Circular

_________________________________________________________________________________

This document is important and requires your immediate attention.  If you are in doubt as to the action you should take you should seek advice from your stockbroker, bank manager, solicitor, tax adviser, accountant or other independent financial adviser.  If you have sold or transferred all of your Shares in PIMCO ETFs plc, please pass this document at once to the stockbroker, bank or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee as soon as possible. The Directors of PIMCO ETFs plc are the persons responsible for the information contained in this document. Unless otherwise defined herein, all terms used in this document have the same meanings as in the Prospectus. This Circular has not been reviewed by the Central Bank.

 

CIRCULAR TO SHAREHOLDERS OF

 

PIMCO Euro Short Maturity UCITS ETF

PIMCO US Dollar Short Maturity UCITS ETF

PIMCO Sterling Short Maturity UCITS ETF

PIMCO Emerging Markets Advantage Local Bond Index UCITS ETF

PIMCO US Short-Term High Yield Corporate Bond Index UCITS ETF

PIMCO Covered Bond UCITS ETF

PIMCO Euro Low Duration Corporate Bond UCITS ETF

PIMCO US Low Duration Corporate Bond UCITS ETF

PIMCO Euro Short-Term High Yield Corporate Bond Index UCITS ETF

 

each sub-funds of

 

 

PIMCO ETFs plc

 (An open-ended umbrella type investment company with variable capital and with segregated liability between Funds incorporated with limited liability in Ireland under the Companies Act 2014 with registered number 489440 and established as an undertaking for collective investment in transferable securities pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, as amended)

Proposal for Conversion to the International Central Securities Depositary Model of Settlement

 

Proposed Scheme of Arrangement

Notice of Scheme Meeting

Notice of Extraordinary General Meeting

 

 

Definitions 

 

"Act"                                                     means the Companies Act 2014 of Ireland (as amended);

 

"Articles"                                              means the Memorandum and Articles of Association of the Company;

 

"Authorised Participant"                       means an entity or person authorised by the Company for the purposes of subscribing for and redeeming Shares of a Fund on a cash or in-kind basis directly with the Company either in order to be able to offer to buy Shares from or sell Shares to their customers as part of their broker/dealer business or in order to act as a market maker. The Company may add or replace an Authorised Participant from time to time;

 

"Board"                                                 means the board of directors of the Company from time to time;

 

"Business Day"                                     means any day on which banks are open for business in Dublin, Ireland or as otherwise specified in the relevant Supplement;

 

"Central Bank"                                      means the Central Bank of Ireland or any successor regulatory authority thereto;

 

"Central Bank

UCITS Regulations 2019"                      means the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2019, as same may be amended, supplemented or re-enacted from time to time; 

 

"Circular"                                              means this document dated 12 August, 2020;

 

"Common Depositary"                          means the entity appointed as a depositary for the International Central Securities Depositaries, currently Citibank Europe p.l.c.;

 

"Common Depositary Nominee"          means the entity appointed as nominee for any Common Depositary and as such acts as the registered legal holder of the Shares, currently Citivic Nominees Limited;

 

"Company"                                           means PIMCO ETFs plc, an umbrella investment company with variable share capital incorporated in Ireland under registration number 489440;

 

"CREST Depositary Interest"                 means an English law security issued by Euroclear UK & Ireland (through a subsidiary company) that represents a CREST member's entitlement in relation to an underlying security; in the context of the ICSD Model, a CREST Depositary Interest will represent an interest in a Share in the relevant Fund that is held via Euroclear Bank S.A./N.V.;

 

"CREST System"                                   means a settlement system owned and operated by Euroclear UK & Ireland and constituting a relevant system for the purposes of the Companies Act, 1990 (Uncertificated Securities) Regulations, 1996 (and any successor thereto);

 

"CSDs" (and each a "CSD")                     means a local central securities depositaries other than the ICSDs (which may include but are not limited to the CREST system, Euroclear Netherlands, Clearstream Banking AG, Frankfurt/Main, SIS SegaIntersettle AG and Monte Titoli);

 

"Current Model"                                    means the existing settlement model of the Funds (except the ICSD Fund), which involves settlement on multiple local CSDs where the Funds are listed and traded on multiple stock exchanges; the central securities depositaries may include (but this list is not limited to) the CREST system, Euroclear Netherlands, Clearstream Banking AG, Frankfurt/Main, SIS SegaIntersettle AG and Monte Titoli;

 

"Directors"                                            means the directors of the Company or any duly authorised committee or delegate thereof;

 

"Effective Date"                                     means the date and time on which the Scheme becomes effective in accordance with its terms;

 

"Excluded Shares"                                means any and all Participating Shares in the ICSD Fund;

 

"Extraordinary General Meeting"         

or "EGM"                                              means the extraordinary general meeting of the Company (and any adjournment thereof) to be convened in connection with the Scheme, expected to be held as soon as the preceding Scheme Meeting shall have been concluded or adjourned;

 

"Forms of Proxy"                                  means the Form of Proxy for the Scheme Meeting and the Form of Proxy for the Extraordinary General Meeting and "Form of Proxy" shall mean either of them;

 

"Funds"                                                means a sub-fund of the Company representing the designation by the Directors of a particular Class or Classes of Shares as a sub-fund, the proceeds of issue of which are pooled and invested in accordance with the investment objective and policies applicable to such sub-fund and which is established by the Directors from time to time with the prior approval of the Central Bank; 

 

"Global Share Certificate"                     means the certificate evidencing entitlement to the Shares of any Fund using the ICSD Model, issued pursuant to the Articles and the prospectus of the Company;

 

"High Court"                                         means the High Court of Ireland;

 

"High Court Hearing"                            means the hearing of the High Court for the purposes of considering and, if thought fit, sanctioning the Scheme;

 

"ICSD Fund"                                         means PIMCO US Low Duration Corporate Bond UCITS ETF;     

 

"International Central Securities

Depositaries" or "ICSD"                         means such Recognised Clearing Systems which avail of the Euroclear International Settlement System and issue their Shares through the International Central Securities Depositary settlement system, which is an international settlement system connected to multiple national markets;

 

"ICSD Model"                                        means the ICSD settlement model proposed to be adopted by the Company and which is described in Part 1 of this Circular;

 

"Irish Standard Time"                           means Irish standard time, as set out in the Standard Time (Amendment) Act 1971 and the Summer Time Act 1925;

 

"Participating Shares" or "Shares"         means participating shares of no par value in the capital of the Company and includes, where the context so permits or requires, the participating shares in a Fund which may be divided into different classes;

 

"Register of Members"                          means the register of members of the Company which register is maintained in respect of all the Funds;

 

"Registrar of Companies"                      means the Registrar of Companies in Ireland;

 

"Restricted Jurisdiction"                       means any jurisdiction in respect of which it would be unlawful for the Circular or the related Forms of Proxy to be released, published or distributed, in whole or in part;

 

"Restricted Overseas Shareholder"       means a Shareholder (including an individual, partnership, unincorporated syndicate, limited liability company, unincorporated organisation, trust, trustee, executor, administrator or other legal representative), in, or resident in, or any Shareholder whom the Company believes to be in, or resident in, a Restricted Jurisdiction;

 

"Scheme"                                              means the proposed scheme of arrangement under Chapter 1 of Part 9 of the Act as set out in Part 2 of this Circular with or subject to any modification(s), addition(s) or condition(s) approved or imposed by the High Court and agreed by the Board;

 

"Scheme Meeting"                                means the meeting of the Scheme Shareholders (and any adjournment thereof) convened by the Directors to consider and vote on a resolution proposing that the Scheme (with or without amendment) be agreed to;

 

"Scheme Order"                                    means the order of the High Court under Section 453(2)(c) of the Act sanctioning the Scheme;

 

"Scheme Shares"                                  means (i) the Participating Shares in issue at the date of this Circular; and (ii) any Participating Shares issued at or after the date of this Circular and before the Effective Date but excluding the Excluded Shares;

 

"Scheme Shareholders"                        means the registered holders of Scheme Shares; 

 

"Shareholders" or "Holders"                  means the registered holders of Participating Shares;

 

"Voting Record Time"                           means 8.00 am (Irish Standard Time) on 6 September, 2020 or, if the Scheme Meeting and/or the Extraordinary General Meeting is/are adjourned, 8.00 am (Irish Standard Time) on the day before the day appointed for the adjourned meeting(s).

 

 

 

                                                            PART I - INTRODUCTION

 

12 August, 2020

 

Dear Shareholder,

 

1.    Introduction and Background

 

We are writing to you in your capacity as a Shareholder to notify you of a proposal to centralise the settlement of trading in Participating Shares of all non-ICSD Funds of the Company in an ICSD structure.  The ICSD Fund already uses the ICSD Model.

At present, the Company operates a securities settlement system whereby settlement occurs via the CREST System for all non-ICSD Funds.

With effect from 30 March 2021, Irish domiciled ETFs (such as the Company) will no longer be able to rely on the CREST System for the settlement of their shares as Euroclear UK and Ireland Limited is a UK regulated central securities depositary which will no longer be able to provide services in Ireland after that date as a result of the United Kingdom's exit from the European Union ("Brexit"). The Company is currently availing of transitional arrangements granted by the European Commission regarding the current use of the CREST System whereby temporary equivalence has been granted to Euroclear UK and Ireland Limited (to expire from 30 March 2021).

Accordingly, in order to mitigate against this Brexit related risk, the Company is required to migrate from the CREST System to an alternative CSD.

The Directors are proposing to adopt the ICSD Model by way of a Scheme under Chapter 1 of Part 9 of the Act. The purpose of this Circular is to provide you with information regarding the Scheme and the proposed ICSD Model.

The key feature of the ICSD Model is that it provides centralised settlement in Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking S.A., Luxembourg ("Clearstream" and, together with Euroclear, the "ICSD") for transactions executed on multiple stock exchanges.

Converting the Non-ICSD Funds to the ICSD Model will bring all Funds in existence on the Effective Date onto one consistent settlement structure, which is expected to make navigating the settlement structures for these Funds more straightforward.

As you will likely be aware, on 28 May 2020, the following meetings took place: 

a)   a meeting convened by the Directors pursuant to the Act to enable shareholders of the Company to consider and, if thought fit, approve a scheme of arrangement under Chapter 1 of Part 9 of the Act on identical terms to those set out in the scheme of arrangement outlined in the circular dated 6 May, 2020 (the "May Scheme") (the "May Meeting"); and 

 

b)   an extraordinary general meeting of shareholders of the Company to approve, inter alia, all such action taken by the Directors as they consider necessary or appropriate for carrying the Scheme into effect (the "May EGM").

 

We have been advised that, due to an administrative oversight, the notice convening the May Meeting was not distributed to all Scheme Shareholders in relation to the May Scheme.

 

In order to ensure compliance of the Scheme with the Act, a new Scheme Meeting has been convened for the purposes of enabling all Scheme Shareholders to consider and, if thought fit, to approve the Scheme. An EGM has been convened for the purposes of passing a resolution authorising all such action taken by the Directors as they consider necessary or appropriate for carrying the Scheme into effect. 

 

We have put in place additional procedures to ensure that this Circular is distributed to all Shareholders as required. 

 

The proposal for this Scheme is on identical terms to those set out in the May Scheme. This Scheme Meeting and EGM are being convened solely because of the administrative oversight as outlined above. 

 

Your votes in respect of the May Scheme Meeting and May EGM are not valid in respect of the proposals to be voted on at this Scheme Meeting and EGM.

 

We encourage you to submit your votes for the Scheme Meeting and EGM in accordance with the instructions set out in the Forms of Proxy at Parts 3 and 4 of this Circular. 

 

2.    The Proposal

 

It is proposed that the Company will adopt the ICSD Model in place of the Current Model for the non-ICSD Funds pursuant to a Scheme. Under the Scheme, it is proposed to transfer the legal (but not beneficial) interest in all Participating Shares in the Non-ICSD Funds as at the Effective Date to the Common Depositary's Nominee, which will hold the legal title in the Participating Shares as nominee for the Common Depositary. While the legal interest in all Participating Shares will transfer to the Common Depositary's Nominee, investors will continue to hold a beneficial interest in the same number of Participating Shares in the same Fund(s) under the ICSD Model as they held immediately prior to the Effective Date under the Current Model and will be able to direct the exercise of their rights in respect of such Participating Shares to the same extent that they can at the moment under the Current Model. 

 

If approved by the requisite majority of Scheme Shareholders and sanctioned by the High Court, it is anticipated that the Scheme will become effective on a date in the fourth quarter of 2020, to be determined by the High Court. The Effective Date of the Scheme will be announced and published as set out in the section titled "Publication of Results" below.

 

Adoption of the ICSD Model will not change the manner in which investments in the Funds are managed.

 

Differences between the ICSD Model and the Current Model

 

Under the Current Model, only investors with accounts in the CREST system operated by Euroclear UK & Ireland Limited and certain CSDs (e.g., Clearstream Banking AG, Frankfurt/Main) or their nominees are registered as Shareholders in the Company's Register of Members. As a result, the Register of Members of the Company consists of a mix of nominees of Authorised Participants and other account holders in the CREST system operated by Euroclear UK & Ireland Limited, as well as CSDs themselves or their nominees.

 

The majority of investors, therefore, who do not have accounts in the CREST system and who are not CSDs, hold their interests in Participating Shares in the Funds through nominees and other intermediaries, which means that most investors are beneficial owners who do not hold legal title to their Participating Shares.

 

Under the ICSD Model (if adopted), all Participating Shares in the Company will be evidenced by a Global Share Certificate and registered in the Company's Register of Members in the name of a single Shareholder, namely Citivic Nominees Limited (being the Common Depositary's Nominee). If the Scheme is implemented, the Common Depositary's Nominee, together with the Common Depositary and the ICSDs, will be subject to contractual obligations to pass beneficial interest and all associated rights of the registered Shareholder in all Shares in each of the Funds to participants (i.e. the underlying investors in the Funds).

 

In particular, the Common Depositary's Nominee will be subject to a contractual obligation to relay any notices of Shareholder meetings of the Company (or any of its Funds) and associated documentation issued by the Company to the Common Depositary, which will further be obliged to pass on such notices and documentation to the ICSDs. The applicable ICSD will in turn relay notices and associated documentation received from the Common Depositary to its participants in accordance with its rules and procedures. Similarly, each ICSD will be contractually bound to collate and transfer all votes received from its participants to the Common Depositary and the Common Depositary will in turn be contractually bound to collate and transfer all votes received from the applicable ICSDs to the Common Depositary's Nominee, which will be contractually obliged to vote in accordance with such instructions.

The Common Depositary's Nominee, the Common Depositary and the ICSDs will also be contractually bound to pass any distributions received from the Company downstream to participants and/or their relevant nominees. In particular, upon instruction of the Common Depositary's Nominee, any redemption proceeds and any dividends declared that are payable by the Company to the Common Depositary's Nominee as Shareholder may be paid by the Company or its authorised agent directly to the applicable ICSD. If the Common Depositary's Nominee receives any redemption proceeds or dividends from the Company or its authorised agent, the Common Depositary's Nominee will arrange for such payments to be passed on to the relevant ICSD. The relevant ICSD will in turn pay any redemption proceeds and dividends received to the relevant participants of the ICSD.

 

Under the ICSD Model, investors who are not participants in the ICSD will need to use a broker, nominee, custodian bank or other intermediary which is a participant in the ICSD to trade and settle Participating Shares, similar to the way investors under the Current Model use a broker or other intermediary which is a participant in the CSD for the market in which the investor intends to trade and settle. The chain of beneficial ownership in the ICSD Model will therefore be similar to existing nominee arrangements under the Current Model.

 

For Scheme Shareholders who are registered on the Company's Register of Members immediately before the Effective Date (e.g. a CSD or its nominee), your ownership of Scheme Shares will change from legal ownership to ownership of a beneficial entitlement through the nominee of the Common Depositary, as explained above, however, you will continue to hold a beneficial interest in the same number of Participating Shares in the same Fund(s) as you hold under the Current Model immediately before the Effective Date. If you wish, you may move your Participating Shares held in the CREST system to the ICSD, i.e. Euroclear or Clearstream, if you hold or open an account with either of them. Alternatively, you may continue holding a beneficial entitlement to the Participating Shares in the CREST system through Euroclear UK & Ireland Limited (by means of CREST Depositary Interests) as Euroclear UK & Ireland Limited currently has an account in the ICSD.

 

Investors who are not currently registered as Shareholders on the Company's Register of Members but have a beneficial entitlement to Participating Shares will continue to hold a beneficial interest in the same number of Participating Shares in the same Fund(s) as they currently hold under the Current Model upon the adoption of the ICSD Model.

 

Under the ICSD Model, Authorised Participants will continue to generate and instruct trades directly with the Company (as is the case under the Current Model).

 

For the Company, the main difference between the Current Model and the ICSD Model relates to the shareholders of record registered on the Register of Members. Under the Current Model, a number of nominees of Authorised Participants and other account holders in the CREST system as well as CSDs or their nominees are registered as Shareholders on the Company's Register of Members. Under the ICSD Model, all investors will be represented through the Common Depositary and the sole registered holder of all Participating Shares in each Fund will be the Common Depositary's Nominee. The Common Depositary has been appointed by the ICSD and its holding will represent the holding of the investors through the ICSD.

 

If the Scheme becomes effective, detailed disclosures regarding settlement under the ICSD Settlement Model, together with a summary of the interaction between the Common Depositary and underlying investors will be set out in the Prospectus of the Company. 

 

Scheme of Arrangement

 

As noted above, in order to adopt the ICSD Model, it is proposed that the Company implement a scheme of arrangement under the Act pursuant to which the legal (but not beneficial) interest in all Participating Shares in the Non-ICSD Funds will be transferred to the Common Depositary's Nominee.

 

In order to become effective, the Scheme must be approved at the Scheme Meeting by the requisite majority of Scheme Shareholders at the Voting Record Time. In addition, Shareholders of the Company at the Voting Record Time will need to approve the implementation of the Scheme. The Scheme must also be sanctioned by the High Court at the High Court Hearing. Both the Scheme Meeting and the EGM as well as the nature of the approvals required to be given at the meetings are described in more detail below. All Scheme Shareholders are entitled to attend the High Court Hearing in person or to be represented by counsel or a solicitor (at their own expense) to support or oppose the sanctioning of the Scheme.

 

The implementation of the Scheme and adoption of the ICSD Model by the Company is subject to a number of conditions (summarised under "The Conditions" below). Subject to satisfaction of these conditions, the Scheme will become effective from the date specified in the Scheme Order which is anticipated to be a date in the fourth quarter of 2020.

 

Should the Scheme become effective, its terms will be binding on all Scheme Shareholders, irrespective of whether they attended the Scheme Meeting and irrespective of the manner in which they voted (or if they voted at all).

 

The Conditions

 

The adoption of the ICSD Model is conditional upon the Scheme becoming effective. The implementation of the Scheme is conditional upon:

 

§ the approval of the Scheme by a simple majority in number of Scheme Shareholders, representing at least 75 per cent. in value of the Scheme Shares held by Scheme Shareholders at the Voting Record Time, present and voting either in person or by proxy, at the Scheme Meeting (or at any adjournment of such meeting);

 

§ the approval of the resolution to approve the Scheme set out in the notice convening the EGM by the requisite majority of Shareholders at the EGM (or at any adjournment of such meeting);

 

§ the Scheme being sanctioned by the High Court (with or without any modification(s), addition(s) or condition(s) approved or imposed by the High Court and agreed to by the Company pursuant to Section 453(2)(c) of the Act; 

 

§ the delivery of a copy of the Scheme Order to the Registrar of Companies for registration in accordance with Section 454 of the Act; and

 

§ the Directors not having resolved to abandon, discontinue and/or withdraw the Scheme prior to the High Court Hearing.

 

3.    Consents and Meetings

 

In order to become effective, the Scheme must be approved by the requisite majority of Scheme Shareholders at the Voting Record Time (i.e. registered Shareholders of Participating Shares in Non-ICSD Funds at the Voting Record Time) at the Scheme Meeting.

 

The implementation of the Scheme will also require a resolution to approve the Scheme to be passed by the requisite majority of Shareholders at the Voting Record Time at the separate EGM.

 

Scheme Meeting

 

The Scheme Meeting has been convened by the Directors for 8.00 am (Irish Standard Time) on 7 September, 2020 to enable Scheme Shareholders to consider and, if thought fit, approve the Scheme. At the Scheme Meeting, voting will be by a poll and not by a show of hands. 

 

The approval required at the Scheme Meeting is that those voting to approve the Scheme must represent a simple majority in number of Scheme Shareholders, representing at least 75 per cent. in value of the Scheme Shares held by Scheme Shareholders at the Voting Record Time, present and voting either in person or by proxy.

 

The value of each Scheme Share for the purpose of the voting threshold set out above will be the Net Asset Value (as that term is defined in the Articles) of the Scheme Share as at the Voting Record Time. Where the base currency of any Scheme Share is a currency other than euro, the Net Asset Value of such Scheme Share shall be converted to and expressed in euro using the VM/Reuters 4pm rate (this being the exchange rate typically used by the Fund administrator) on the date of the Voting Record Time, for the purpose of voting at the Scheme Meeting.

 

Notice in respect of the Scheme Meeting is set out in Part 3 of this Circular with a Form of Proxy appended hereto. Entitlement to attend and vote at the Scheme Meeting and the number of votes which may be cast at the meeting will be determined by reference to the Register of Members at the Voting Record Time being 8.00 am (Irish Standard Time) on 6 September, 2020 or, if the Scheme Meeting is adjourned, 8.00 am (Irish time) on the day before the day appointed for the adjourned Scheme Meeting.

 

Extraordinary General Meeting

In addition, the EGM has been convened for 9.00 am (Irish time) on 7 September, 2020 (or, if later, as soon as the Scheme Meeting shall have been concluded or adjourned) to consider and, if thought fit, pass the resolutions described below. The full text of the resolutions is set out in the notice of EGM which is set out in Part 4 of this Circular with a Form of Proxy appended hereto.

 

Resolution 1:

 

The resolution proposes that, subject to the requisite majority of Scheme Shareholders approving the Scheme at the Scheme Meeting, the Scheme be approved and that the Directors be authorised to take all steps and enter all agreements and arrangements necessary to implement the Scheme.

 

The resolution will be proposed as an ordinary resolution of the Company and will therefore require the approval of a simple majority (i.e. greater than 50 per cent.) of votes cast, in person or by proxy, at the EGM in order to be passed.

 

Resolution 2:

 

As you will likely be aware, at the May EGM, the Company approved a small number of amendments to its Articles (by way of special resolution dated 28 May, 2020) including, (i) the change of name from PIMCO Fixed Income Source ETFs plc to PIMCO ETFs plc, subject to the approval of the Central Bank and the Registrar of Companies in Ireland (both approvals subsequently issued) and (ii) to enable the Common Depositary's Nominee, when it becomes the sole registered Shareholder following effectiveness of the Scheme and adoption of the ICSD Model, to form a quorum (by itself) in order to vote any Participating Shares registered in its name at class or other general meetings of Shareholders (the quorum required at a general meeting of the Company as a whole would otherwise be two Shareholders entitled to vote).

 

For the avoidance of any doubt relating to the administrative oversight in the distribution of the Circular as outlined above, Shareholders of the Company shall be asked at the EGM to confirm (i) the special resolution passed at the May Meeting (with effect from 28 May, 2020), and all action taken in pursuance thereof and (ii) the Articles (as amended by special resolution dated 28 May, 2020) constitute the proper and effective memorandum and articles of association of the Company (until such time as may be further amended by the Shareholders of the Company).The Articles can be obtained free of charge from the Administrator or at www.pimco.com.

 

Resolution 2 will be proposed as a special resolution of the Company and will therefore require the approval of not less than 75 per cent. of votes cast, in person or by proxy, at the EGM in order to be passed.

 

Out of the two resolutions being proposed at the EGM, the implementation of the Scheme is conditional upon the passing of Resolution 1 only.

 

Notice in respect of the EGM is set out in Part 4 of this Circular with a Form of Proxy appended thereto. Entitlement to attend and vote at the EGM and the number of votes which may be cast at the meeting will be determined by reference to the Register of Members at the Voting Record Time being 8.00 am (Irish Standard Time) on 6 September, 2020 or, if the EGM is adjourned, 8.00 am (Irish time) on the day before the day appointed for the adjourned EGM.

 

 

High Court Hearing 

 

If the Scheme is approved at the Scheme Meeting and the EGM, the Company will apply to the High Court for directions in respect of the High Court Hearing to sanction the Scheme, with that final hearing expected to take place in the fourth quarter of 2020. Legal notices advertising the date of the final High Court Hearing will be published following the application by the Company to the High Court for directions. Each Scheme Shareholder is entitled to attend the High Court Hearing in person or to be represented by counsel or a solicitor (at their own expense) to support or oppose the sanctioning of the Scheme.

 

 

4.    The Directors and the effects of the Scheme on their interests

 

The names of the current Directors and the effect of the Scheme on their interests are set out below. The address of each Director listed below is c/o PIMCO ETFs plc, 78 Sir John Rogerson's Quay, Dublin 2, D02 HD32, Ireland.

 

Name

V. Mangala Ananthanarayanan

Ryan Blute

John Bruton

Craig A. Dawson

David M. Kennedy

Frances Ruane

 

Effects of the Scheme on the interests of the Directors

 

The service contracts or letters of appointment of the Directors do not contain any provision under which they would benefit from the implementation of the Scheme or the adoption of the ICSD Model. As such, the Scheme will not have any material effect on the interests of the Directors.

 

5.    Costs 

 

The costs of the Scheme directly incurred by the Company, including costs of the preparation, approval and implementation of the Scheme, will be borne by the Company's promoter.

 

6.    Overseas Shareholders

 

The release, publication or distribution of this Circular or the related Forms of Proxy in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this Circular and the related Forms of Proxy (and any other documents relating to the Scheme) are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the Company disclaims any responsibility or liability for the violations of any such restrictions by any person.

 

Notwithstanding the foregoing, the Company retains the right to permit the release, publication or distribution of the Circular or the Forms of Proxy to any Restricted Overseas Shareholder who satisfies the Company (in its sole discretion) that doing so will not infringe the laws of the relevant Restricted Jurisdiction, or require  compliance with any governmental or other consent or any registration, filing or other formality that the Company  is unable to comply with or regards as unduly onerous to comply with.

 

 

 

7.    Tax Implications

 

The information given in this Circular is not exhaustive and does not constitute legal or tax advice. The tax consequences of the Scheme may vary depending on your tax status and tax laws in your country of residence or domicile. You should consult your own professional advisers as to the implications of the Scheme under the laws of the jurisdictions in which you may be subject to tax.

 

8.    Recommendation

 

As from 30 March 2021, Irish domiciled ETFs will no longer be able to rely on the CREST System for the settlement of their shares, the Directors believe that the implementation of the Scheme in order to adopt the ICSD Model is in the best interests of the Company and its Shareholders as a whole and, accordingly, the Directors strongly recommend that you vote in favour of each of the resolutions at the Scheme Meeting and EGM.

 

9.    Publication of results 

 

The results of the Scheme Meeting and EGM (or any adjournments thereof) will be announced through Euronext Dublin and will be published in an appropriate manner in each of the other jurisdictions in which Participating Shares are listed on a stock exchange. The results (including confirmation of any adjournment) will also be available at www.pimco.com on the next Business Day following the relevant meetings (or any adjournments thereof). In addition, in the event that the Scheme is subsequently sanctioned by the High Court, that fact and the Effective Date of the Scheme, which is anticipated to be a date in the fourth quarter of 2020, will be announced and published in the same manner. If there is any change to the anticipated Effective Date of the Scheme, the revised date (if any) will also be announced and published in the same manner.

 

If the Scheme is approved at the Scheme Meeting and the EGM, a notice will be advertised in at least two daily newspapers circulating in Ireland notifying of the passing of the resolutions approving the Scheme along with notifying that an application will be made to the High Court for the sanctioning of the Scheme.

 

Subject to the passing of the resolution to be considered at the Scheme Meeting, the passing of the resolution to be considered at the EGM and the sanctioning of the Scheme by the High Court, the Company's Prospectus will be updated with effect from the Effective Date of the Scheme.

 

For any questions regarding this matter, Shareholders may consult their financial adviser, the Company's appointed representative in that country or the Administrator. The Administrator may be contacted via e-mail at [email protected], or by telephone as follows:

 

EMEA: +353 1 776 9990

Hong Kong: +852 35561498

Singapore: +65 68267589

Americas: +1 416 5068337

 

Yours faithfully,

 

 

 

 

__________________

Chairman,

For and on behalf of

PIMCO ETFs plc

 

 

 

PART 2

 

SCHEME OF ARRANGEMENT UNDER CHAPTER 1 OF PART 9 OF THE COMPANIES ACT 2014

 

BETWEEN

 

PIMCO ETFS PLC

(FORMERLY KNOWN AS PIMCO FIXED INCOME SOURCE ETFS PLC)

AND

THE SCHEME SHAREHOLDERS (AS HEREINAFTER DEFINED)

 

RECITALS:

 

A.   The Company is an open-ended umbrella investment company with variable share capital and having segregated liability between its sub-funds, incorporated with limited liability in Ireland under registration number 489440 and authorised by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended.

 

B.   The authorised share capital of the Company is two redeemable non-participating shares of no par value and 500,000,000,000 participating shares of no par value.

 

C.   The purpose of the Scheme is to provide for the transfer of the legal title to the Dematerialised Shares from Scheme Shareholders to the Common Depositary's Nominee at the Effective Date in consideration for the Common Depositary's Nominee agreeing to the Scheme Shareholders continuing to hold a beneficial interest in the same number of Dematerialised Shares in the same sub-fund(s) of the Company as they held immediately prior to the Effective Date.

 

D.   Upon the transfer of the legal title to the Dematerialised Shares to the Common Depositary's Nominee, the Dematerialised Shares are to be re-materialised and are to be evidenced by way of a global share certificate to be held by the Common Depositary on behalf of the Common Depositary's Nominee.

 

E.   Citibank Europe p.l.c. and Citivic Nominees Limited have agreed to submit to the Scheme and to appear by counsel at the Hearing. Each of Citibank Europe p.l.c. and Citivic Nominees Limited have agreed to undertake to the High Court at the Hearing to be bound by and to execute and do and procure to be executed and done by Citibank Europe p.l.c. and Citivic Nominees Limited respectively all such documents, acts and things as may be necessary or desirable to be executed or done by Citibank Europe p.l.c. and Citivic Nominees Limited respectively for the purpose of giving effect to the Scheme.

 

The Scheme of Arrangement

 

1.   Definitions

 

In this Scheme, unless inconsistent with the subject or context, the following expressions bear the following meanings:

 

"Act" means the Companies Act 2014 of Ireland (as amended);

 

"Circular" means the circular issued to the holders of the legal title to the shares of the Company dated 12 August, 2020;

 

"Common Depositary" means Citibank Europe p.l.c.;

 

"Common Depositary's Nominee" means Citivic Nominees Limited;

 

"Company" means PIMCO ETFs plc (formerly known as PIMCO Fixed Income Source ETFS plc);

 

"CREST" means the computerised settlement system operated by Euroclear UK & Ireland Limited through which the legal title to shares of companies can be evidenced electronically;

 

"CRO" means the Companies Registration Office being the Registrar of Companies in Ireland;

 

"Dematerialised Shares" means the participating shares of the Company which have been designated to the Scheme Funds, which shares are evidenced electronically via CREST immediately prior to the Effective Date;

 

"Effective Date" means the date and time on which the Scheme is to become binding and effective on the Company and the Scheme Shareholders;

 

"Extraordinary General Meeting" or "EGM" means the extraordinary general meeting of the Company held at 78 Sir John Rogerson's Quay, Dublin 2, Ireland on 7 September, 2020, at 9.00 a.m.;

 

"Forms of Proxy" means the form of proxy for the Scheme Meeting, and the form of proxy for the EGM, as the context may require;

 

"Hearing" means the hearing of the application by the Company to the High Court to sanction the Scheme under Chapter 1 of Part 9 of the Act;

 

"Restricted Jurisdiction" means any jurisdiction in respect of which it would be unlawful for the Circular or the related Forms of Proxy to be released, published or distributed, in whole or in part;

 

"Restricted Overseas Shareholder" means a Shareholder (including an individual, partnership, unincorporated syndicate, limited liability company, unincorporated organisation, trust, trustee, executor, administrator or other legal representative) in, or resident in, or any Shareholder whom the Company believes to be in, or resident in, a Restricted Jurisdiction;

 

"Scheme" means the proposed scheme of arrangement under Chapter 1 of Part 9 of the Act as detailed in the Circular, with or subject to any modification(s), addition(s) or condition(s) approved or imposed by the High Court of Ireland;

 

"Scheme Funds" means the following sub-funds of the Company:

 

·      PIMCO Euro Short Maturity UCITS ETF;

·      PIMCO US Dollar Short Maturity UCITS ETF;

·      PIMCO Sterling Short Maturity UCITS ETF;

·      PIMCO Emerging Markets Advantage Local Bond Index UCITS ETF;

·      PIMCO U.S. Short-Term High Yield Corporate Bond Index UCITS ETF;

·      PIMCO Covered Bond UCITS ETF;

·      PIMCO Euro Low Duration Corporate Bond UCITS ETF; and

·      PIMCO Euro Short-Term High Yield Corporate Bond Index UCITS ETF;

 

"Scheme Meeting" means the meeting of the Scheme Shareholders held at 78 Sir John Rogerson's Quay, Dublin 2, Ireland, on 7 September, 2020, at 8.00 a.m.;

 

"Scheme Order" means the order of the High Court of Ireland under section 453(2)(c) of the Act sanctioning the Scheme; and

 

"Scheme Shareholders" means those persons and entities holding the legal title to the Dematerialised Shares immediately prior to the Effective Date; and

 

"Shareholder" means holders of the participating shares in the Company which are of no par value.

 

 

 

2.   Transfer of the Dematerialised Shares

 

Subject to Clause 5 of this Scheme, the legal (but not beneficial) title to the Shares shall transfer automatically, and without any further action or instrument required, from the Scheme Shareholders to the Common Depositary's Nominee on the Effective Date, free from all liens, equities, charges, encumbrances and other interests and together with all and any rights at the date of this Scheme or thereafter attached thereto including voting rights and the right to receive and retain in full all dividends and other distributions declared, paid or made thereon (if any).

 

Upon the transfer of the legal title to the Dematerialised Shares to the Common Depositary's Nominee on the Effective Date, the Dematerialised Shares shall be re-materialised and evidenced by way of a global share certificate to be held by the Common Depositary on behalf of the Common Depositary's Nominee, with the Common Depositary's Nominee being registered in the Company's share register as the holder of the legal title to the Dematerialised Shares.

 

3.   Consideration for the Transfer of the Dematerialised Shares

 

In consideration for the transfer of the Dematerialised Shares pursuant to Clause 2 of this Scheme of Arrangement, the Scheme Shareholders shall continue to hold a beneficial interest in the same Dematerialised Shares as they held immediately prior to the Effective Date.

 

4.   Overseas Shareholders

 

4.1        The provisions of Clauses 2 and 3 shall be subject to any prohibition or condition imposed by law.

 

4.2        Notwithstanding the provisions of Clause 4.1, the Company retains the right to permit the release, publication or distribution of the Circular or the Forms of Proxy to any Restricted Overseas Shareholder who satisfies the Company (in its sole discretion) that doing so will not infringe the laws of the relevant Restricted Jurisdiction, or require compliance with any governmental or other consent or any registration, filing or other formality that the Company is unable to comply with or regards as unduly onerous to comply with.

 

5.   The Effective Date

 

5.1        This Scheme shall become effective on the Effective Date subject to:

 

5.1.1     any modification(s), addition(s) or condition(s) approved or imposed by the High Court of Ireland;

 

5.1.2     a copy of the Scheme Order having been delivered to the CRO on or before the Effective Date pursuant to section 454(1) of the Act; and

 

5.1.3     the Company and the Common Depositary's Nominee not having agreed prior to the Effective Date, with the consent of the High Court of Ireland (where required), not to proceed with the Scheme and in such case all undertakings given to the High Court of Ireland in respect of this Scheme shall be deemed to have lapsed with immediate effect.

 

6.   Modification

 

The Company may consent on behalf of all persons concerned to any modification of or addition to this Scheme or any condition that the High Court of Ireland may approve or impose.

 

7.   Costs

 

The costs of the Scheme directly incurred by the Company, including costs of the preparation, approval and implementation of the Scheme will be borne by PIMCO Europe Limited.

 

8.   Governing Law

 

This Scheme shall be governed by, and construed in accordance with, the laws of Ireland. The Company and the Scheme Shareholders hereby agree that the High Court of Ireland shall have exclusive jurisdiction to hear and determine any suit, action or proceeding or to settle any dispute which may arise in relation thereto. 

 

 

 

 

 

 

 

 

PART 3 - NOTICE OF SCHEME MEETING

 

 

NOTICE IS HEREBY GIVEN that a Scheme Meeting of the holders of the Scheme Shares (as defined in the Scheme referred to below) will be held at the offices of State Street Fund Services (Ireland) Limited, 78 Sir John Rogerson's, Dublin 2, Ireland (the "Company Secretary") on 7 September, 2020 at 8.00 am (Irish Standard Time) for the purposes of their considering and voting on the following resolution:

 

 "THAT the Scheme (as defined in the Circular issued to Shareholders of the Company on 12 August, 2020 and a print of which has been produced to this meeting and for the purposes of identification signed by the Chairman thereof) in its original form or with or subject to any modification(s), addition(s) or condition(s) approved or imposed by the High Court be agreed to."

 

A copy of the said Scheme and a copy of the Scheme Circular required to be furnished pursuant to Section 452 of the Companies Act 2014 are incorporated in the document of which this Notice forms part. In order to be passed, the resolution requires the approval of a majority in number of Scheme Shareholders representing not less than three-fourths (75 per cent.) in value of the Scheme Shares held by such holders voting in person or by proxy.

 

Capitalised terms used, but not defined, in this Notice shall bear the meanings given to those terms in the document of which this Notice forms part.

 

The said Scheme will be subject to the subsequent sanction of the High Court.

 

 

 

 

 

____________________________________

For and on behalf of

State Street Fund Services (Ireland) Limited

Company Secretary

 

 

Dated this 12 day of August, 2020

 

 

 

 

 

 

 

 

 

FORM OF PROXY FOR SCHEME MEETING

 

PIMCO ETFs PLC

(the "Company")

 

I/We*                                                                                                                                       

 

of                                                                                                                                            

 

being a Shareholder/Shareholders* of the above named Company hereby appoint --the chairman

or, failing him/her, Ciara Timon, Fiona McMurray, Jacqui Horgan, Patrick Collins, Bernice Kelly or Ken Barry of State Street Fund Services (Ireland) Limited or, failing him/her,

 

                                                  of  ____________________________________________________

 

as my/our* proxy to vote on my/our* behalf in the manner indicated below at the Scheme Meeting of the Company to be held at the registered office of the Company, c/o State Street Fund Services (Ireland) Limited, 78 Sir John Rogerson's Quay, Dublin 2, D02 HD32, Ireland on 7 September, 2020 at 8.00 am and at any adjournment thereof.

 

Signed  __________________________

 

Dated this ------____ day of ___--______, 2020

 

(*delete as appropriate)

 

The proxy is to vote as follows:

 

Please indicate in the table below the number of your Scheme Shares per each Fund that you wish to be cast  FOR and/or AGAINST the resolution and the number of your Scheme Shares per each Fund (if any) in respect of which you wish to abstain from voting. If you wish to vote all of your Scheme Shares in a particular Fund FOR or AGAINST the resolution or abstain from voting in respect of all of your Scheme Shares in a particular Fund, please place an "x" in the relevant box in the below table related to that Fund. If no specific direction as to voting is given the proxy will vote or abstain from voting at his or her discretion.

 

Capitalised terms used, but not defined, in this Form of Proxy shall bear the meanings given to those terms in the Circular dated 12 August, 2020 accompanying this Form of Proxy.                                                                                             

Fund	No. of Scheme Shares to vote FOR the Resolution	No. of Scheme Shares to vote AGAINST the Resolution	No. of Scheme Shares ABSTAINED
PIMCO Euro Short Maturity UCITS ETF
PIMCO US Dollar Short Maturity UCITS ETF
PIMCO Sterling Short Maturity UCITS ETF
PIMCO Emerging Markets Advantage Local Bond Index UCITS ETF
PIMCO US Short-Term High Yield Corporate Bond Index UCITS ETF
PIMCO Covered Bond UCITS ETF
PIMCO Euro Low Duration Corporate Bond UCITS ETF
PIMCO Euro Short-Term High Yield Corporate Bond Index UCITS ETF

 

 

 

Notes to Form of Proxy

 

 

1.    A Shareholder may appoint a proxy of his own choice. If the appointment is made insert the name of the person appointed as proxy in the space provided. A person appointed to act as a proxy need not be a Shareholder.

 

2.    If the appointer is a corporation, this form must be under the common seal or under the hand of an officer or attorney duly authorised on his behalf.

 

3.    In the case of joint Shareholders, the signature of any one Shareholder will be sufficient, but the names of all the joint Shareholders should be stated.

 

4.    If this form is returned without any indication as to how the person appointed proxy shall vote he will exercise his discretion as to how he votes or whether he abstains from voting.

 

5.    To be valid, this form must be completed and deposited by mail or by fax for the attention of Ciara Timon, State Street Fund Services (Ireland) Limited, 78 Sir John Rogerson's Quay, Dublin 2, D02 HD32, Ireland or sent to fax number +353 1 4161450, not less than 48 hours before the time fixed for holding the Scheme Meeting or adjourned meeting.

 

 

 

 

 

PART 4 - NOTICE OF EXTRAORDINARY GENERAL MEETING

 

 

 

NOTICE IS HEREBY GIVEN that the extraordinary general meeting of the Shareholders of the Company will be held at State Street Fund Services (Ireland) Limited, 78 Sir John Rogerson's Quay, Dublin 2, D02 HD32, Ireland on 7 September, 2020 at 9.00 am for the following purposes:

 

Ordinary Resolution

 

To consider, and if thought fit, pass the following resolution as an ordinary resolution of the Company:

 

"THAT, subject to the approval of the Scheme (as defined in the circular issued to shareholders of the Company dated 12 August, 2020 (the "Circular")) by the requisite majority at the Scheme Meeting (as defined in the Circular), the Scheme (a print of which has been produced to this meeting and for the purposes of identification signed by the Chairperson thereof) in its original form or with or subject to any modification(s), addition(s) or condition(s) approved or imposed by the High Court be approved and the directors of the Company be authorised to take all such action as they consider necessary or appropriate for carrying the Scheme into effect."

 

Special Resolution

 

To consider, and if thought fit, pass the following resolution as a special resolution of the Company:

 

"THAT, for the avoidance of doubt, this meeting hereby confirms, (i) with effect from 28 May, 2020, the special resolution passed at the extraordinary general meeting of the Shareholders of the Company held on 28 May, 2020 and all action taken in pursuance thereof and (ii) the Articles (as amended by special resolution dated 28 May, 2020) constitute the proper and effective memorandum and articles of association of the Company (until such time as may be further amended by the Shareholders of the Company)."

 

Capitalised terms used, but not defined, in this Form of Proxy shall bear the meanings given to those terms in the Circular dated 12 August, 2020 accompanying this Form of Proxy.      

 

 

 

 

____________________________________

For and on behalf of

State Street Fund Services (Ireland) Limited

Secretary

 

Dated this 12 day of August, 2020

 PROXY FORM FOR EXTRAORDINARY GENERAL MEETING

 

PIMCO ETFs PLC

(the "Company")

 

I/We*                                                                                                                                       

 

of                                                                                                                                            

 

being a Shareholder/Shareholders* of the above named Company hereby appoint --the chairman

or, failing him/her, Ciara Timon, Fiona McMurray, Jacqui Horgan, Patrick Collins, Bernice Kelly or Ken Barry of State Street Fund Services (Ireland) Limited or, failing him/her,

 

                                                  of  ____________________________________________________

 

as my/our* proxy to vote on my/our* behalf in the manner indicated below at the extraordinary general meeting of the Company to be held at the registered office of the Company, c/o State Street Fund Services (Ireland) Limited, 78 Sir John Rogerson's Quay, Dublin 2, D02 HD32, Ireland on 7 September, 2020 at 9.00 am and at any adjournment thereof.

 

Signed  __________________________

 

Dated this ------____ day of ___--______, 2020

 

(*delete as appropriate)

 

ORDINARY RESOLUTION

                                                                                                            For/Yes          Against/No  Abstained

1.   To approve the Scheme of Arrangement

 

SPECIAL RESOLUTION

                                                                                                            For/Yes          Against/No  Abstained

2.   THAT, for the avoidance of doubt, this meeting hereby confirms, (i) with effect from 28 May, 2020, the special resolution passed at the extraordinary general meeting of the Shareholders of the Company held on 28 May, 2020 and all action taken in pursuance thereof and (ii) the Articles (as amended by special resolution dated 28 May, 2020) constitute the proper and effective memorandum and articles of association of the Company (until such time as may be further amended by the Shareholders of the Company).

 

Notes to Form of Proxy

 

1.    Two members present in person or by proxy entitled to vote shall be a quorum for all purposes. If within half an hour from the time appointed for the extraordinary general meeting, a quorum is not present, it shall be adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the Directors may determine. A member entitled to attend and vote at any such adjourned meeting is entitled to appoint a proxy to attend, speak and vote in his place and that a proxy need not be a member of the Company. This notice shall be deemed to constitute due notice of any such adjourned meeting within the meaning of the Articles of Association. 

 

2.    A Shareholder may appoint a proxy of his own choice. If the appointment is made insert the name of the person appointed as proxy in the space provided. A person appointed to act as a proxy need not be a Shareholder.

 

3.    If the appointer is a corporation, this form must be under the common seal or under the hand of an officer or attorney duly authorised on his behalf.

 

4.    In the case of joint Shareholders, the signature of any one Shareholder will be sufficient, but the names of all the joint Shareholders should be stated.

 

5.    If this form is returned without any indication as to how the person appointed proxy shall vote he will exercise his discretion as to how he votes or whether he abstains from voting.

 

6.    To be valid, this form must be completed and deposited by mail or by fax for the attention of Ciara Timon, State Street Fund Services (Ireland) Limited, 78 Sir John Rogerson's Quay, Dublin 2, D02 HD32, Ireland or sent to fax number +353 1 4161450, not less than 48 hours before the time fixed for holding the extraordinary general meeting or adjourned meeting.

 

 

 

 

 

 

This announcement has been issued through the Companies Announcement Service of Euronext Dublin.