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and regulations. Each Authorized Participant has its own set of rules and procedures, internal controls and information barriers |
as it determines is appropriate in light of its own regulatory regime. Authorized |
Participants may act for their own accounts or as agents for broker-dealers, custodians and other securities market participants |
that wish to create or redeem Baskets. An order for one or more Baskets may be placed by an Authorized Participant on behalf of |
multiple clients. As of the date of this report, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, HSBC Securities |
(USA) Inc., J.P. Morgan Securities LLC, Merrill Lynch Professional Clearing Corp., Mizuho Securities USA LLC, Morgan Stanley |
& Co. LLC, Scotia Capital (USA) Inc., UBS Securities LLC and Virtu Americas, LLC have each signed an Authorized |
Participant Agreement with the Trust and, upon the effectiveness of such agreement, may create and redeem Baskets as described |
above. Persons interested in purchasing Baskets should contact the Sponsor or the Trustee to obtain the contact information for |
the Authorized Participants. Shareholders who are not Authorized Participants are only able to redeem their Shares through an |
Authorized Participant. All gold will |
be delivered to the Trust and distributed by the Trust in unallocated form through credits and debits between Authorized |
Participant Unallocated Accounts and the Trust Unallocated Account. Gold transferred from an Authorized Participant Unallocated |
Account to the Trust in unallocated form will first be credited to the Trust Unallocated Account. Thereafter, the Custodian will |
allocate, or cause the allocation by the Zurich Sub-Custodian, of specific bars of gold representing the amount of gold credited |
to the Trust Unallocated Account (to the extent such amount is representable by whole gold bars) to the Trust Allocated Account. |
The movement of gold is reversed for the distribution of gold to an Authorized Participant in connection with the redemption of |
Baskets. All |
physical gold represented by a credit to any Authorized Participant Unallocated Account and to the Trust Unallocated Account and |
all physical gold held in the Trust Allocated Account with the Custodian must be of at least a minimum fineness (or purity) of |
995 parts per 1,000 (99.5%) and otherwise conform to the rules, regulations practices and customs of the LBMA, including the specifications |
for a London Good Delivery Bar. Under |
the Authorized Participant Agreement, the Sponsor has agreed to indemnify the Authorized Participants against certain liabilities, |
including liabilities under the Securities Act. Loco |
London and Loco Zurich Gold Delivery Elections Authorized |
Participants can elect to deliver gold loco London or loco Zurich in connection with the creation of a Basket. Authorized Participants |
can also elect to receive delivery of gold loco London or loco Zurich in connection with the redemption of a Basket. A Basket |
creation order that elects a loco London or loco Zurich delivery of gold will cause the Custodian to effect an allocation of such |
gold to the Trust Allocated Account maintained by the Custodian in its London or Zurich vault premises or by the Zurich Sub-Custodian |
in its Zurich vault premises. Likewise, a Basket redemption order that elects a loco London or loco Zurich delivery of gold will |
cause the Custodian to effect a de-allocation of gold necessary to satisfy such redemption requests from the Trust Allocated Account |
maintained by the Custodian or by the Zurich Sub-Custodian to the Trust Unallocated Account. In the event that there is not sufficient |
gold in the Trust Allocated Account in London to satisfy loco London redemptions, the Custodian shall de-allocate, or shall cause |
the Zurich Sub-Custodian to de-allocate, sufficient gold held in the Trust Allocated Account in Zurich and cause a transfer of |
gold from the Trust Unallocated Account maintained by the Custodian in Zurich to the Authorized Participant Unallocated Account |
maintained in London. Likewise, in the event that there is not sufficient gold in the Trust Allocated Account in Zurich to satisfy |
loco Zurich redemptions, the Custodian will initiate the reverse procedure to transfer gold from London to Zurich. These transfers |
between London and Zurich unallocated accounts will generally occur pursuant to loco swap arrangements and will not expose the |
Authorized Participant or the Trust to any additional expense. The Custodian has assumed the responsibility and expenses for loco |
swap transfers and shall bear any risk of loss related to the gold being transferred. If no loco swap counter-party is available, |
the Custodian shall arrange, at its own expense and risk, for the physical transportation of gold between the Custodian’s |
Zurich vault premises and the Custodian’s London vault premises. If such a loco swap or physical transfer is necessary to |
effect a loco London or loco Zurich redemption, the settlement of loco London or loco Zurich redemption deliveries may be delayed |
more than two, but not more than five, business days. 12 The |
following description of the procedures for the creation and redemption of Baskets is only a summary and an investor should refer |
to the relevant provisions of the Trust Agreement and the form of Authorized Participant Agreement for more detail. Creation |
Procedures On |
any business day, an Authorized Participant may place an order with the Trustee to create one or more Baskets. Creation and |
redemption orders are accepted on “business days” the NYSE Arca is open for regular trading. Settlements of such orders |
requiring receipt or delivery, or confirmation of receipt or delivery, of gold in the United Kingdom, Zurich or another jurisdiction |
will occur on “business days” when (1) banks in the United Kingdom, Zurich and such other jurisdiction and (2) the |
London and Zurich gold markets are regularly open for business. If such banks or the London or Zurich gold markets are not open for |
regular business for a full day, such a day will only be a “business day” for settlement purposes if the settlement |
procedures can be completed by the end of such day. Settlement of orders requiring receipt or delivery, or confirmation of receipt |
or delivery, of Shares will occur, after confirmation of the applicable gold delivery, on “business days” when the NYSE |
Arca is open for regular trading. Purchase orders must be placed no later than 3:59:59 p.m. on each business day the NYSE Arca is |
open for regular trading. In the event of a level 3 market-wide circuit breaker resulting in a trading halt for the remainder of the |
trading day, the time of the market-wide trading halt is considered the close of regular trading and no creation orders for the |
current trade date will be accepted after that time (the “cutoff”). Orders placed after the cutoff will be deemed to be |
rejected and will not be processed. Orders should be placed in proper form on the following business day. Purchase orders must be |
placed no later than 3:59:59 p.m. on each business day the NYSE Arca is open for regular trading. By |
placing a purchase order, an Authorized Participant agrees to deposit gold with the Trust. Prior to the delivery of Baskets for |
a purchase order, the Authorized Participant must also have wired to the Trustee the non-refundable transaction fee due for the |
purchase order. Determination |
of required deposits The |
amount of gold in the required deposit is determined by dividing the number of ounces of gold held by the Trust by the number |
of Baskets outstanding, as adjusted for the amount of gold constituting estimated accrued but unpaid fees and expenses of the |
Trust. Fractions of a fine ounce of gold smaller than 0.001 of a fine ounce which are included in the deposit amount are disregarded |
in the foregoing calculation. All questions as to the composition of a Creation Basket Deposit will be finally determined by the |
Trustee. The Trustee’s determination of the Creation Basket Deposit shall be final and binding on all persons interested |
in the Trust. Delivery |
of required deposits An |
Authorized Participant who places a purchase order is responsible for crediting its Authorized Participant Unallocated Account |
with the required gold deposit amount by the second business day in London or Zurich, as applicable, following the purchase order |
date. Upon receipt of the gold deposit amount, the Custodian, after receiving appropriate instructions from the Authorized Participant |
and the Trustee, will transfer on the second business day following the purchase order date the gold deposit amount from the Authorized |
Participant Unallocated Account to the Trust Unallocated Account and the Trustee will direct DTC to credit the number of Baskets |
ordered to the Authorized Participant’s DTC account. The expense and risk of delivery, ownership and safekeeping of gold |
until such gold has been received by the Trust shall be borne solely by the Authorized Participant. The Trustee may accept delivery |
of gold by such other means as the Sponsor, from time to time, may determine with the Trustee to be acceptable for the Trust, |
provided that the same is disclosed in a prospectus relating to the Trust filed with the SEC pursuant to Rule 424 under the Securities |
Act. If gold is to be delivered other than as described above, the Sponsor is authorized to establish such procedures and to appoint |
such custodians and establish such custody accounts in addition to those described in this report, as the Sponsor determines to |
be desirable. 13 Acting |
on standing instructions given by the Trustee, the Custodian will transfer the gold deposit amount from the Trust Unallocated |
Account to the Trust Allocated Account by transferring gold bars from its inventory, or the inventory of the Zurich Sub-Custodian, |
to the Trust Allocated Account. The Custodian uses commercially reasonable efforts to complete the transfer of gold to the Trust |
Allocated Account prior to the time by which the Trustee is to credit the Basket to the Authorized Participant’s DTC account; |
if, however, such transfers have not been completed by such time, the number of Baskets ordered will be delivered against receipt |
of the gold deposit amount in the Trust Unallocated Account, and all Shareholders will be exposed to the risks of unallocated |
gold to the extent of that gold deposit amount until the Custodian completes the allocation process or a Zurich Sub-Custodian |
completes the allocation process for the Custodian. See “Risk Factors—gold held in the Trust’s unallocated gold |
account and any Authorized Participant’s unallocated gold account will not be segregated from the Custodian’s assets....” Because |
gold is allocated only in multiples of whole bars, the amount of gold allocated from the Trust Unallocated Account to the Trust |
Allocated Account may be less than the total fine ounces of gold credited to the Trust Unallocated Account. Any balance will be |
held in the Trust Unallocated Account. The Custodian uses commercially reasonable efforts to minimize the amount of gold held |
in the Trust Unallocated Account; no more than 430 fine troy ounces of gold (maximum weight to make one London Good Delivery Bar) |
is expected to be held in the Trust Unallocated Account at the close of each business day. Rejection |
of purchase orders The |
Trustee may reject a purchase order or a Creation Basket Deposit if such order or Creation Basket Deposit is not presented in |
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