodian pursuant to the Trust Allocated Account
Agreement.
“Trust
Allocated Account Agreement” – The Allocated Platinum Account Agreement dated as of January 11, 2018 between the Custodian
and the Trustee.
“Trust
Unallocated Account” – The loco London account maintained for the Trust by the Custodian pursuant to the Trust Unallocated
Account Agreement.
“Trust
Unallocated Account Agreement” – The Unallocated Platinum Account Agreement dated as of January 11, 2018 between the Custodian
and the Trustee.
“Trustee”
— The Bank of New York Mellon, a banking corporation organized under the laws of the State of New York with trust powers.
“U.S.
Shareholder” —A Shareholder that is (1) an individual who is treated as a citizen or resident of the United States for United
States federal income tax purposes; (2) a corporation (or an entity treated as a corporation for United States federal income tax purposes)
created or organized in or under the laws of the United States, any state thereof or the District of Columbia; (3) an estate, the income
of which is includible in gross income for United States federal income tax purposes regardless of its source; or (4) a trust, if a court
within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons
have the authority to control all substantial decisions of the trust, or a trust that has made a valid election under applicable Treasury
Regulations to be treated as a domestic trust.
GraniteShares
Platinum Trust
PROSPECTUS
January
23, 2024
Grafico Azioni GraniteShares Platinum (AMEX:PLTM)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni GraniteShares Platinum (AMEX:PLTM)
Storico
Da Feb 2024 a Feb 2025
