The CurrencyShares® British Pound Sterling Trust (the “Trust”)
is a grantor trust that was formed on June 8, 2006. The shares began trading
on the New York Stock Exchange under the ticker symbol “FXB” on
June 26, 2006. The primary listing of the Shares was transferred to NYSE Arca,
Inc. (“NYSE Arca”) on October 30, 2007. The Trust issues shares
(the “Shares”) in blocks of 50,000 (a “Basket”) in exchange
for deposits of British Pound Sterling and distributes British Pound Sterling
in connection with the redemption of Baskets.
The investment objective of the Trust is for the Shares to reflect the price
in USD of British Pound Sterling plus accrued interest, if any, less the expenses
of the Trust’s operations. The Shares are intended to offer investors
an opportunity to participate in the market for the British Pound Sterling through
an investment in securities. The Shares are intended to provide institutional
and retail investors with a simple, cost-effective means of gaining investment
benefits similar to those of holding the British Pound Sterling. The Shares
are bought and sold on NYSE Arca like any other exchange-listed security. The
Shares are backed by the assets of the Trust, which does not hold or use derivative
products. The Trust is a passive investment vehicle and does not have any officers,
directors or employees. The Trust does not engage in any activities designed
to obtain profit from, or ameliorate losses caused by, changes in the price
of the British Pound Sterling. Investing in the Shares does not insulate the
investor from certain risks, including price volatility. The value of the holdings
of the Trust is reported on the Trust’s website, www.currencyshares.com,
each business day.
The Trust holds British Pound Sterling and, from time to time, issues Baskets
in exchange for deposits of British Pound Sterling and distributes British Pound
Sterling in connection with redemptions of Baskets. The British Pound Sterling
held by the Trust will be sold only (1) if needed to pay Trust expenses, (2)
in the event the Trust terminates and liquidates its assets or (3) as otherwise
required by law or regulation.
The Trustee calculates, and the Sponsor publishes, the Trust’s Net Asset
Value (“NAV”) each business day. To calculate the NAV, the Trustee
adds to the amount of British Pounds Sterling in the Trust at the end of the
preceding day accrued but unpaid interest, if any, British Pounds Sterling receivable
under pending purchase orders and the value of other Trust assets, and subtracts
the accrued but unpaid Sponsor’s fee, British Pounds Sterling payable
under pending redemption orders and other Trust expenses and liabilities, if
any. The NAV is expressed in U.S. Dollars (“USD”) based on the British
Pound Sterling/USD exchange rate as determined by The WM Company, at 4:00 PM
(London time / London fixing) (the “Closing Spot Rate”) on each
day that NYSE Arca is open for regular trading. If, on a particular evaluation
day, the Closing Spot Rate has not been determined and announced by 6:00 PM
(London time), then the most recent Closing Spot Rate is used to determine the
NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines
that such price is inappropriate to use as the basis for the valuation.
Each Share represents a proportional interest, based on the total number of
Shares outstanding, in the British Pound Sterling owned by the Trust, plus accrued
and unpaid interest, if any, less accrued but unpaid expenses (both asset-based
and non-asset based) of the Trust. 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 Depositary Trust Agreement.
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