MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2019, and its results of operations for the fiscal year ended December 31, 2019, the two months ended December 31, 2018 and the fiscal year ended October 31, 2018.
+Added: The following discussion and analysis was prepared to supplement information contained in the accompanying financial statements and is intended to explain certain items regarding the Trust's financial condition as of December 31, 2020, and its results of operations for the fiscal years ended December 31, 2020 and December 31, 2019.
It should be read in conjunction with the “Selected Financial Data” and the accompanying audited financial statements and related notes thereto contained in this report.
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When the interest deposited, if any, exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trustee converts the excess into USD at the prevailing market rate and distributes the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own).
−Removed: The Trust did not make any distributions during the quarter ended December 31, 2019 .
+Added: The Trust did not pay any distributions during the quarter ended December 31, 2020.
Results of Operations
−Removed: For the year ended December 31, 2019, the two months ended December 31, 2018 and the year ended October 31, 2018
+Added: For the years ended December 31, 2020 and December 31, 2019
During the year ended December 31, 2020, an additional 950,000 Shares were created in exchange for 91,946,141 British Pounds Sterling and 1,150,000 Shares were redeemed in exchange for 111,354,285 British Pounds Sterling.
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As of December 31, 2020, the number of British Pounds Sterling owned by the Trust was 106,331,789, resulting in a redeemable capital Share value of $145,299,977.
−Removed: During the two months ended December 31, 2018, an additional 200,000 Shares were created in exchange for 19,401,440 British Pounds Sterling and 300,000 Shares were redeemed in exchange for 29,102,021 British Pounds Sterling.
+Added: During the year ended December 31, 2019, an additional 1,250,000 Shares were created in exchange for 121,214,247 British Pounds Sterling and 1,050,000 Shares were redeemed in exchange for 101,821,260 British Pounds Sterling.
In addition, 54,267 British Pounds Sterling were withdrawn to pay the portion of the Sponsor’s fee that exceeded interest earned.
As of December 31, 2019, the number of British Pounds Sterling owned by the Trust was 126,044,845, resulting in a redeemable capital Share value of $166,971,382.
−Removed: During the year ended October 31, 2018, an additional 250,000 Shares were created in exchange for 24,289,863 British Pounds Sterling and 700,000 Shares were redeemed in exchange for 67,997,931 British Pounds Sterling.
−Removed: In addition, 393,979 British Pounds Sterling were withdrawn to pay the portion of the Sponsor’s fee that exceeded interest earned.
−Removed: As of October 31, 2018, the number of British Pounds Sterling owned by the Trust was 116,416,407, resulting in a redeemable capital Share value of $148,744,954.
−Removed: An increase in the Trust’s redeemable capital Share value from $135,985,374 at December 31, 2018 to $166,971,382 at December 31, 2019, was primarily the result of an increase in the number of Shares outstanding from 1,100,000 at December 31, 2018 to 1,300,000 at December 31, 2019, coupled with an increase in the Closing Spot Rate from 1.2736 at December 31, 2018 to 1.3248 at December 31, 2019.
−Removed: A decrease in the Trust’s redeemable capital Share value from $148,744,954 at October 31, 2018 to $135,895,374 at December 31, 2018, was the result of a decrease in the number of Shares outstanding from 1,200,000 at October 31, 2018 to 1,100,000 at December 31, 2018 and a decrease in the Closing Spot Rate from 1.2778 at October 31, 2018 to 1.2736 at December 31, 2018.
−Removed: Interest income increased from $256,219 for the year ended October 31, 2018 to $497,896 for the year ended December 31, 2019, attributable primarily to an increase in the annual nominal interest rate paid by the Depository, as set forth in the FXB daily rate chart above, and coupled with an increase in the weighted-average British Pounds Sterling in the Trust.
−Removed: Interest income increased from $31,775 for the two months ended December 31, 2017 to $82,767 for the two months ended December 31, 2018, attributable primarily to an increase in the annual nominal interest rate paid by the Depository, as set forth in the chart above, but partially offset by a decrease in the weighted-average British Pounds Sterling in the Trust.
−Removed: The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the British Pounds Sterling in the Trust.
−Removed: Due primarily to a decrease in the weighted-average British Pounds Sterling in the Trust, the Sponsor’s fee decreased from $722,792 for the year ended October 31, 2018 to $567,982 for the year ended December 31, 2019.
−Removed: The only expense of the Trust during the year ended December 31, 2019 was the Sponsor’s fee.
+Added: A decrease in the Trust’s redeemable capital Share value from $166,971,382 at December 31, 2019 to $145,299,977 at December 31, 2020, was primarily the result of a decrease in the number of Shares outstanding from 1,300,000 at December 31, 2019 to 1,100,000 at December 31, 2020, offset by an increase in the Closing Spot Rate from 1.3248 at December 31, 2019 to 1.367 at December 31, 2020.
+Added: Interest income decreased from $497,896 for the year ended December 31, 2019 to $105,533 for the year ended December 31, 2020, attributable primarily to a decrease in the annual nominal interest rate paid by the Depository, as set forth in the FXB Daily Rate chart above, coupled with a decrease in the weighted-average British Pounds Sterling in the Trust.
The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the British Pounds Sterling in the Trust.
−Removed: Due primarily to a decrease in the weighted-average British Pounds Sterling in the Trust, the Sponsor’s fee decreased from $142,690 for the two months ended December 31, 2017 to $94,658 for the two months ended December 31, 2018.
−Removed: The only expenses of the Trust during the two months ended December 31, 2018 was the Sponsor’s fee.
−Removed: The Trust’s net comprehensive loss for the year ended December 31, 2019 was $70,086, due to the Sponsor’s fee of $567,982 exceeding the interest income of $497,896.
−Removed: The Trust’s net comprehensive loss for the year ended October 31, 2018 was $466,573 due to the Sponsor’s fee of $722,792 exceeding interest income of $256,219.
−Removed: Cash dividends were not paid by the Trust in the year ended October 31, 2018 and the year ended December 31, 2019 as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
−Removed: The Trust’s net comprehensive loss for the two months ended December 31, 2018 was $11,891 due to the Sponsor’s fee of $94,658 exceeding interest income of $82,767.
−Removed: The Trust’s net comprehensive loss for the two months ended December 31, 2017 was $110,915 due to the Sponsor’s fee of $142,690 exceeding interest income of $31,775.
−Removed: Cash dividends were not paid by the Trust in the two months ended December 31, 2018 and the two months ended December 31, 2017 as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
+Added: Due primarily to a decrease in the weighted-average British Pounds Sterling in the Trust, the Sponsor’s fee decreased from $567,982 for the year ended December 31, 2019 to $536,621 for the year ended December 31, 2020.
+Added: The only expense of the Trust during the years ended December 31, 2020 and December 31, 2019 was the Sponsor’s fee.
+Added: The Trust’s net comprehensive income (loss) for the year ended December 31, 2020 was $(431,088), due to the Sponsor’s fee of $536,621 exceeding interest income of $105,533.
+Added: The Trust’s net comprehensive income (loss) for the year ended December 31, 2019 was $(70,086), due to the Sponsor’s fee of $567,982 exceeding interest income of $497,896.
+Added: Cash dividends were not paid by the Trust in the years ended December 31, 2020 and December 31, 2019, as the Trust’s interest income did not exceed the Trust’s expenses during those periods.
Critical Accounting Policies
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.