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What changed in Invesco CurrencyShares Swiss Franc Trust's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Invesco CurrencyShares Swiss Franc Trust's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+33 added−30 removedSource: 10-K (2024-02-23) vs 10-K (2023-02-24)

Top changes in Invesco CurrencyShares Swiss Franc Trust's 2023 10-K

33 paragraphs added · 30 removed · 21 edited across 4 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeConsequently, the price of the Swiss Franc could decline, which would adversely affect an investment in the Shares. REGULATORY MATTERS Changes to United States tariff and trade policies may increase the volatility of foreign exchange rates. This volatility could materially and adversely affect the performance of the Shares.
Biggest changeREGULATORY MATTERS Changes to United States tariff and trade policies may increase the volatility of foreign exchange rates. This volatility could materially and adversely affect the performance of the Shares. There have been ongoing discussions and commentary regarding potential significant changes to United States trade policies, treaties and tariffs.
All other investors that desire to purchase or sell Shares must do so through NYSE Arca or in other markets, if any, in which the Shares are traded. 5 INSOLVENCY OR TERMINATION OF THE DEPOSITORY OR TRUST If the Depository becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant.
All other investors that desire to purchase or sell Shares must do so through NYSE Arca or in other markets, if any, in which the Shares are traded. INSOLVENCY OR TERMINATION OF THE DEPOSITORY OR TRUST If the Depository becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant.
In addition, a service provider that has experienced a cyber security incident may divert resources normally devoted to servicing the Trust to addressing the incident, which would be likely to have an adverse effect on the Trust’s operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
In addition, a service provider that has experienced a cyber security incident may divert resources normally devoted to servicing the Trust to addressing the incident, which would be likely to have an adverse effect on the Trust’s operations. 8 ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
The Trustee will reject a redemption order if the order is not in proper form as described in the Participant Agreement or if the fulfillment of the order, in the opinion of its counsel, might be unlawful. Any such rejection could adversely affect a redeeming Shareholder.
Redemption orders are subject to rejection by the Trustee under certain circumstances. The Trustee will reject a redemption order if the order is not in proper form as described in the Participant Agreement or if the fulfillment of the order, in the opinion of its counsel, might be unlawful. Any such rejection could adversely affect a redeeming Shareholder.
Further, under U.S. law, in the case of the insolvency of JPMorgan Chase Bank, N.A., the claims of creditors in respect of accounts (such as the Trust’s Deposit Accounts) that are maintained with an overseas branch of JPMorgan Chase Bank, N.A. or with a local cash correspondent will be subordinate to claims of creditors in respect of accounts maintained with JPMorgan Chase Bank, N.A. in the U.S., greatly increasing the risk that the Trust and the Trust’s beneficiaries would suffer a loss.
Further, under U.S. law, in the case of the insolvency of JPMorgan Chase Bank, N.A., the claims of creditors in respect of accounts (such as the Trust’s Deposit Accounts) that are maintained with an overseas branch of JPMorgan Chase Bank, N.A. or with a local cash correspondent will be subordinate to claims of creditors in respect of accounts maintained with JPMorgan Chase Bank, N.A. in the U.S., greatly increasing the risk that the Trust and the Trust’s beneficiaries would suffer a loss. 6 The License Agreement with The Bank of New York Mellon may be terminated by The Bank of New York Mellon in the event of a material breach.
Any amendment that increases fees or charges (other than taxes and other governmental charges, registration fees or other expenses), or that otherwise prejudices any substantial existing rights of Shareholders, will not become effective until 30 days after written notice is given to Shareholders.
Any amendment that increases fees or charges (other than taxes and other governmental charges, registration fees or other expenses), or that otherwise prejudices any substantial existing rights of Shareholders, will not become effective until 30 days after written notice is given to Shareholders. 7 OTHER RISKS Due to the increased use of technologies, intentional and unintentional cyber attacks pose operational and information security risks.
If directed by the Sponsor, the Trustee must terminate the Depository. Such a termination might result, for example, if the Sponsor determines that the interest rate paid by the Depository is inadequate.
If directed by the Sponsor, the Trustee must terminate the Depository. Such a termination might result, for example, if the Sponsor determines that the interest rate paid by the Depository is inadequate. In the event that the Depository was to resign or be removed, the Trust will be terminated.
Neither the Shares nor the Deposit Accounts and the Swiss Francs deposited in them are deposits insured against loss by the FDIC, any other federal agency of the United States or the Financial Services Compensation Scheme of England.
Neither the Shares nor the Deposit Accounts and the Swiss Francs deposited in them are deposits insured against loss by the FDIC, any other federal agency of the United States or the Financial Services Compensation Scheme of England. 5 Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940.
The License Agreement with The Bank of New York Mellon may be terminated by The Bank of New York Mellon in the event of a material breach. Termination of the License Agreement might lead to early termination and liquidation of the Trust.
Termination of the License Agreement might lead to early termination and liquidation of the Trust.
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There have been ongoing discussions and commentary regarding potential significant changes to United States trade policies, treaties and tariffs.
Added
Consequently, the price of the Swiss Franc could decline, which would adversely affect an investment in the Shares. International Armed Conflicts May Result in Volatility in Currency Prices that Could Adversely Affect the Fund's Performance.
Removed
Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940.
Added
As a result of increasingly interconnected global economies and financial markets, armed conflict between countries or in a geographic region, for example the current conflicts between Russia and Ukraine in Europe and Hamas and Israel in the Middle East, may impact the value of the currencies held by the Fund.
Removed
In the event that the Depository was to resign or be removed, the Trust will be terminated. 6 Redemption orders are subject to rejection by the Trustee under certain circumstances.
Added
Such conflicts, and other corresponding events, have had, and could continue to have, severe effects on regional and global economic and financial markets, including increased volatility, reduced liquidity, and overall uncertainty. Pandemics and other public health emergencies could disrupt the global economy and adversely impact the Trust's performance.
Removed
COVID-19 PANDEMIC The ongoing COVID-19 pandemic continues to impact the global, regional and national economies in unexpected, and unpredictable ways that could materially and adversely affect the value of the Shares.
Added
The impact of the COVID-19 pandemic was extensive in many aspects of society. The outbreak resulted in a significant number of deaths, adversely impacted global commercial activity, and led to significant uncertainty and disruptions in the global economy and financial markets.
Removed
The ongoing COVID-19 pandemic continues to have material adverse effects on the global economy and has increased economic uncertainty and financial market volatility and caused a decline in consumer and business confidence.
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Many countries reacted by instituting quarantines, prohibitions on travel and the closure of offices, businesses, schools, retail stores and other public venues. Businesses also implemented similar precautionary measures. While restrictions have eased, it is possible that they may be reinstated in the future in response to new variants or new public health emergencies.
Removed
No assurance can be given that the disruption will end soon or that the value of the Shares will not be affected materially and adversely by the pandemic and its ongoing global economic impact.
Added
Such measures, as well as the general uncertainty surrounding the dangers and impact of a future public health crisis, may result in significant disruption in supply chains and economic activity. Consumer, corporate and financial confidence may be materially adversely affected by a future outbreak. Such erosion of confidence may lead to or extend to a localized or global economic downturn.
Removed
Escalation or prolonged continuation of the pandemic could exacerbate other risk factors identified in this Report and materially and adversely affect the value of the Shares. 7 OTHER RISKS Due to the increased use of technologies, intentional and unintentional cyber attacks pose operational and information security risks.
Added
Future pandemics and other public health emergencies could exacerbate political, social, and economic risks and result in significant breakdowns, delays, and other disruptions to the economy, with potential corresponding results on the value of the currency held by the Trust, which may adversely affect an investment in the Shares.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) Not applicable (c) Although the Trust did not redeem Shares directly from its shareholders, the Trust redeemed Baskets from Authorized Participants during the three months ended December 31, 2022 as follows: Period of Redemption Total Number of Shares Redeemed Average Price Paid per Share October 1, 2022 to October 31, 2022 250,000 $ 90.29 November 1, 2022 to November 30, 2022 450,000 $ 92.74 December 1, 2022 to December 31, 2022 100,000 $ 95.83 Total 800,000 $ 92.36 ITEM 6.
Biggest change(b) Not applicable (c) Although the Trust did not redeem Shares directly from its shareholders, the Trust redeemed Baskets from Authorized Participants during the three months ended December 31, 2023 as follows: Period of Redemption Total Number of Shares Redeemed Average Price Paid per Share October 1, 2023 to October 31, 2023 — $ — November 1, 2023 to November 30, 2023 150,000 $ 100.51 December 1, 2023 to December 31, 2023 100,000 $ 102.57 Total 250,000 $ 101.33 ITEM 6.
Holders As of January 31, 2023, the Trust had 80 holders of record of its Shares. Sales of Unregistered Securities and Use of Proceeds of Registered Securities (a) There have been no unregistered sales of the Shares. No Shares are authorized for issuance by the Trust under equity compensation plans.
Holders As of January 31, 2024, the Trust had 78 holders of record of its Shares. Sales of Unregistered Securities and Use of Proceeds of Registered Securities (a) There have been no unregistered sales of the Shares. No Shares are authorized for issuance by the Trust under equity compensation plans.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe Trust did not pay any distributions during the quarter ended December 31, 2022. Results of Operations During the years ended December 31, 2022 and 2021, the Trust’s net comprehensive income (loss) was, in part, impacted by market volatility and uncertainty caused by the novel coronavirus known as COVID-19, which is considered to be an unusual or infrequent event.
Biggest changeFXF Distribution History Date Value NAV Yield Annualized Yield 10/2/2023 $ 0.00179 97.26 0.00 % (a) 0.02 % 11/1/2023 $ 0.00887 97.78 0.01 % 0.11 % 12/1/2023 $ 0.00892 102.33 0.01 % 0.11 % (a) Amount rounds to 0.00 Results of Operations During the years ended December 31, 2023 and 2022, the Trust's net comprehensive income (loss) was, in part, impacted by market volatility resulting from the US banking sector turmoil, ambiguity around the Federal Reserve's tightening cycle, and rising geopolitical concerns from the conflict in the Middle East, for 2023, and uncertainty caused by the novel coronavirus known as COVID-19, as well as the Russia-Ukraine conflict, for 2022, which are considered to be unusual or infrequent events.
In addition to the description below, please refer to Note 3 to the financial statements for further discussion of our accounting policies. The functional currency of the Trust is the Swiss Franc in accordance with ASC 830, Foreign Currency Translation.
In addition to the description below, please refer to Note 3 to the financial statements for further discussion of our accounting policies. The functional currency of the Trust is the Swiss Franc in accordance with ASC 830, Foreign Currency Translation. 14
The chart illustrates movements in the price of the Swiss Franc in USD and is based on the Closing Spot Rate: 10 NAV per Share; Valuation of the Swiss Franc The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the “bid” and “ask” midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 Swiss Francs: Liquidity and Capital Resources The Trust does not have any material cash requirements as of the end of the latest fiscal period.
The chart illustrates movements in the price of the Swiss Franc in USD and is based on the Closing Spot Rate: 12 NAV per Share; Valuation of the Swiss Franc The following chart illustrates the movement in the price of the Shares based on (1) NAV per Share, (2) the “bid” and “ask” midpoint offered on NYSE Arca and (3) the Closing Spot Rate, expressed as a multiple of 100 Swiss Francs: Liquidity and Capital Resources The Trust does not have any material cash requirements as of the end of the latest fiscal period.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction 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, 2022, and its results of operations for the fiscal years ended December 31, 2022 and December 31, 2021.
Introduction 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, 2023, and its results of operations for the fiscal years ended December 31, 2023 and December 31, 2022.
The interest rate in effect as of December 31, 2022 was an annual nominal rate of 0.00%. The following chart provides the daily rate paid by the Depository since December 31, 2017: 11 In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust.
The interest rate in effect as of December 31, 2023 was an annual nominal rate of 0.50%. The following chart provides the daily rate paid by the Depository since December 31, 2018: 13 In exchange for a fee, the Sponsor bears most of the expenses incurred by the Trust.
Although the full and direct impact of COVID-19 on the Trust’s net comprehensive income (loss) during the years ended December 31, 2022 and 2021 cannot be known, it is believed that COVID-19 has impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.
Although the full and direct impact of the COVID-19 pandemic, the Russia-Ukraine conflict, the US banking sector turmoil, and the Israel-Gaza conflict on the Trust's net comprehensive income (loss) during the years ended December 31, 2023 and 2022 cannot be known, it is believed that they have each independently impacted the Closing Spot Rate, the interest rate paid by the Depository, and the global economy and markets generally, including the number of Shares created and redeemed by the Trust.
Additionally, the interest rate paid by the Depository has generally trended downward over the past several years to the current interest rate of 0.00%, as set forth in the FXF Rate Chart above. As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.
As long as the Sponsor’s fee and the interest expense on currency deposits, if any, exceed interest income, the Trust will incur a net comprehensive loss.
However, prices did rebound quite significantly in Q4 as the dollar weakened on expectations for a dovish pivot in Fed policies. Contrary to 2020, 2021 was a negative year for the Swiss Franc (CHF/USD). As the value of the U.S.
However, prices did rebound quite significantly in the fourth quarter as the dollar weakened on expectations for a dovish pivot in Fed policies. Additionally, the interest rate paid by the Depository has generally trended upward over the past year from zero to the current interest rate of 0.50%, as set forth in the FXF Rate Chart above.
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Dollar strengthened throughout 2021, supported in part by an increasingly hawkish Fed, and the global economy continued to recover, demand for the Swiss Franc gradually subsided.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Removed
Concerns over possible ‘stagflation’ continued to support the Swiss Franc due to the Swiss National Bank’s strict inflation mandates; however, this support ultimately failed to provide a significant increase to the value of the Swiss Franc.
Added
The Swiss Franc (CHF/USD) posted a large gain in 2023, with the pair ending the year at its highest since Jan 2015. Price action was largely driven by dollar moves and Swiss central bank policies. The USD fell sharply in January, helping the pair rally, as speculation for a dovish pivot in Fed rate hike plans grew.
Added
However, with the dollar making a turnaround in February due to signs of a strong labor market and resilient inflation in the US, the currency pair depreciated. In March though, the pair returned to positive territory as the US dollar once again weakened amid the turmoil in the US banking sector.
Added
While the second quarter was largely the same theme, with the CHF bouncing back and forth on Fed-driven dollar moves, the pair also received support from rising safe haven demand.
Added
The third quarter marked a negative period for the Swiss franc as the SNB turned increasingly dovish, especially when compared with the US Fed, which held on to its higher for longer guidance. However, returning dollar weakness in the fourth quarter and efforts by the SNB to boost its currency value and dampen inflation, helped the pair soar.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Except as described above with respect to fluctuations in the Swiss Franc/USD exchange rate and changes in the nominal annual interest rate paid by the Depository on Swiss Francs held by the Trust, the Trust is not subject to market risk.
Biggest changeITEM 7A. QU ANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . Except as described above with respect to fluctuations in the Swiss Franc/USD exchange rate and changes in the nominal annual interest rate paid by the Depository on Swiss Francs held by the Trust, the Trust is not subject to market risk.
The Trust does not hold securities and does not invest in derivative instruments. 12
The Trust does not hold securities and does not invest in derivative instruments. 15

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