Xtrackers II UK Regulatory Announcement: Important Notice to Xtrackers II Shareholders


Xtracker II


Registered office: 49, avenue JF Kennedy, L-1855 Luxembourg,

RCS Luxembourg B-124.284

(the Company)

Important notice to shareholders of the Company

May 27, 2022

The Board of Directors of the Company (the “board of directors”) informs the shareholders of the Company (the “Shareholders”) on certain changes made to the sub-funds of the Company (the “Compartments”) authorized to carry out securities lending, as indicated below.

Capitalized terms used in this notice shall have the same meaning as given to them in the latest version of the Company’s prospectus (the “Prospectus“), unless the context requires otherwise.

Change of securities lending agent

Deutsche Bank AG, acting through its head office in Frankfurt am Main and its branches in London and New York, is currently acting as the Company’s appointed securities lending agent (the “Securities Lending Agent”). The Securities Lending Agent is authorized (i) to enter into Securities Lending Transactions on behalf of the Company and (ii) to invest any monies received/held on behalf of the Company as collateral pursuant to such Securities Lending Transactions. Securities Lending (the “Securities lending services”).

On or after June 28, 2022 (the “Effective date”), the appointment of the securities lending agent will be terminated and the investment manager, DWS Investment GmbH, will resume the provision of securities lending services.

Modification of the maximum proportion of assets subject to securities lending for direct replication funds

The current Prospectus provides that a Direct Replication Sub-Fund may enter into Securities Lending Transactions up to 50% of its assets (the “Maximum proportion of securities lending transactions”) to generate additional revenue and thus offset all or part of its costs. While all assets of a Sub-Fund which engage in Securities Lending Transactions will be eligible for such transactions (without distinction as to the classes of assets in which the Sub-Fund may invest), the expected proportion of the net assets of a Sub-Fund subject to Securities lending transactions will generally vary between 0%. and 50 percent. for each relevant Sub-Fund (the “Expected proportion of securities lending transactions”).

From the Effective Date, the Maximum Proportion of Securities Lending Transactions of the relevant Direct Replication Funds will increase from 50% to 100% of its assets. For avoidance of doubt, the Expected Proportion of Securities Lending Transactions will remain unchanged.

Securities lending fees

Currently, as set out in the relevant Product Annexes, a Sub-Fund undertaking Securities Lending Transactions is allocated 85% of the associated income generated, of which the Sub-Fund receives 70%, with the remaining 15% being received by the Sub-portfolio. Manager, DWS Investments UK Limited. The remaining 15% is allocated to the securities lending agent.

From the Effective Date, the charges for Securities Lending Transactions will change such that the Sub-Fund is allocated 70% of the associated income generated, with the remaining 30% allocated to the Management Company, DWS Investment HER. The Management Company, out of the income attributed to it, (i) shall be entitled to retain 5% of this amount of 30% (i.e. 1.5% of the overall associated income generated) as a commission for monitoring and control of securities lending activities, (ii) pay all fees and commissions directly incurred in connection with securities lending activities (including custody, transaction and collateral management costs and administration costs), and (iii) pay any income remaining after payment of (i) and (ii) to the Investment Manager. The Investment Manager will pay, out of the income it receives from the Management Company, all costs and expenses indirectly incurred in connection with the securities lending activities (including, but not limited to, operational costs , IT, legal, compliance and audit).

For the avoidance of doubt, there will be no change in the proportion of income generated in relation to Securities Lending Transactions attributable to the Sub-Funds, such proportion remaining at 70% of the associated income generated.

Amendments to collateral agreements relating to securities lending transactions

In order to mitigate the counterparty risk associated with Securities Lending Transactions, collateral may be received in accordance with the collateral arrangement set out in the Prospectus.

Currently, collateral received in Securities Lending Transactions may be held by both the Securities Lending Agent and/or The Bank of New York Mellon.

As of the Effective Date, different entities may be involved in collateral management or administration services, depending on the lender and/or collateral management structure. More specifically, the Management Company will delegate:

  1. Collateral Services for Securities Lending Transactions for certain Sub-Funds to State Street Bank International GmbH, Zweigniederlassung Frankfurt with a sub-delegation for certain Sub-Funds to Euroclear Bank SA/NV; and

  1. Management of collateral for Securities Lending Transactions for certain Sub-Funds at The Bank of New York Mellon, Brussels branch (Belgium) with sub-delegation to its branches in London, New York, Orlando and Singapore and BNY Mellon International Operations India Private Limited, from time to time.

As of the Effective Date, the eligibility requirements for collateral will also change. The section “Collateral agreements relating to securities lending transactionsof the Prospectus will be amended to reflect the new collateral requirements.

General informations

Shareholders who subscribe for Shares in the Funds on the primary market and who do not agree to the changes have the right to redeem their Shares in the Funds in accordance with the Prospectus. Such redemptions will be free of any Redemption Charge from the date of this notice until 5:00 p.m. (Luxembourg time) on 27 June 2022. Please note that the Company does not charge any redemption charge for the sale of Shares on the secondary market. Orders to sell Shares through a stock exchange may be placed through an authorized intermediary or stockbroker. Shareholders should note that orders on the secondary market may incur costs over which the Company has no control and to which the above exemption on Redemption Charges does not apply.

Copies of the revised Prospectus and key information documents of the Sub-Funds reflecting the changes will be made available on the Company’s website (www.Xtrackers.com) on or about the Effective Date, and copies may be obtained free of charge on request at the registered office of the Company or from the offices of foreign representatives as soon as they become available.

Shareholders who have questions or for whom any of the above is unclear should seek advice from their stockbroker, bank manager, legal adviser, accountant or other independent financial adviser. Shareholders should also consult their own professional advisers as to the specific tax implications under the laws of the countries of their nationality, residence, domicile or incorporation.

Further information regarding the changes can be obtained from the legal entities mentioned under Contact information below, Foreign Representative Offices or by emailing [email protected]

Neither the content of the Company’s website nor the content of any other website accessible from hyperlinks on the Company’s website is incorporated into or forms part of this announcement.

Xtracker II

Board of directors

Contact information

Xtracker II

49, avenue JF Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg

DWS Investment SA

2, boulevard Konrad-Adenauer, L-1115 Luxembourg, Grand Duchy of Luxembourg

Category Code: MSCM

Sequence number: 869600

Received time (offset from UTC): 20220526T161737+0100

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