E. Foreign
Currency Translation —
The books and records of the Funds are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S.
dollars at the prevailing exchange rates of such currencies against the U.S.
dollar. The market value of investment securities and other assets and
liabilities are translated at the exchange rate as of the valuation date.
Purchases and sales of investment securities, income and expenses are translated
at the exchange rate prevailing on the respective dates of such
transactions.
The
Funds do not isolate the effect of changes in foreign exchange rates from
changes in market prices on securities held. Accordingly, such changes
are included
within Change in net unrealized appreciation/depreciation on investments in
non-affiliates on the Statements of Operations.
Reported
realized foreign currency gains and losses arise from the disposition of foreign
currency, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on
each Fund's books on the transaction date and the U.S. dollar equivalent of the
amounts actually received or paid. These reported realized
foreign currency gains and losses are included in Net realized gain (loss) on
foreign currency transactions on the Statements of Operations. Unrealized
foreign currency gains and losses arise from changes (due to changes in exchange
rates) in the value of foreign currency and other assets and
liabilities denominated in foreign currencies, which are held at period end and
are included in Change in net unrealized appreciation/depreciation on foreign
currency translations on the Statements of Operations.
F. Security
Transactions and Investment Income —
Investment transactions are accounted for on the trade date (the date the order
to buy or sell is executed).
Securities gains and losses are calculated on a specifically identified cost
basis.
Dividend
income, net of foreign taxes withheld, if any, is recorded on the ex-dividend
date or when a Fund first learns of the dividend.
To the extent
such information is publicly available, the Funds record distributions received
in excess of income earned from underlying investments as a reduction
of cost of investments and/or realized gain. Such amounts are based on estimates
if actual amounts are not available and actual amounts of
income, realized gain and return of capital may differ from the estimated
amounts. The Funds adjust the estimated amounts of the components of
distributions (and consequently their net investment income) as necessary, once
the issuers provide information about the actual composition of
the distributions.
G. Federal
Income Taxes — Each Fund
is treated as a separate taxable entity for Federal income tax purposes.
Each Fund's policy is to comply with the provisions
of the Internal Revenue Code (the “Code”) applicable to regulated investment
companies and to distribute to shareholders all of its distributable
net investment income and net realized capital gains on investments.
Accordingly, no provision for Federal income tax is necessary. Management has
reviewed the Funds' tax positions for all open tax years and has determined that
as of April 30, 2023, no liability for Federal income tax is
required in the Funds' financial statements for net unrecognized tax benefits.
However, management’s conclusions may be subject to future review
based on changes in, or the interpretation of, the accounting standards or tax
laws and regulations. Each Fund's Federal tax returns for the prior
three fiscal years, or since inception if shorter, remain subject to examination
by the Internal Revenue Service.
H. Foreign
Taxes —The
Funds may be subject to foreign taxes on income, gains on investments or
currency purchases/repatriation, a portion of which may be
recoverable. The Funds will accrue such taxes and recoveries as applicable,
based upon their current interpretation of tax rules and regulations
that exist in the markets in which they invest. When a capital gains tax is
determined to apply, the Funds record an estimated deferred tax liability
in an amount that would be payable if the securities were disposed of on the
valuation date.
I. Distributions
to Shareholders —
Distributions from net investment income, if any, are generally
declared and paid at least annually. Net realized
capital gains, if any, are distributed by each Fund at least annually. The
amount of distributions from net investment income and net realized capital gains
is determined in accordance with Federal income tax regulations, which may
differ from GAAP. To the extent these “book/tax” differences are permanent
in nature (i.e., that they result from other than timing of recognition —
“temporary differences”), such amounts are reclassified within the
capital accounts based on their Federal tax basis treatment.
3. Fees
and Other Transactions with Affiliates
A. Management
Fee—
JPMIM manages the investments of each Fund pursuant to a Management Agreement.
For such services, JPMIM is paid a fee which is
accrued daily and paid no more frequently than monthly based on each Fund's
respective average daily net assets at the following rate:
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Climate
Change Solutions ETF |
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Sustainable
Consumption ETF |
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Sustainable
Infrastructure ETF |
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Under each
Management Agreement, JPMIM is responsible for substantially all expenses of
each Fund, (including expenses of the Trust relating to each Fund),
except for the management fees, payments under the Funds' 12b-1 plan (if any),
interest expenses, dividend and interest expenses related to
short sales, taxes, acquired fund fees and expenses (other than fees for funds
advised by the Adviser and/or its affiliates), costs of holding shareholder
meetings, and litigation and potential litigation and other extraordinary
expenses not incurred in the ordinary course of each Fund’s business.
Additionally, each Fund is responsible for its non-operating expenses, including
brokerage commissions and fees and expenses associated with each
Fund’s securities lending program, if applicable. For the avoidance of doubt,
the Adviser’s payment of such expenses may be accomplished through a
Fund’s payment of such expenses and a corresponding reduction in the fee payable
to the Adviser, provided, however, that if the amount of expenses
paid by a Fund exceeds the fee payable to the Adviser, the Adviser will
reimburse that Fund for such amount.
