As filed with the Securities and Exchange Commission
on December 1, 2023
Registration No. 333-274057
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. ______
[X] Post-Effective Amendment No. _2 _
Fidelity Covington Trust
(Exact Name of Registrant as Specified in Charter)
Registrants Telephone Number: 617-563-7000
245 Summer Street, Boston, Massachusetts 02210
(Address of Principal Executive Offices)
Margaret Carey, Secretary and Chief Legal Officer 245 Summer Street Boston, Massachusetts 02210 (Name and Address of Agent for Service) EXPLANATORY NOTE |
This Post-Effective Amendment is being filed solely to file as an exhibit the final opinion of Dechert LLP supporting the tax consequences of the reorganization (Exhibit 12 to Item 16) of this Registration Statement on Form N-14. |
PART C. | OTHER INFORMATION |
Item 15. | Indemnification |
Article XI, Section 2 of the Declaration of Trust sets forth the reasonable and fair means for determining whether indemnification shall be provided to any past or present Trustee or officer. It states that the Trust shall indemnify any present or past trustee or officer to the fullest extent permitted by law against liability, and all expenses reasonably incurred by him or her in connection with any claim, action, suit or proceeding in which he or she is involved by virtue of his or her service as a trustee or officer and against any amount incurred in settlement thereof. Indemnification will not be provided to a person adjudged by a court or other adjudicatory body to be liable to the Trust or its shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of his or her duties (collectively, disabling conduct), or not to have acted in good faith in the reasonable belief that his or her action was in the best interest of the Trust. In the event of a settlement, no indemnification may be provided unless there has been a determination, as specified in the Declaration of Trust, that the officer or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Trust agrees to indemnify and hold harmless the Distributor and each of its directors and officers and each person, if any, who controls the Distributor within the meaning of Section 15 of the 1933 Act against any loss, liability, claim, damages or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damages, or expense and reasonable counsel fees incurred in connection therewith) arising by reason of any person acquiring any shares, based upon the ground that the registration statement, Prospectus, Statement of Additional Information, shareholder reports or other information filed or made public by the Trust (as from time to time amended) included an untrue statement of a material fact or omitted to state a material fact required to be stated or necessary in order to make the statements not misleading under the 1933 Act, or any other statute or the common law. However, the Trust does not agree to indemnify the Distributor or hold it harmless to the extent that the statement or omission was made in reliance upon, and in conformity with, information furnished to the Trust by or on behalf of the Distributor. In no case is the indemnity of the Trust in favor of the Distributor or any person indemnified to be deemed to protect the Distributor or any person against any liability to the Issuer or its security holders to which the Distributor or such person would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
Item 16. | Exhibits |
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(5) |
| Articles III, VIII, X, and XI of the Amended and Restated Declaration of Trust, dated July 16, 2013, incorporated herein by reference to Exhibit (a) of Post-Effective Amendment No. 9; and Articles IV and V of the Bylaws of the Trust, as amended and dated June 17, 2004, incorporated herein by reference to Exhibit (b) of Fidelity Summer Street Trusts (File No. 002-58542) Post-Effective Amendment No. 63. | ||
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(12) |
| Opinion and Consent of counsel Dechert LLP, as to tax matters is filed herein as Exhibit 12. | ||
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| Not applicable. | ||
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(14) |
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(15) |
| Not applicable. | ||
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| Power of Attorney, dated July 1, 2023, is filed herein as Exhibit 16. | ||
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| Not applicable. |
Item 17. | Undertakings |
(1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of the prospectus which is a part of this Registration Statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering prospectus will contain the information called for by the applicable registration form for reoffering by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each Post-Effective Amendment shall be deemed to be a new Registration Statement for the securities offered therein, and the offering of securities at that time shall be deemed to be the initial bona fide offering of them.
(3) The undersigned Registrant undertakes to file a post-effective amendment to this registration statement upon the closing of the Reorganization described in this Registration Statement that contains an opinion of counsel supporting the tax matters discussed in this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for the effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, and Commonwealth of Massachusetts, on the 1st day of December 2023.
| Fidelity Covington Trust | ||
| By | /s/Stacie M. Smith |
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Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
(Signature) |
| (Title) | (Date) |
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/s/Stacie M. Smith |
| President and Treasurer | December 1, 2023 |
Stacie M. Smith |
| (Principal Executive Officer) |
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/s/ John J. Burke III |
| Chief Financial Officer | December 1, 2023 |
John J. Burke III |
| (Principal Financial Officer) |
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/s/Thomas P. Bostick | * | Trustee | December 1, 2023 |
Thomas P. Bostick |
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/s/Dennis J. Dirks | * | Trustee | December 1, 2023 |
Dennis J. Dirks |
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/s/Donald F. Donahue | * | Trustee | December 1, 2023 |
Donald F. Donahue |
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/s/Bettina Doulton | * | Trustee | December 1, 2023 |
Bettina Doulton |
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/s/Vicki L. Fuller | * | Trustee | December 1, 2023 |
Vicki L. Fuller |
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/s/Patricia L. Kampling | * | Trustee | December 1, 2023 |
Patricia L. Kampling |
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/s/Thomas Kennedy | * | Trustee | December 1, 2023 |
Thomas Kennedy |
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/s/Robert A. Lawrence | * | Trustee | December 1, 2023 |
Robert A. Lawrence |
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/s/Oscar Munoz | * | Trustee | December 1, 2023 |
Oscar Munoz |
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/s/David M. Thomas | * | Trustee | December 1, 2023 |
David M. Thomas |
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/s/Susan Tomasky | * | Trustee | December 1, 2023 |
Susan Tomasky |
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/s/Michael E. Wiley | * | Trustee | December 1, 2023 |
Michael E. Wiley |
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* | By: | /s/Megan C. Johnson |
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| Megan C. Johnson, pursuant to a power of attorney dated July 1, 2023, and filed herewith. |
November 17, 2023
Board of Trustees Fidelity International Enhanced Index Fund a series of Fidelity Commonwealth Trust II |
Board of Trustees Fidelity Enhanced International ETF a series of Fidelity Covington Trust |
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Dear Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax consequences to Fidelity International Enhanced Index Fund (the Acquired Fund), a separate series of Fidelity Commonwealth Trust II, a Delaware statutory trust (the Acquired Fund Trust), and Fidelity Enhanced International ETF (the Acquiring Fund), a separate series of Fidelity Covington Trust, a Massachusetts business trust (the Acquiring Fund Trust), and to the holders of shares of beneficial interest in the Acquired Fund, in connection with the transfer of all of the assets, as defined in paragraph 3(b) of the Agreement and Plan of Reorganization and Liquidation (the Plan) dated as of June 14, 2023, executed by the Acquiring Fund Trust on behalf of the Acquiring Fund and the Acquired Fund Trust on behalf of the Acquired Fund, of the Acquired Fund to the Acquiring Fund in exchange solely for voting shares of beneficial interest of the Acquiring Fund (the Acquiring Fund Shares) and the assumption of all of the Acquired Funds liabilities as defined in paragraph 3(c) of the Plan by the Acquiring Fund, followed by the distribution of the Acquiring Fund Shares received by the Acquired Fund and cash in lieu of fractional shares in complete liquidation and termination of the Acquired Fund (the Reorganization), all pursuant to the Plan.
For purposes of this opinion, we have examined and relied upon (1) the Plan, (2) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquiring Fund Trust on behalf of the Acquiring Fund, (3) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquired Fund Trust on behalf of the Acquired Fund, and (4) such other documents and instruments as we have deemed necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations, judicial decisions, and administrative rulings and pronouncements of the Internal Revenue Service, all as in effect on the date hereof. This opinion is conditioned upon the Reorganization taking place in the manner described in the Plan.
Based upon the foregoing, it is our opinion that for federal income tax purposes, with respect to the Acquired Fund and the Acquiring Fund:
1.
The acquisition by the Acquiring Fund of all of the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund by the Acquiring Fund followed by the distribution of the Acquiring Fund Shares and cash in lieu of fractional shares to the Acquired Fund shareholders in exchange for their Acquired Fund shares in complete liquidation and termination of the Acquired Fund will constitute a tax-free reorganization under Section 368(a)(1)(F) of the Code.
2.
The Acquired Fund will not recognize gain or loss upon the transfer of substantially all of its assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
3.
The Acquired Fund will not recognize gain or loss upon the distribution to its shareholders of the Acquiring Fund Shares received by the Acquired Fund in the Reorganization.
4.
The Acquiring Fund will recognize no gain or loss upon receiving the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
5.
The adjusted basis to the Acquiring Fund of the properties of the Acquired Fund received by the Acquiring Fund in the Reorganization will be the same as the adjusted basis of those properties in the hands of the Acquired Fund immediately before the exchange.
6.
The Acquiring Funds holding periods with respect to the properties of the Acquired Fund that the Acquiring Fund acquires in the Reorganization will include the respective periods for which those properties were held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating a holding period with respect to an asset).
7.
The Acquired Fund shareholders will recognize no gain or loss upon receiving the Acquiring Fund Shares solely in exchange for the Acquired Fund shares (except with respect to cash received).
8.
The aggregate basis of the Acquiring Fund Shares received by an Acquired Fund shareholder in the Reorganization will be the same as the aggregate basis of the Acquired Fund shares surrendered by the Acquired Fund shareholder in exchange therefor (reduced by any amount of tax basis allocable to shares for which cash is received).
9.
An Acquired Fund shareholders holding period for the Acquiring Fund Shares received by the Acquired Fund shareholder in the Reorganization will include the holding period during which the Acquired Fund shareholder held the Acquired Fund shares surrendered in exchange therefor, provided that the Acquired Fund shareholder held such shares as a capital asset on the date of the Reorganization.
10.
The Reorganization will not result in the termination of the Acquired Funds taxable year, and the Acquired Funds tax attributes enumerated in Section 381(c) of the Code will be taken into account by the Acquiring Fund as if there had been no Reorganization.
We express no opinion as to the federal income tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except those consummated in accordance with the Plan. Without limiting the foregoing, we express no opinion as to the federal income tax consequences of the Reorganization to (1) the Acquired Fund with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code, (2) Acquired Fund shareholders whose investment is liquidated and the cash value of whose Acquired Fund shares is returned to them, (3) Acquired Fund shareholders who hold their Acquired Fund shares through an account that cannot hold the Acquiring Fund Shares at the time of the Reorganization, and (4) Acquired Fund shareholders whose Acquired Fund shares are transferred by their broker or financial intermediary to a different investment option because such shareholders did not hold their Acquired Fund shares through an account that can accept Acquiring Fund Shares on the date of the Reorganization.
Very truly yours,
/s/ Dechert LLP
November 17, 2023
Board of Trustees Fidelity Large Cap Core Enhanced Index Fund a series of Fidelity Commonwealth Trust II |
Board of Trustees Fidelity Enhanced Large Cap Core ETF a series of Fidelity Covington Trust |
|
Dear Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax consequences to Fidelity Large Cap Core Enhanced Index Fund (the Acquired Fund), a separate series of Fidelity Commonwealth Trust II, a Delaware statutory trust (the Acquired Fund Trust), and Fidelity Enhanced Large Cap Core ETF (the Acquiring Fund), a separate series of Fidelity Covington Trust, a Massachusetts business trust (the Acquiring Fund Trust), and to the holders of shares of beneficial interest in the Acquired Fund, in connection with the transfer of all of the assets, as defined in paragraph 3(b) of the Agreement and Plan of Reorganization and Liquidation (the Plan) dated as of June 14, 2023, executed by the Acquiring Fund Trust on behalf of the Acquiring Fund and the Acquired Fund Trust on behalf of the Acquired Fund, of the Acquired Fund to the Acquiring Fund in exchange solely for voting shares of beneficial interest of the Acquiring Fund (the Acquiring Fund Shares) and the assumption of all of the Acquired Funds liabilities as defined in paragraph 3(c) of the Plan by the Acquiring Fund, followed by the distribution of the Acquiring Fund Shares received by the Acquired Fund and cash in lieu of fractional shares in complete liquidation and termination of the Acquired Fund (the Reorganization), all pursuant to the Plan.
For purposes of this opinion, we have examined and relied upon (1) the Plan, (2) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquiring Fund Trust on behalf of the Acquiring Fund, (3) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquired Fund Trust on behalf of the Acquired Fund, and (4) such other documents and instruments as we have deemed necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations, judicial decisions, and administrative rulings and pronouncements of the Internal Revenue Service, all as in effect on the date hereof. This opinion is conditioned upon the Reorganization taking place in the manner described in the Plan.
Based upon the foregoing, it is our opinion that for federal income tax purposes, with respect to the Acquired Fund and the Acquiring Fund:
1.
The acquisition by the Acquiring Fund of all of the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund by the Acquiring Fund followed by the distribution of the Acquiring Fund Shares and cash in lieu of fractional shares to the Acquired Fund shareholders in exchange for their Acquired Fund shares in complete liquidation and termination of the Acquired Fund will constitute a tax-free reorganization under Section 368(a)(1)(F) of the Code.
2.
The Acquired Fund will not recognize gain or loss upon the transfer of substantially all of its assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
3.
The Acquired Fund will not recognize gain or loss upon the distribution to its shareholders of the Acquiring Fund Shares received by the Acquired Fund in the Reorganization.
4.
The Acquiring Fund will recognize no gain or loss upon receiving the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
5.
The adjusted basis to the Acquiring Fund of the properties of the Acquired Fund received by the Acquiring Fund in the Reorganization will be the same as the adjusted basis of those properties in the hands of the Acquired Fund immediately before the exchange.
6.
The Acquiring Funds holding periods with respect to the properties of the Acquired Fund that the Acquiring Fund acquires in the Reorganization will include the respective periods for which those properties were held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating a holding period with respect to an asset).
7.
The Acquired Fund shareholders will recognize no gain or loss upon receiving the Acquiring Fund Shares solely in exchange for the Acquired Fund shares (except with respect to cash received).
8.
The aggregate basis of the Acquiring Fund Shares received by an Acquired Fund shareholder in the Reorganization will be the same as the aggregate basis of the Acquired Fund shares surrendered by the Acquired Fund shareholder in exchange therefor (reduced by any amount of tax basis allocable to shares for which cash is received).
9.
An Acquired Fund shareholders holding period for the Acquiring Fund Shares received by the Acquired Fund shareholder in the Reorganization will include the holding period during which the Acquired Fund shareholder held the Acquired Fund shares surrendered in exchange therefor, provided that the Acquired Fund shareholder held such shares as a capital asset on the date of the Reorganization.
10.
The Reorganization will not result in the termination of the Acquired Funds taxable year, and the Acquired Funds tax attributes enumerated in Section 381(c) of the Code will be taken into account by the Acquiring Fund as if there had been no Reorganization.
We express no opinion as to the federal income tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except those consummated in accordance with the Plan. Without limiting the foregoing, we express no opinion as to the federal income tax consequences of the Reorganization to (1) the Acquired Fund with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code, (2) Acquired Fund shareholders whose investment is liquidated and the cash value of whose Acquired Fund shares is returned to them, (3) Acquired Fund shareholders who hold their Acquired Fund shares through an account that cannot hold the Acquiring Fund Shares at the time of the Reorganization, and (4) Acquired Fund shareholders whose Acquired Fund shares are transferred by their broker or financial intermediary to a different investment option because such shareholders did not hold their Acquired Fund shares through an account that can accept Acquiring Fund Shares on the date of the Reorganization.
Very truly yours,
/s/ Dechert LLP
November 17, 2023
Board of Trustees Fidelity Large Cap Growth Enhanced Index Fund a series of Fidelity Commonwealth Trust II |
Board of Trustees Fidelity Enhanced Large Cap Growth ETF a series of Fidelity Covington Trust |
|
Dear Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax consequences to Fidelity Large Cap Growth Enhanced Index Fund (the Acquired Fund), a separate series of Fidelity Commonwealth Trust II, a Delaware statutory trust (the Acquired Fund Trust), and Fidelity Enhanced Large Cap Growth ETF (the Acquiring Fund), a separate series of Fidelity Covington Trust, a Massachusetts business trust (the Acquiring Fund Trust), and to the holders of shares of beneficial interest in the Acquired Fund, in connection with the transfer of all of the assets, as defined in paragraph 3(b) of the Agreement and Plan of Reorganization and Liquidation (the Plan) dated as of June 14, 2023, executed by the Acquiring Fund Trust on behalf of the Acquiring Fund and the Acquired Fund Trust on behalf of the Acquired Fund, of the Acquired Fund to the Acquiring Fund in exchange solely for voting shares of beneficial interest of the Acquiring Fund (the Acquiring Fund Shares) and the assumption of all of the Acquired Funds liabilities as defined in paragraph 3(c) of the Plan by the Acquiring Fund, followed by the distribution of the Acquiring Fund Shares received by the Acquired Fund and cash in lieu of fractional shares in complete liquidation and termination of the Acquired Fund (the Reorganization), all pursuant to the Plan.
For purposes of this opinion, we have examined and relied upon (1) the Plan, (2) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquiring Fund Trust on behalf of the Acquiring Fund, (3) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquired Fund Trust on behalf of the Acquired Fund, and (4) such other documents and instruments as we have deemed necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations, judicial decisions, and administrative rulings and pronouncements of the Internal Revenue Service, all as in effect on the date hereof. This opinion is conditioned upon the Reorganization taking place in the manner described in the Plan.
Based upon the foregoing, it is our opinion that for federal income tax purposes, with respect to the Acquired Fund and the Acquiring Fund:
1.
The acquisition by the Acquiring Fund of all of the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund by the Acquiring Fund followed by the distribution of the Acquiring Fund Shares and cash in lieu of fractional shares to the Acquired Fund shareholders in exchange for their Acquired Fund shares in complete liquidation and termination of the Acquired Fund will constitute a tax-free reorganization under Section 368(a)(1)(F) of the Code.
2.
The Acquired Fund will not recognize gain or loss upon the transfer of substantially all of its assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
3.
The Acquired Fund will not recognize gain or loss upon the distribution to its shareholders of the Acquiring Fund Shares received by the Acquired Fund in the Reorganization.
4.
The Acquiring Fund will recognize no gain or loss upon receiving the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
5.
The adjusted basis to the Acquiring Fund of the properties of the Acquired Fund received by the Acquiring Fund in the Reorganization will be the same as the adjusted basis of those properties in the hands of the Acquired Fund immediately before the exchange.
6.
The Acquiring Funds holding periods with respect to the properties of the Acquired Fund that the Acquiring Fund acquires in the Reorganization will include the respective periods for which those properties were held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating a holding period with respect to an asset).
7.
The Acquired Fund shareholders will recognize no gain or loss upon receiving the Acquiring Fund Shares solely in exchange for the Acquired Fund shares (except with respect to cash received).
8.
The aggregate basis of the Acquiring Fund Shares received by an Acquired Fund shareholder in the Reorganization will be the same as the aggregate basis of the Acquired Fund shares surrendered by the Acquired Fund shareholder in exchange therefor (reduced by any amount of tax basis allocable to shares for which cash is received).
9.
An Acquired Fund shareholders holding period for the Acquiring Fund Shares received by the Acquired Fund shareholder in the Reorganization will include the holding period during which the Acquired Fund shareholder held the Acquired Fund shares surrendered in exchange therefor, provided that the Acquired Fund shareholder held such shares as a capital asset on the date of the Reorganization.
10.
The Reorganization will not result in the termination of the Acquired Funds taxable year, and the Acquired Funds tax attributes enumerated in Section 381(c) of the Code will be taken into account by the Acquiring Fund as if there had been no Reorganization.
We express no opinion as to the federal income tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except those consummated in accordance with the Plan. Without limiting the foregoing, we express no opinion as to the federal income tax consequences of the Reorganization to (1) the Acquired Fund with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code, (2) Acquired Fund shareholders whose investment is liquidated and the cash value of whose Acquired Fund shares is returned to them, (3) Acquired Fund shareholders who hold their Acquired Fund shares through an account that cannot hold the Acquiring Fund Shares at the time of the Reorganization, and (4) Acquired Fund shareholders whose Acquired Fund shares are transferred by their broker or financial intermediary to a different investment option because such shareholders did not hold their Acquired Fund shares through an account that can accept Acquiring Fund Shares on the date of the Reorganization.
Very truly yours,
/s/ Dechert LLP
November 17, 2023
Board of Trustees Fidelity Large Cap Value Enhanced Index Fund a series of Fidelity Commonwealth Trust II |
Board of Trustees Fidelity Enhanced Large Cap Value ETF a series of Fidelity Covington Trust |
|
Dear Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax consequences to Fidelity Large Cap Value Enhanced Index Fund (the Acquired Fund), a separate series of Fidelity Commonwealth Trust II, a Delaware statutory trust (the Acquired Fund Trust), and Fidelity Enhanced Large Cap Value ETF (the Acquiring Fund), a separate series of Fidelity Covington Trust, a Massachusetts business trust (the Acquiring Fund Trust), and to the holders of shares of beneficial interest in the Acquired Fund, in connection with the transfer of all of the assets, as defined in paragraph 3(b) of the Agreement and Plan of Reorganization and Liquidation (the Plan) dated as of June 14, 2023, executed by the Acquiring Fund Trust on behalf of the Acquiring Fund and the Acquired Fund Trust on behalf of the Acquired Fund, of the Acquired Fund to the Acquiring Fund in exchange solely for voting shares of beneficial interest of the Acquiring Fund (the Acquiring Fund Shares) and the assumption of all of the Acquired Funds liabilities as defined in paragraph 3(c) of the Plan by the Acquiring Fund, followed by the distribution of the Acquiring Fund Shares received by the Acquired Fund and cash in lieu of fractional shares in complete liquidation and termination of the Acquired Fund (the Reorganization), all pursuant to the Plan.
For purposes of this opinion, we have examined and relied upon (1) the Plan, (2) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquiring Fund Trust on behalf of the Acquiring Fund, (3) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquired Fund Trust on behalf of the Acquired Fund, and (4) such other documents and instruments as we have deemed necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations, judicial decisions, and administrative rulings and pronouncements of the Internal Revenue Service, all as in effect on the date hereof. This opinion is conditioned upon the Reorganization taking place in the manner described in the Plan.
Based upon the foregoing, it is our opinion that for federal income tax purposes, with respect to the Acquired Fund and the Acquiring Fund:
1.
The acquisition by the Acquiring Fund of all of the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund by the Acquiring Fund followed by the distribution of the Acquiring Fund Shares and cash in lieu of fractional shares to the Acquired Fund shareholders in exchange for their Acquired Fund shares in complete liquidation and termination of the Acquired Fund will constitute a tax-free reorganization under Section 368(a)(1)(F) of the Code.
2.
The Acquired Fund will not recognize gain or loss upon the transfer of substantially all of its assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
3.
The Acquired Fund will not recognize gain or loss upon the distribution to its shareholders of the Acquiring Fund Shares received by the Acquired Fund in the Reorganization.
4.
The Acquiring Fund will recognize no gain or loss upon receiving the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
5.
The adjusted basis to the Acquiring Fund of the properties of the Acquired Fund received by the Acquiring Fund in the Reorganization will be the same as the adjusted basis of those properties in the hands of the Acquired Fund immediately before the exchange.
6.
The Acquiring Funds holding periods with respect to the properties of the Acquired Fund that the Acquiring Fund acquires in the Reorganization will include the respective periods for which those properties were held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating a holding period with respect to an asset).
7.
The Acquired Fund shareholders will recognize no gain or loss upon receiving the Acquiring Fund Shares solely in exchange for the Acquired Fund shares (except with respect to cash received).
8.
The aggregate basis of the Acquiring Fund Shares received by an Acquired Fund shareholder in the Reorganization will be the same as the aggregate basis of the Acquired Fund shares surrendered by the Acquired Fund shareholder in exchange therefor (reduced by any amount of tax basis allocable to shares for which cash is received).
9.
An Acquired Fund shareholders holding period for the Acquiring Fund Shares received by the Acquired Fund shareholder in the Reorganization will include the holding period during which the Acquired Fund shareholder held the Acquired Fund shares surrendered in exchange therefor, provided that the Acquired Fund shareholder held such shares as a capital asset on the date of the Reorganization.
10.
The Reorganization will not result in the termination of the Acquired Funds taxable year, and the Acquired Funds tax attributes enumerated in Section 381(c) of the Code will be taken into account by the Acquiring Fund as if there had been no Reorganization.
We express no opinion as to the federal income tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except those consummated in accordance with the Plan. Without limiting the foregoing, we express no opinion as to the federal income tax consequences of the Reorganization to (1) the Acquired Fund with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code, (2) Acquired Fund shareholders whose investment is liquidated and the cash value of whose Acquired Fund shares is returned to them, (3) Acquired Fund shareholders who hold their Acquired Fund shares through an account that cannot hold the Acquiring Fund Shares at the time of the Reorganization, and (4) Acquired Fund shareholders whose Acquired Fund shares are transferred by their broker or financial intermediary to a different investment option because such shareholders did not hold their Acquired Fund shares through an account that can accept Acquiring Fund Shares on the date of the Reorganization.
Very truly yours,
/s/ Dechert LLP
November 17, 2023
Board of Trustees Fidelity Mid Cap Enhanced Index Fund a series of Fidelity Commonwealth Trust II |
Board of Trustees Fidelity Enhanced Mid Cap ETF a series of Fidelity Covington Trust |
|
Dear Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax consequences to Fidelity Mid Cap Enhanced Index Fund (the Acquired Fund), a separate series of Fidelity Commonwealth Trust II, a Delaware statutory trust (the Acquired Fund Trust), and Fidelity Enhanced Mid Cap ETF (the Acquiring Fund), a separate series of Fidelity Covington Trust, a Massachusetts business trust (the Acquiring Fund Trust), and to the holders of shares of beneficial interest in the Acquired Fund, in connection with the transfer of all of the assets, as defined in paragraph 3(b) of the Agreement and Plan of Reorganization and Liquidation (the Plan) dated as of June 14, 2023, executed by the Acquiring Fund Trust on behalf of the Acquiring Fund and the Acquired Fund Trust on behalf of the Acquired Fund, of the Acquired Fund to the Acquiring Fund in exchange solely for voting shares of beneficial interest of the Acquiring Fund (the Acquiring Fund Shares) and the assumption of all of the Acquired Funds liabilities as defined in paragraph 3(c) of the Plan by the Acquiring Fund, followed by the distribution of the Acquiring Fund Shares received by the Acquired Fund and cash in lieu of fractional shares in complete liquidation and termination of the Acquired Fund (the Reorganization), all pursuant to the Plan.
For purposes of this opinion, we have examined and relied upon (1) the Plan, (2) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquiring Fund Trust on behalf of the Acquiring Fund, (3) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquired Fund Trust on behalf of the Acquired Fund, and (4) such other documents and instruments as we have deemed necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations, judicial decisions, and administrative rulings and pronouncements of the Internal Revenue Service, all as in effect on the date hereof. This opinion is conditioned upon the Reorganization taking place in the manner described in the Plan.
Based upon the foregoing, it is our opinion that for federal income tax purposes, with respect to the Acquired Fund and the Acquiring Fund:
1.
The acquisition by the Acquiring Fund of all of the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund by the Acquiring Fund followed by the distribution of the Acquiring Fund Shares and cash in lieu of fractional shares to the Acquired Fund shareholders in exchange for their Acquired Fund shares in complete liquidation and termination of the Acquired Fund will constitute a tax-free reorganization under Section 368(a)(1)(F) of the Code.
2.
The Acquired Fund will not recognize gain or loss upon the transfer of substantially all of its assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
3.
The Acquired Fund will not recognize gain or loss upon the distribution to its shareholders of the Acquiring Fund Shares received by the Acquired Fund in the Reorganization.
4.
The Acquiring Fund will recognize no gain or loss upon receiving the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
5.
The adjusted basis to the Acquiring Fund of the properties of the Acquired Fund received by the Acquiring Fund in the Reorganization will be the same as the adjusted basis of those properties in the hands of the Acquired Fund immediately before the exchange.
6.
The Acquiring Funds holding periods with respect to the properties of the Acquired Fund that the Acquiring Fund acquires in the Reorganization will include the respective periods for which those properties were held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating a holding period with respect to an asset).
7.
The Acquired Fund shareholders will recognize no gain or loss upon receiving the Acquiring Fund Shares solely in exchange for the Acquired Fund shares (except with respect to cash received).
8.
The aggregate basis of the Acquiring Fund Shares received by an Acquired Fund shareholder in the Reorganization will be the same as the aggregate basis of the Acquired Fund shares surrendered by the Acquired Fund shareholder in exchange therefor (reduced by any amount of tax basis allocable to shares for which cash is received).
9.
An Acquired Fund shareholders holding period for the Acquiring Fund Shares received by the Acquired Fund shareholder in the Reorganization will include the holding period during which the Acquired Fund shareholder held the Acquired Fund shares surrendered in exchange therefor, provided that the Acquired Fund shareholder held such shares as a capital asset on the date of the Reorganization.
10.
The Reorganization will not result in the termination of the Acquired Funds taxable year, and the Acquired Funds tax attributes enumerated in Section 381(c) of the Code will be taken into account by the Acquiring Fund as if there had been no Reorganization.
We express no opinion as to the federal income tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except those consummated in accordance with the Plan. Without limiting the foregoing, we express no opinion as to the federal income tax consequences of the Reorganization to (1) the Acquired Fund with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code, (2) Acquired Fund shareholders whose investment is liquidated and the cash value of whose Acquired Fund shares is returned to them, (3) Acquired Fund shareholders who hold their Acquired Fund shares through an account that cannot hold the Acquiring Fund Shares at the time of the Reorganization, and (4) Acquired Fund shareholders whose Acquired Fund shares are transferred by their broker or financial intermediary to a different investment option because such shareholders did not hold their Acquired Fund shares through an account that can accept Acquiring Fund Shares on the date of the Reorganization.
Very truly yours,
/s/ Dechert LLP
November 17, 2023
Board of Trustees Fidelity Small Cap Enhanced Index Fund a series of Fidelity Commonwealth Trust II |
Board of Trustees Fidelity Enhanced Small Cap ETF a series of Fidelity Covington Trust |
|
Dear Ladies and Gentlemen:
You have requested our opinion regarding certain federal income tax consequences to Fidelity Small Cap Enhanced Index Fund (the Acquired Fund), a separate series of Fidelity Commonwealth Trust II, a Delaware statutory trust (the Acquired Fund Trust), and Fidelity Enhanced Small Cap ETF (the Acquiring Fund), a separate series of Fidelity Covington Trust, a Massachusetts business trust (the Acquiring Fund Trust), and to the holders of shares of beneficial interest in the Acquired Fund, in connection with the transfer of all of the assets, as defined in paragraph 3(b) of the Agreement and Plan of Reorganization and Liquidation (the Plan) dated as of June 14, 2023, executed by the Acquiring Fund Trust on behalf of the Acquiring Fund and the Acquired Fund Trust on behalf of the Acquired Fund, of the Acquired Fund to the Acquiring Fund in exchange solely for voting shares of beneficial interest of the Acquiring Fund (the Acquiring Fund Shares) and the assumption of all of the Acquired Funds liabilities as defined in paragraph 3(c) of the Plan by the Acquiring Fund, followed by the distribution of the Acquiring Fund Shares received by the Acquired Fund and cash in lieu of fractional shares in complete liquidation and termination of the Acquired Fund (the Reorganization), all pursuant to the Plan.
For purposes of this opinion, we have examined and relied upon (1) the Plan, (2) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquiring Fund Trust on behalf of the Acquiring Fund, (3) the facts and representations contained in the letter dated on or about the date hereof addressed to us from the Acquired Fund Trust on behalf of the Acquired Fund, and (4) such other documents and instruments as we have deemed necessary or appropriate for purposes of rendering this opinion.
This opinion is based upon the Internal Revenue Code of 1986, as amended (the Code), United States Treasury Regulations, judicial decisions, and administrative rulings and pronouncements of the Internal Revenue Service, all as in effect on the date hereof. This opinion is conditioned upon the Reorganization taking place in the manner described in the Plan.
Based upon the foregoing, it is our opinion that for federal income tax purposes, with respect to the Acquired Fund and the Acquiring Fund:
1.
The acquisition by the Acquiring Fund of all of the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund by the Acquiring Fund followed by the distribution of the Acquiring Fund Shares and cash in lieu of fractional shares to the Acquired Fund shareholders in exchange for their Acquired Fund shares in complete liquidation and termination of the Acquired Fund will constitute a tax-free reorganization under Section 368(a)(1)(F) of the Code.
2.
The Acquired Fund will not recognize gain or loss upon the transfer of substantially all of its assets to the Acquiring Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
3.
The Acquired Fund will not recognize gain or loss upon the distribution to its shareholders of the Acquiring Fund Shares received by the Acquired Fund in the Reorganization.
4.
The Acquiring Fund will recognize no gain or loss upon receiving the properties of the Acquired Fund in exchange solely for the Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund.
5.
The adjusted basis to the Acquiring Fund of the properties of the Acquired Fund received by the Acquiring Fund in the Reorganization will be the same as the adjusted basis of those properties in the hands of the Acquired Fund immediately before the exchange.
6.
The Acquiring Funds holding periods with respect to the properties of the Acquired Fund that the Acquiring Fund acquires in the Reorganization will include the respective periods for which those properties were held by the Acquired Fund (except where investment activities of the Acquiring Fund have the effect of reducing or eliminating a holding period with respect to an asset).
7.
The Acquired Fund shareholders will recognize no gain or loss upon receiving the Acquiring Fund Shares solely in exchange for the Acquired Fund shares (except with respect to cash received).
8.
The aggregate basis of the Acquiring Fund Shares received by an Acquired Fund shareholder in the Reorganization will be the same as the aggregate basis of the Acquired Fund shares surrendered by the Acquired Fund shareholder in exchange therefor (reduced by any amount of tax basis allocable to shares for which cash is received).
9.
An Acquired Fund shareholders holding period for the Acquiring Fund Shares received by the Acquired Fund shareholder in the Reorganization will include the holding period during which the Acquired Fund shareholder held the Acquired Fund shares surrendered in exchange therefor, provided that the Acquired Fund shareholder held such shares as a capital asset on the date of the Reorganization.
10.
The Reorganization will not result in the termination of the Acquired Funds taxable year, and the Acquired Funds tax attributes enumerated in Section 381(c) of the Code will be taken into account by the Acquiring Fund as if there had been no Reorganization.
We express no opinion as to the federal income tax consequences of the Reorganization except as expressly set forth above, or as to any transaction except those consummated in accordance with the Plan. Without limiting the foregoing, we express no opinion as to the federal income tax consequences of the Reorganization to (1) the Acquired Fund with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code, (2) Acquired Fund shareholders whose investment is liquidated and the cash value of whose Acquired Fund shares is returned to them, (3) Acquired Fund shareholders who hold their Acquired Fund shares through an account that cannot hold the Acquiring Fund Shares at the time of the Reorganization, and (4) Acquired Fund shareholders whose Acquired Fund shares are transferred by their broker or financial intermediary to a different investment option because such shareholders did not hold their Acquired Fund shares through an account that can accept Acquiring Fund Shares on the date of the Reorganization.
Very truly yours,
/s/ Dechert LLP
POWER OF ATTORNEY
We, the undersigned Trustees of Fidelity Covington Trust (the Trust) hereby constitute and appoint Thomas C. Bogle, John V. OHanlon, Megan C. Johnson and Anthony H. Zacharski, each of them singly, our true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for us and in our names in the appropriate capacities, the Registration Statement of the Trust on Form N-14 under the Securities Act of 1933 relating to proposed reorganizations of Fidelity Commonwealth Trust II: Fidelity International Enhanced Index Fund into Fidelity Enhanced International ETF, Fidelity Large Cap Core Enhanced Index Fund into Fidelity Enhanced Large Cap Core ETF, Fidelity Large Cap Growth Enhanced Index Fund into Fidelity Enhanced Large Cap Growth ETF, Fidelity Large Cap Value Enhanced Index Fund into Fidelity Enhanced Large Cap Value ETF, Fidelity Mid Cap Enhanced Index Fund into Fidelity Enhanced Mid Cap ETF, and Fidelity Small Cap Enhanced Index Fund into Fidelity Enhanced Small Cap ETF, each a series of the Trust, any and all subsequent Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said Registration Statement, and any supplements or other instruments in connection therewith, and generally to do all such things in our names and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and the Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission. We hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. This power of attorney is effective for all documents filed on or after July 1, 2023.
WITNESS our hands on this first day of July 2023.
/s/Thomas P. Bostik | /s/Thomas Kennedy |
Thomas P. Bostick | Thomas Kennedy |
/s/Dennis J. Dirks | /s/Robert A. Lawrence |
Dennis J. Dirks | Robert A. Lawrence |
/s/Donald F. Donahue | /s/Oscar Munoz |
Donald F. Donahue | Oscar Munoz |
/s/Bettina Doulton | /s/David M. Thomas |
Bettina Doulton | David M. Thomas |
/s/Vicki L. Fuller | /s/Susan Tomasky |
Vicki L. Fuller | Susan Tomasky |
/s/Patricia L. Kampling | /s/Michael E. Wiley |
Patricia L. Kampling | Michael E. Wiley |