Questions related to making an investment
1. How do I invest? Can I buy Trust units directly from Sprott
Units of the Platinum and Palladium Trust trade in US$ on the
TSX and NYSE Arca exchanges and are purchased through a brokerage.
Sprott doesn't sell the units directly. They can be purchased like
any regular equity through full service and discount brokers,
including in the U.S. through Sprott Global Resource Investments
(sprottglobal.com) at 800.477.7853, and in
Canada through Sprott Private Wealth (sprottwealth.com) at 866.299.9906. Both firms
are affiliates of the Trust.
Ticker Symbol: PPT.U (TSX)/SPPP (NYSE Arca)
CUSIP number: 85207Q104
2. Is there a CDN$ version of the Platinum and Palladium
Trust, or is it denominated in US$ on both the TSX and NYSE
Units of the Platinum and Palladium Trust are denominated
in US$ on both the TSX (PPT.U) and NYSE Arca (SPPP).
3. What are the fees and expenses for this product?
What is the Management Expense Ratio (MER)?
Unitholders may be subject to brokerage commissions or other
fees associated with trading (buying and selling) the units. There
are no other fees payable directly by the unitholder except those
related to the redemption of units for physical bullion.
For many investors, the transaction costs related to owning the
Trust are expected to be lower than the costs to purchase, store
and insure physical bullion directly.
The Sprott Physical Platinum and Palladium Trust pays the
Manager a monthly management fee equal to 1/12 of 0.50% of the
value of net assets of the Trust, plus any applicable Canadian
taxes. The Trust pays the applicable operating and administrative
expenses including for storage of the bullion.
The Management Expense Ratio (MER) is reported in the Platinum
and Palladium Trust's quarterly financial statements and management
report of fund performance, which can be found in the Financial
Reports section of the website.
4. Do units of the Platinum and Palladium Trust track exactly
the spot price of the underlying metals? How are the units priced
(explain premium/discount calculation)?
The units of the Platinum and Palladium Trust will generally
trade at a premium or discount to the net asset value per unit
(NAVPU), depending on relative supply and demand for the units in
the secondary market (the stock exchanges).
The Platinum and Palladium Trust is a closed-end mutual fund
trust and not an open-ended exchange traded fund (ETF). Unlike the
Platinum and Palladium Trust, ETFs issue or redeem units daily,
reflecting purchases or redemptions of units by investors. Such
purchases and redemptions are effected by a financial intermediary,
engaged by the ETF administrator to create a market for the ETF
units. As such, the trading price of ETFs on the stock exchange
generally do not deviate significantly from net asset value.
By contrast, the Platinum and Palladium Trust does not employ
any financial intermediary, and does not intend to issue new units,
or redeem existing units, on a day-to-day basis. As such, the units
of the Platinum and Palladium Trust will generally trade at a
premium or discount to the net asset value per unit (NAVPU),
depending on relative supply and demand for the units in the
secondary market. The NAVPU and the premium-discount calculation
(the % difference between the price of the Platinum and Palladium
Trust units on the stock exchange and the NAVPU) are recorded each
trading day on the Net Asset Value section of the website.
Historical data charts showing the premium/discount frequency
distribution are found on the same webpage.
The Trust believes that it maintains a strong position by
offering investors close to full exposure to the price of physical
platinum and palladium bullion with the ability to redeem units for
physical platinum and palladium bullion, the liquidity of an ETF,
and a potential tax advantage for U.S. investors, relative to
holding platinum and palladium directly, as compared to a platinum
and palladium ETF (see 'Material Tax Considerations-Material U.S.
Federal Income Tax Considerations-U.S. Federal Income Tax
Considerations of U.S. Holders' in the Prospectus).
5. Is the Platinum and Palladium Trust backed by physical
With the exception of cash held by the Trust to pay expenses and
potential redemptions, the Trust exclusively invests in physical
bullion. At any given time, the Manager intends to hold 97% of the
total net assets of the Trust in physical bullion, in Good Delivery
plate and/or ingot form for the platinum and palladium bullion. The
Trusts do not invest in platinum or palladium certificates, futures
or other financial instruments that represent platinum or palladium
or that may be exchanged for platinum or palladium.
Physical Bullion-related Questions
6. How much platinum and palladium does the Trust hold?
The total ounces of platinum and palladium held within the
Platinum and Palladium Trust and the number of units outstanding
can be found on the Net Asset Value section of the
7. Who stores the platinum and palladium bullion?
The Trust's physical platinum bullion is unencumbered and
stored fully allocated in a secure third party storage location in
Canada. The physical palladium bullion is fully allocated and
segregated in a secure third party storage location in London and
Zurich. The physical bullion is subject to a physical count
periodically on a spot inspection basis and subject to audit
procedures by the Trusts' external auditors on at least an annual
basis. Please see 'Custody of the Trust's Assets' in the
8. What is the process to take physical delivery of platinum
and palladium bullion?
Unitholders will have the ability, on a monthly basis to redeem
their units for physical bullion, provided the redemption request
is for a minimum of 25,000 units, for a redemption price equal to
100% of the NAV of the redeemed units, less redemption and delivery
- the handling of the notice of redemption
- the delivery of the physical bullion for units that are being
redeemed (estimated delivery fee per ounce of physical platinum and
palladium bullion was $0.50 and $5.00, respectively, at the time of
the Prospectus, though these fees are subject to change in
accordance with the Storage Agreements)
- and the applicable storage in-and-out fees. The in-and-out fee
per plate or ingot of physical platinum bullion was $4.00 and the
in-and-out fee per kilogram of physical palladium bullion was $0.71
(with a minimum of $40.00), at the time of the Prospectus.
For full details including the procedure to redeem units for
physical bullion, please see 'Redemption of Units' in the
Please refer to the Prospectus for more information on
material tax considerations. The tax information in the Prospectus
is a summary of a general nature only and is not intended to
constitute legal or tax advice to any prospective purchaser of
units. Prospective purchasers of units should consult with their
own tax advisors about tax consequences of an investment in units
based on their particular circumstances.
9. Are the Platinum and Palladium Trust units eligible for
registered plans in Canada (e.g. RRSPs, TFSAs, etc.)?
Provided that either (i) the Trust qualifies as a ''mutual
fund trust'' within the meaning of the Tax Act or (ii) the units
are listed on a ''designated stock exchange'' for purposes of the
Tax Act, the units, if issued on the date hereof, will be qualified
investments under the Tax Act and the regulations thereunder for
registered retirement savings plans, which we will refer to as
RRSPs, registered retirement income funds, which we will refer to
as RRIFs, deferred profit sharing plans, registered disability
savings plans, registered education savings plans and tax-free
savings accounts, which we will refer to as TFSAs, and
collectively, plan trusts. Please see 'Material Tax Considerations
- Taxation of Registered Plans' in the Prospectus.
10. Can I buy these units in my IRA/Roth IRA?
The Platinum and Palladium Trust believes a purchase of its
units will qualify as an eligible investment for individual
retirement accounts although there can be no assurance in that
Section 406 of The U.S. Employee Retirement Income Security Act
(ERISA) of 1974 as amended and Section 4975 of the U.S. Internal
Revenue Code (Code) of 1986 as amended, prohibit certain
transactions, unless a statutory or administrative exemption is
- the assets of an ERISA Plan
- as well as those plans and accounts that are not subject to
ERISA but which are subject to Section 4975 of the Code, such
- individual retirement
accounts (IRAs); and
- entities that are deemed to hold the assets of such plans and
accounts ("Plans") and certain persons (to whom we will refer as
parties in interest or disqualified persons) having certain
relationships to such Plans. A party in interest or disqualified
person who engages in a prohibited transaction may be subject to
excise taxes and other penalties and liabilities under ERISA and
The Trust anticipates that it qualifies for the exemption under
the Plan Asset Regulations for ''publicly offered securities,''
although there can be no assurance in that regard.
In order to be considered a ''publicly offered security,'' the
units must be:
- freely transferable;
- part of a class of securities that is owned by 100 or more
investors independent of the Trust and of one another; and
I. part of a class of securities registered under Section 12(b)
or 12(g) of the Exchange Act; or
II. sold to the Plan as part of an offering of securities to the
public pursuant to an effective registration statement under the
Unites States Securities Act of 1933, as amended and the class of
securities of which the securities are a part is registered under
the Exchange Act within 120 days (or such later time as may be
allowed by the Securities and Exchange Commission) after the end of
the Gold Trust's fiscal year during which the offering of such
securities to the public occurred.
For further details, please see 'U.S. ERISA considerations' in
11. What are the tax implications of investing in the Platinum
and Palladium Trust?
For U.S. taxable holders of Platinum and Palladium Trust units,
any gains realized on the sale of units by an investor that is an
individual, trust or estate, including such investors that own
units through partnerships and other pass-through entities for U.S.
federal income tax purposes, may be taxable as long-term capital
gains (at a maximum rate of 20% compared to a long-term capital
gains tax rate of 28% applied against most precious metals ETFs and
physical coins), provided that such U.S. investor has held the
units for more than one year at the time of the sale and such U.S.
investor has made a timely and valid Qualified Electing Fund
election with respect to the units on the IRS Form 8621. Within 45
days from the end of each taxable year of the Trust, the Trust will
provide a Passive Foreign Investment Company (PFIC) Annual
Information Statement on its website providing all information
necessary to enable unitholders or beneficial owners of units, as
applicable, to elect to treat the Trust as a QEF. Please visit the
For detail on U.S. and Canadian federal income tax
considerations, please see "Material Tax Considerations' in the
For U.S. non-corporate investors who hold units for one year and
timely file a QEF form, gains realized on the sale of the Trusts'
units are currently taxed at a long-term capital gains rate with a
maximum of 20%, versus a maximum of 28% applied against most
precious metals ETFs and physical coins.
12. How do I get physical certificates evidencing ownership of
In the United States, there are two methods:
One, you can direct your broker to request a physical
certificate from the Depository Trust Company (DTC). This may be a
more expensive option as DTC generally charges ~$500 per
Two, you can direct your broker to initiate a DWAC certificate
request (only a broker can initiate this) with the Trust's
co-Transfer Agent, R&T Co (www.rtco.com). See their DWAC
transfer form here:
Check with your brokerage if they offer this service and at what
In Canada, you can direct your broker to withdraw units from CDS
Clearing and Depository Services Inc. When the broker puts in the
withdrawal, the transfer agent in Canada, Equity Financial Trust,
will issue physical certificates to the broker.