VIDENT ASSET MANAGEMENT

Vident Asset Management Form ADV Part 2A Brochure 1125 Sanctuary Pkwy. Suite 515 Alpharetta, GA 30009 Telephone: (404) 267-1501 disclosure@videntam.com www.videntam.com March 31, 2026 This brochure provides information about the qualifications and business practices of Vident Advisory, LLC (d/b/a Vident Asset Management). If you have any questions about the contents of this brochure, please contact us at (404) 267-1501 or disclosure@videntam.com. The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission (the “SEC”) or by any state securities authority. Registration of an investment adviser does not imply any certain level of skill or training. Additional information about Vident Asset Management is also available on the SEC’s website at www.adviserinfo.sec.gov. 1  ITEM 2 – MATERIAL CHANGES Form ADV Part 2A requires registered investment advisers to amend their brochure when information becomes materially inaccurate. If there are any material changes to an adviser's disclosure brochure, the adviser is required to notify you and provide you with a description of the material changes. The following material changes have been made to this brochure since its last filing on March 28, 2025: 1) Item 4 was amended to disclose that Vident now sub-advises open-end mutual funds. 2) Item 5 was amended to (i) update the fee schedules for the Corporate Laddered Bond Portfolios and standard and custom ESMA accounts, (ii) disclose that the Eventide Investment Management SMA Models will have associated fees billed in arrears, (iii) discuss that in certain circumstances, Vident may bill in arrears based on average daily balance, (iv) disclose that Vident has agreed with one TPM to manage particular investment mandates for no fee, (v) disclose that Vident will assess fees for sub-advised SMA accounts based on an account owner’s total billable “household” assets managed by Vident, and (vi) introduce the ability for ESMA to invest in foreign ordinary shares traded over-the-counter and direct local investments and discuss possible associated fees and brokerage commissions with such investments. 3) Item 10 was amended to disclose a new fee arrangement with Blue Trust, Inc., and introduce a new affiliate Vident will do business with, Innovest Portfolio Solutions, LLC. 2  ITEM 3 – TABLE OF CONTENTS ITEM 1 – COVER PAGE ITEM 2 – MATERIAL CHANGES ................................................................................................................ 2 ITEM 3 – TABLE OF CONTENTS ............................................................................................................... 3 ITEM 4 – ADVISORY BUSINESS ................................................................................................................ 4 ITEM 5 – FEES AND COMPENSATION ....................................................................................................... 7 ITEM 6 – PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT ............................................. 11 ITEM 7 – TYPES OF CLIENTS ................................................................................................................. 11 ITEM 8 – METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS ................................. 11 ITEM 9 – DISCIPLINARY INFORMATION .................................................................................................. 23 ITEM 10 – OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS ............................................... 23 ITEM 11 – CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING ............................................................................................................................................... 24 ITEM 12 – BROKERAGE PRACTICES ....................................................................................................... 25 ITEM 13 – REVIEW OF ACCOUNTS ......................................................................................................... 30 ITEM 14 – CLIENT REFERRALS AND OTHER COMPENSATION ................................................................. 30 ITEM 15 – CUSTODY ............................................................................................................................. 30 ITEM 16 – INVESTMENT DISCRETION .................................................................................................... 30 ITEM 17 – VOTING CLIENT SECURITIES ................................................................................................. 31 ITEM 18 – FINANCIAL INFORMATION ..................................................................................................... 33 ITEM 19 – REQUIREMENTS FOR STATE-REGISTERED ADVISERS ............................................................. 33 3  ITEM 4 – ADVISORY BUSINESS Vident Asset Management (“Vident”) is a Delaware limited liability company formed in December 2016. We have been registered with the SEC as an investment adviser since January 2019. Vident is owned by Vident Capital Holdings, LLC which is controlled by MM VAM, LLC. MM VAM, LLC is owned by Casey Crawford. Funds Vident serves as the investment adviser to the Vident advised ETFs, five exchange-traded funds which are series of ETF Series Solutions (“ESS”) and distributed by ALPS Distributors, Inc. (“ALPS”). Vident is not affiliated with either ESS or ALPS. Vident also serves as investment adviser to third-party bank sponsored collective investment trusts (“CITs”) which meet the exemption requirements under Section 3(c)(11) of the Investment Company Act of 1940, as amended (“1940 Act”). Vident serves as the sub-adviser for third-party exchange-traded funds registered under the 1940 Act (“ETFs”), open-end mutual funds registered under the 1940 Act (“Mutual Funds”) and pooled investment vehicles structured as Undertakings for Collective Investment in Transferable Securities (“UCITS”). Hereinafter, third-party ETFs, Mutual Funds, UCITS, CITs, and the Vident advised ETFs are collectively referred to as the “Funds”. Vident is responsible for trading portfolio securities and other investment instruments on behalf of the Funds, including selecting broker-dealers to execute purchase and sale transactions or in connection with any rebalancing or reconstitution of a Fund’s underlying investment index. Transactions are subject to the supervision of the Funds’ primary adviser or investment manager, management company, and/or board of directors (or trustees), as applicable. Funds may trade various combinations of any asset class or investment vehicle, including global equities, global fixed income, ETFs, mutual funds, money market funds, private funds, commodities, options, futures, swaps, and liquid alternatives, as permitted by an underlying benchmark, index, active investment strategy, or the offering document of the Fund. Vident does not tailor its advisory services to the individual needs of investors in the Funds. Each Fund’s offering documents set forth their respective investment strategies, guidelines, and restrictions. Prospective investors should review these documents carefully before making any investment in the Funds. Unless otherwise noted herein, this brochure will focus its discussion on the services Vident provides to separately managed accounts (“SMAs”). Separately Managed Accounts Vident provides investment advisory services to institutional SMAs, as well as sub-advisory services to SMAs via agreements with third-party managers (the “TPMs”). Vident’s advisory and sub-advisory services are tailored to the individual needs of each SMA account owner. Vident’s 4  current advisory and sub-advisory SMA mandates include equity strategy SMAs (“ESMA”) and fixed income strategy SMAs (“FISMA”). Equity Portfolios Vident manages ESMA based on an instructed investment strategy model or index determined by the TPMs and/or the SMA account owners, inclusive of any established investment guidelines and/or restrictions, capital gains tax schedules, and other requirements established by the account owners. The concept of ESMA include, when chosen by the SMA, the use of select environmental, governance, and/or social screens chosen by the SMA and as implemented by Vident utilizing third-party providers’ investment criteria screens or a TPM’s own investment screens (or otherwise collectively considered as “values-based investment” screens). Vident also sub-advises ESMA based on an instructed investment strategy selected by the TPMs and the SMA account owners, whose models are determined by an affiliated investment adviser, Sovereign’s Capital Management, LLC (“Sovereign’s”), or a second unaffiliated investment adviser. Vident is not responsible for security selection in the models, rather, Vident generally implements the investment instructions provided by the investment advisers through ongoing monitoring, rebalancing, and trading. An account owner may impose reasonable restrictions on the account. Fixed Income Portfolios Vident offers multiple FISMA strategies to account owners who desire fixed income exposure. These FISMA strategies include laddered bond portfolios (“LBP”), core fixed income strategies (“Core FI”) for both taxable and tax-efficient portfolios, and a cash allocation strategy (“Cash Allocation”). Core FI is structured to maintain similar exposures to a benchmark index or model, while LBP is a customized fixed income strategy that is individually tailored to meet the cash flow needs of each SMA account owner according to the SMA’s investment guidelines. Cash Allocation seeks to maximize yield for specific maturities to support an account owner’s cash allocation decisions. FISMA may also place investment guidelines and/or restrictions on the account. For both ESMA and FISMA, please refer to further related and important discussions below in Item 5 – Fees and Compensation and Item 8 – Methods of Analysis, Investment Strategies. Account Management Each SMA may trade various combinations of any asset class or investment vehicle, including domestic and global equities, American Depository Receipts (“ADRs”), fixed income securities, government securities, , ETFs (inclusive of the Vident advised ETFs and sub-advised ETFs and Mutual Funds), mutual funds, and money market funds. 5  As adviser, Vident will work with the SMA account owners to establish investment policy statements and/or restrictions, capital gains tax schedules, and values-based investment requirements of each SMA. Vident will monitor account performance on an ongoing basis and will make changes to the investment portfolio as required by changes in market conditions, fixed income security maturities, changes in the model portfolio selected by the SMA account owner, and/or changes in the financial circumstances of the SMA account owner. Trading activity is influenced by the frequency of rebalances, contributions, withdrawals, and fixed income security maturities (including call exercise). As sub-adviser, Vident will work with the TPMs to understand established investment guidelines and/or restrictions, capital gains tax schedules, and values-based investment requirements of each SMA. In turn, the TPMs work with their clients, the SMA account owners. Vident will monitor account performance on an ongoing basis and will make changes to the investment portfolio as required by changes in market conditions, fixed income security maturities, changes in a TPM’s investment strategy model portfolio selected by the SMA account owner, and/or changes in the financial circumstances of the SMA account owner (as relayed to Vident by the TPMs). Vident will not work directly with the SMA account owners, rather it will rely on coordination with the TPMs on the management of the account. Trading activity is influenced by the frequency of rebalances, contributions, withdrawals, and fixed income security maturities (including call exercise). Vident’s discretionary investment authority allows our firm to determine the specific securities and the amount of securities to purchase, sell or exchange for the SMA. The SMA directly or through the TPM where applicable, may request in writing that Vident make specific investments for the account, and the SMA has the ability to impose investment restrictions. Vident advises and sub-advises SMAs with tax loss harvesting (i.e., effect or order a transaction so as to realize a loss or gain) in mind. The TPM (if sub-advised) or SMA account owner may request that Vident maximize loss harvesting. In such case, Vident reviews the tax loss harvesting request to ensure that the account is discretionarily managed by Vident and that the tax harvesting instructions provided are clear and precise. If Vident deems such instructions to be clear and precise, then it will make reasonable efforts to process the tax harvesting request within stated guidelines. ESMA is unable to receive initial public offering allocations due to unknown eligibility and restrictions around “trading away” (as discussed further below in Item 12 – Brokerage Practices). Please refer to further related and important discussions below in Item 8 – Methods of Analysis, Investment Strategies, and Risk of Loss and Item 16 – Investment Discretion. Indices and Model Strategies Vident also assists in creating or developing indices for licensing and model portfolios that may be used by third parties, SMAs, or sponsors of registered funds. At present, Vident sponsors the 6  four indices utilized by the Vident advised ETFs, and certain equity indices utilized by TPMs for ESMA and the CITs. Wrap Fees Vident does not participate in wrap fee programs. Assets Under Management As of December 31, 2025, Vident had $22,023,570,595 in regulatory assets under management. Of this, $20,876,257,781 was managed on a discretionary basis and $1,147,312,814 was managed on a non-discretionary basis. ITEM 5 – FEES AND COMPENSATION Vident charges an asset-based fee for its investment advisory and sub-advisory services. Certain Funds may be subject to an annual minimum fee, while the SMAs are subject to minimum quarterly fees as discussed below. The asset-based fees, annual minimum fees, and quarterly minimum fees are negotiable on a case-by-case basis. Funds Vident generally enters into a sub-advisory agreement directly with an ETF’s or a Mutual Fund’s primary adviser and a UCITS’s management company (or sometimes the fund’s Investment Manager) for its services. Vident has entered into an investment advisory agreement with the ESS board of trustees for the management of the Vident advised ETFs and a third-party trust company for the management of the CITs. Such agreements contain Vident’s fees, which are negotiated on a case-by-case basis. Such fees are generally disclosed in a Fund’s offering documents, though certain documents may only contain a general discussion of Vident’s sub-advisory services. The Funds do not charge incentive fees. Separately Managed Accounts In some instances, Vident has a direct advisory relationship with an institutional client, rather than a sub-advisory one. In that scenario, Vident enters into an agreement directly with the client for its services. Such agreements contain Vident’s advisory fees, which are negotiated on a case-by- case basis with the institutional client. Vident enters into a sub-advisory agreement directly with the TPMs for its services. Such agreements contain Vident’s sub-advisory fees, which are negotiated on a case-by-case basis with the TPMs. Sub-advisory fees are not negotiated with individual SMA account owners. SMAs will also enter into a separate investment management agreement with the TPMs and incur separate fees directly with such manager. 7  Fixed Income Portfolios The sub-advisory fees for FISMAs range as follows: • Corporate Laddered Bond, Municipal Laddered Bond, Core Taxable and Tax-Efficient Fixed Income: 20-28 basis points (“bps”) on the first $5 million of assets, 15-23 bps on the assets between $5 million and $10 million, and 10-20 bps on the assets above $10 million. Subject to a minimum fee of $100 per quarter. • Taxable Laddered Bond, CD/Treasury Laddered Bond, and Cash Allocation Strategy: 10- 20 bps on all assets. Subject to a minimum fee of $100 per quarter. • Custom Laddered Bond: 20-30 bps on the first $5 million of assets, 15-25 bps on the assets between $5 million and $10 million, and 10-25 bps on the assets above $10 million. Subject to a minimum fee of $1,000 per quarter. Such fees are negotiable on a case-by-case basis. Certain LBP accounts have been grandfathered into a prior fee schedule and as a result may be paying more or less in fees given the introduction of quarterly minimums and fee tiers depending on the SMA’s value of assets under management. Vident’s fees are primarily payable quarterly in advance based on the value of the assets under management at the end of the preceding quarter. While, in certain circumstances, Vident may use alternative billing methodologies in accordance with SMA requirements, including, but not limited to, billing in arrears based average daily balance. For periods of less than three months, Vident’s fees will apply on a pro rata basis, which means that the advisory or sub-advisory fee is payable in proportion to the number of days in the quarter for which the SMA is advised or sub-advised by Vident. Should an SMA account that pays fees in advance terminate intra-quarter, Vident will refund any fees received but not earned for the remaining period in the quarter following account termination. A SMA account owner should work with its TPM should it wish to terminate Vident’s sub-advising of its account. A TPM or direct institutional SMA may terminate the sub-advisory agreement upon 61-days’ written notice to Vident. Vident will deduct our fees directly from the SMA account through the qualified custodian holding the account’s funds and securities as contemplated in the sub-advisory agreement with the TPMs or advisory agreements with the institutional clients. Further, the qualified custodian is obligated to deliver an account statement to the SMA at least quarterly. These account statements will show all disbursements from the SMA account. The SMA account owner should review all statements for accuracy. Equity Portfolios The sub-advisory fees for ESMA range as follows: 8  • Standard: 20-30 bps on the first $20 million of assets, 15-25 bps on the assets between $20 million and $40 million, and 10-20 bps on the assets above $40 million. Subject to a minimum fee ranging from $187.50 to $250 per quarter depending on the agreement with the TPM. • Custom: 30-40 bps on the first $20 million of assets, 25-35 bps on the assets between $20 million and $40 million, and 20-30 bps on the assets above $40 million. Subject to a minimum fee of $375 per quarter. The Custom fee schedule will be assessed if the SMA’s TPM directs the account into a non-standard target strategy and/or the account owner elects to utilize an alternative third party screening provider or provides a customized list of issuers above a reasonable number determined by Vident. • Sovereign’s Flourish: 60-70 bps on the first $20 million of assets, 55-60 bps on the assets between $20 million and $40 million, and 50 bps on the assets above $40 million. Subject to a minimum fee of $375 per quarter. Vident will retain 10-20 bps, respectively of the fees collected based on the three fee tiers described herein. Therefore, Sovereign's will be paid 50 bps, 45 bps, and 40, respectively. • Eventide Investment Management SMA Models: 38 bps on all assets in the Dividend Growth strategy and 45 bps on the Strategic Growth strategy. Subject to a minimum fee of $375 per quarter. Vident will retain 10 bps of the fees collected. Fees for this model will be billed in arrears based on the account’s average assets under management throughout the preceding quarter. Vident has agreed with one TPM to manage particular investment mandates for no fee. Such arrangement applies when an SMA account also has ESMA accounts under Vident’s management. The direct advisory fees for ESMA range from 5-18 bps and may be assessed on all assets or on a tiered structure. Certain accounts may be subject to a minimum quarterly or annual fee, as negotiated. For the above tiered sub-advisory fees, the asset level is determined by the SMA account owner’s total billable “household” assets managed by Vident. Such “householding” may result in a combined lower sub-advisory fee should the combined assets be eligible for a higher fee tier. Vident does not monitor for related accounts for purposes of calculating fee breakpoints and will not effect aggregation of related accounts for purposes of calculating fee breakpoints absent specific notification and direction from the relevant TPM or associated advisor with respect to the specific accounts. The sub-advisory fees and the direct advisory fees for institutional SMAs are negotiable on a case-by-case basis. Advisory and sub-advisory fees are primarily payable quarterly in advance based on the value of the assets under management at the end of the preceding quarter. While, in certain 9  circumstances, Vident may use alternative billing methodologies in accordance with SMA account requirements, including, but not limited to, billing in arrears based on average daily balance. For periods of less than three months, Vident’s fees will apply on a pro rata basis, which means that the fee is payable in proportion to the number of days in the quarter for which the SMA is advised or sub-advised by Vident. Should an SMA account that pays fees in advance terminate intra-quarter, Vident will refund any fees received but not earned for the remaining period in the quarter following account termination. A SMA account should work with its TPM should it wish to terminate Vident’s sub-advising of its account. A TPM or direct institutional SMA may terminate the sub-advisory agreement upon 61-days’ written notice to Vident. Vident will deduct our fees directly from the SMA’s account through the qualified custodian holding the account’s funds and securities as contemplated in the direct advisory agreements and the sub-advisory agreement with the TPMs. Further, the qualified custodian is obligated to deliver an account statement to the SMA at least quarterly. These account statements will show all disbursements from the SMA account. The SMA account owner should review all statements for accuracy. Other Fees for Separately Managed Accounts In addition to the investment management fees paid to the TPMs by sub-advised accounts, both advisory and sub-advisory SMAs typically bear certain expenses on top of Vident’s SMA fees, including custodial fees, transaction charges (such as ticket charges or mark up/down on fixed income transactions) and/or brokerage fees when purchasing or selling securities. The broker- dealer or custodian through whom the SMA account transactions are executed typically imposes these custodial and brokerage charges and fees. Fees, if any, paid by the SMA account to the TPM and/or broker-dealer/custodian are separately negotiated without Vident’s involvement. Vident is not a party to those separate agreements. Vident’s advisory or sub-advisory fee is inclusive of fees for third party screening provider access and corporate engagement partners (as discussed further in Item 17 – Voting Client Securities). FISMA and ESMA sub-advised account owners enter into an investment advisory agreement with a TPM which covers the TPM’s advisory services. The TPMs may have negotiated certain commission rates (including zero brokerage commissions), custodial fees, transaction charges, or other fees with their preferred custodian(s) that SMAs may choose for services. While the fee structure of such agreements is outside this brochure, it is relevant to note that such arrangements will not extend to other brokers or other custodians. Direct institutional SMAs will transact directly with broker-dealers and will pay brokerage commissions on transactions. Please see a further discussion in Item 12 – Brokerage Practices. Vident does not share in any portion of the brokerage fees/transaction charges imposed by the broker-dealer or custodian. 10  When an SMA invests in ETFs, mutual funds, and/or money market funds, the SMA will indirectly bear its proportionate share of any fees and expenses payable directly by such funds (including, for example, the fund’s investment advisory fees or applicable Rule 12b-1 fees). This is in addition to Vident’s advisory or sub-advisory fees, or any fees charged by the TPM. However, if an SMA invests in the Vident advised ETFs or any ETF or Mutual Fund sub-advised by Vident, such investment will not be factored into the overall advisory or sub-advisory fees assessed by Vident to the SMA so as to avoid double-counting of fees paid to Vident. When placing SMAs in mutual funds and/or money market funds, Vident intends to utilize no-load share classes (meaning no upfront sales charges or Rule 12b-1 fees) when applicable and the SMAs meet the share classes’ investment criteria. Vident uses ADRs, foreign ordinary shares traded over-the-counter (“F Shares”), and direct local investments to give ESMA portfolios international exposure. Accounts trading these types of securities incur standard brokerage commissions and further country-specific taxes or fees, or other charges assessed by intermediaries when conducting transactions in foreign securities. Clients should note that similar advisory services may or may not be available from other investment advisers and asset managers for similar or lower fees. Indices and Model Strategies Vident’s fees for index or model portfolio construction are negotiable and depend on the negotiated agreement between Vident and the end recipient/licensor of the index or model portfolio. ITEM 6 – PERFORMANCE-BASED FEES AND SIDE-BY-SIDE MANAGEMENT Vident does not charge clients a performance-based or incentive fee. Vident may manage investments for a variety of clients including the Vident advised ETFs, third- party ETFs, Mutual Funds, UCITS, CITs, and SMAs. Potential conflicts of interest can arise from the side-by-side management of these clients based on fee structures. Vident has policies and procedures designed and implemented to ensure that all clients are treated fairly and to prevent this conflict from influencing the allocation of investment opportunities among clients. Please see Item 12 – Brokerage Practices. ITEM 7 – TYPES OF CLIENTS Vident currently provides investment advisory services to the Vident advised ETFs, CITs, and certain institutional SMAs, and sub-advisory services to third-party ETFs, Mutual Funds, UCITS, and SMAs. SMA account owners include individuals, high net worth individuals, charitable organizations, and corporations or other businesses. 11  Vident requires a Core FI account to have a minimum of $300,000 in investable assets, an LBP account to have a minimum of $200,000 in investable assets, a Cash Allocation account to have a minimum of $100,000, and an ESMA account to have a minimum of $75,000 in investable assets. The minimum investable assets is negotiable. Vident may approve an account to fund with a lower amount of investable assets depending on the strategy to be implemented or where the SMA agrees to meet the stated minimum of investable assets within a mutually agreed upon timeframe. ITEM 8 – METHODS OF ANALYSIS, INVESTMENT STRATEGIES AND RISK OF LOSS Investment Strategies Funds With regard to the ETFs, Mutual Funds, and UCITS, Vident does not have any specific proprietary investment strategies; rather, Vident tracks the underlying benchmarks, indices, investment models or other applicable investment mandates of such accounts. Vident serves as the investment adviser and index provider for the CITs and the Vident advised ETFs. Where Funds seek to track the performance, before fees and expenses, of an index, Vident may use a “replication” strategy to achieve its investment objective, meaning it will invest in all of the component securities of the index, or a “representative sampling” strategy, meaning it may invest in a sample of the securities in the index whose risk, return and other characteristics closely resemble the risk, return and other characteristics of the index as a whole. Vident may use any asset class or investment vehicle, including global equities, global fixed income, ETFs, mutual funds, private funds, REITS, commodities, options, swaps, futures, and liquid alternatives, permitted by an underlying benchmark, index, model strategy or the offering document of each Fund. Investors should refer to a Fund’s offering documents for further information concerning its investment strategy. Separately Managed Accounts Vident Core Fixed Income Strategies (Taxable and Tax-Efficient) With respect to Core FI, Vident invests the taxable portfolio in investment grade corporate bonds, U.S. Treasury securities, and fixed income registered funds (i.e., mutual funds, ETFs). The tax- efficient portfolio also invests in investment grade corporate bonds and fixed income funds, but municipal bonds are substituted for Treasury exposure. Both portfolios are targeted to maintain similar exposures to a benchmark index or model strategy. The portfolios will typically match the duration of the target exposure, typically two to six years of average duration. Vident will 12  implement the management and trading of the selected investment strategy, taking into consideration established investment guidelines and/or restrictions. Laddered Bond Portfolios With respect to LBP, Vident maintains a municipal laddered bond strategy, a corporate laddered bond strategy, a taxable laddered bond strategy, a CD/Treasury laddered bond strategy, and a custom laddered bond strategy (in certain circumstances) that can be tailored to the cash flow needs of the individual SMA. Bond maturities within each type of LBP can vary from one to ten years. The average duration of a short-term LBP is typically zero to two years while the average duration of an intermediate-term LBP is typically two to six years. Vident will implement the management and trading of the selected investment strategy, taking into consideration established investment guidelines and/or restrictions. The municipal laddered bond strategy primarily invests in federal tax-exempt municipal bond securities. The corporate laddered bond strategy primarily invests in corporate bonds having an investment grade rating from at least one of the three major rating agencies. The taxable laddered bond strategy primarily invests in U.S. Treasury debt, U.S. government agency debt, and/or investment-grade corporate debt. The CD/Treasury laddered bond strategy may invest in newly issued brokerage certificates of deposit, U.S. Treasury notes, or a combination thereof. Under certain circumstances (e.g., an anticipated change in a SMA account owner’s future tax status), a custom bond strategy may be employed that contains both municipal bond securities and a mixture of taxable bonds (Treasury, government agency, and/or investment-grade corporate debt). Such a custom strategy would be employed with the goal of maximizing the SMA’s taxable- equivalent yield from the portfolio. An LBP portfolio may deviate temporarily from its stated mandate based on guidance from the TPM. Cash Allocation Strategy Cash Allocation seeks to maximize yield for specific maturities to support an account owner's cash allocation decisions. The portfolio will invest in U.S. Treasury securities with maturities aligned with the account owner's liquidity needs. Equity Portfolios With respect to ESMA, each account will be able to select an investment strategy model offered by the TPMs (if sub-advised), index or model strategies created and maintained by Vident, or a mutually agreed upon custom strategy. Vident will implement the management and trading of the selected investment strategy model, taking into consideration established investment guidelines and/or restrictions, capital gains tax schedules, and applicable values-based investment screens. Vident may use any asset class or investment vehicle, including global equities, ADRs, F Shares, local investment, fixed income, ETFs (including the Vident advised and sub-advised ETFs), mutual 13  funds (including the Vident sub-advised Mutual Funds), and money market funds. For most ESMAs, equity securities listed outside of the U.S. are cost prohibitive to trade with ESMA’s custodian (due to commission rates and foreign exchange transaction fees), therefore Vident anticipates using ADRs and ETFs to gain exposures to non-U.S. securities. Certain Institutional accounts hold F Shares and international shares traded at the local market, When using ADRs or F Shares, Vident will run an analysis to select securities that most closely emulate the desired international exposure in the portfolio. When using ETFs, Vident will search for funds that have a tracking error reasonable for the ESMA’s investment strategy benchmark, while also taking into consideration the fund’s total expense ratio. Vident offers the Sovereign’s Flourish SMA strategy which will be based on a model portfolio provided to Vident by Sovereign's. This equity strategy invests in companies with faith-driven Chief Executive Officers who seek to build exceptional corporate cultures which, in part, enable employees to flourish according to Sovereign’s investment research and thesis. Vident will not be responsible for the selection of securities in this model, but will be responsible for the implementation of any changes to the model Sovereign’s may provide. Vident also offers two strategies based on model portfolios provided to Vident by Eventide Investment Management, LLC (“Eventide”). The Dividend Growth strategy seeks to provide current income, income growth, and long-term capital appreciation by investing in companies with dividend-paying securities identified as having strong fundamentals, among other factors. Strategic Growth SMA strategy seeks long-term capital appreciation by investing primarily in equities of companies identified as having strong fundamentals, creating value for stakeholders and trading at a discount to an estimate of fair value. Vident will not be responsible for the selection of securities in the models, but will be responsible for the implementation of any changes to the models Eventide may provide. Vident does not generally anticipate investing ESMAs in the Vident advised ETFs or in ETFs or Mutual Funds sub-advised by Vident. However, in certain cases, Vident may find that ESMA account size warrants investment in advised or sub-advised ETFs to assist in limiting tracking error against the ESMA’s intended investment strategy benchmark. In such cases, Vident will not include such ETF or Mutual Fund investments in the calculation of the SMA fee payable to Vident as discussed above in Item 5 – Fees and Compensation. Restrictions Vident will also exclude certain securities from an SMA’s account when instructed by the SMA account owner. This exclusion will be either by an SMA requesting certain securities be removed, or by removing certain business types selected by an SMA. In regard to institutional SMAs advised by Vident, the SMA account owner will determine any restriction and/or exclusions and notify Vident in writing. In the case of sub-advised SMAs, such exclusions will be discussed between the SMA account owner and its TPM. Vident will typically not have any immediate contact with the SMA account owner in a sub-advised relationship and will work with the respective TPM on matters affecting the account. 14  Certain SMAs may seek to impose certain values-based investment screens chosen from a menu of options presented to the SMA at the time of its account opening or during the life of the account; though the SMA account owner may change its selection(s) at any time. Such options and screens are based on the methodologies presented by third-party vendors that provide a manual list for Vident’s implementation. An SMA account owner’s perception may differ from Vident’s or the third-party vendors’ on how to judge an issuer’s adherence to certain values-based investing requirements. While SMAs generally cannot customize or edit the methodologies of the values-based investment screens used on its account, the SMA account owner can direct that certain distinct issuers be held or not be held. Account Funding, Monitoring, and Unsupervised Assets SMAs may look to utilize subscriptions in-kind to fund the opening of their accounts. In some instances, the securities being transferred may not be appropriate for the new account’s investment strategy. Vident will work to understand the SMA’s tax budget (i.e., ability to realize capital gains) or other account limitations to assist Vident in setting an investment plan of bringing the SMA in-line with its intended investment strategy. Vident has risk management systems that allow investment personnel to monitor tracking error, factor exposure, beta, yield, duration, and scenario analysis. Investment personnel review such reports as necessary and during their quarterly meetings. Under certain circumstances, SMA account owners may request that Vident’s discretionary authority be limited as to certain assets in the account, while retaining discretion over other portions of the account. Such assets are commonly referred to as “Unsupervised Assets.” SMAs agree that Vident will have no fiduciary obligation as to, or discretion over, Unsupervised Assets. Vident may agree to hold Unsupervised Assets together with supervised assets as an accommodation to the SMA, but Vident has the right to reject doing so. In particular, SMAs should expect Vident not to provide investment advice, vote proxies, or advise as to or effect corporate action decisions with regard to such assets. Indices Indices created and sponsored by Vident have established methodologies set for the rules pertaining to constituent criteria, rebalancing, universe definition, and corporate actions. Vident’s Index Policy Committee oversees each index and meets on a regular basis. For the passively- managed Vident advised ETFs and CITs, a description of each respective index is included in each fund’s offering document. For the indices created and utilized by SMAs, the TPM has been provided information concerning each index. Such indices are equity focused and include domestic equity and global equity (via use of ADRs). Vident has established a governance framework designed to prevent the use and dissemination of material non-public information with respect to the Index Policy Committee which makes decisions on the index or portfolio composition, methodology and related matters from those that 15  may perform portfolio management or trading activities. Vident engages unaffiliated third parties to calculate the indices, and to calculate and disseminate the index values. Models Model strategies created and maintained by Vident have established methodologies set for the rules pertaining to constituent criteria, rebalancing, universe definition, and corporate actions. Internal committees oversee the firm’s model strategies and meet on a regular basis. Investment Risks All investing involves risk, including the permanent loss of capital. Vident does not guarantee the future performance of a Fund, SMA, index or model strategy, the success of any investment decision or strategy, the reduction of tracking error, or the success of the overall management of a Fund or SMA. Clients should understand that investment decisions made for their accounts by Vident are subject to various market, liquidity, commodity, currency, economic, political, and business risks, and that those investment decisions will not always be profitable. Clients should be prepared to bear the risk of loss that accompanies investing in securities, as well as other burdens and risks associated with ownership of securities, including tax reporting, litigation, and safekeeping. While the Funds, SMAs, indices, and/or model strategies may share similar investment risks, the following focuses on those investment risks applicable to the advised and sub-advised SMAs (in alphabetical order). With respect to the Funds, key investment and other risks are set forth in each Fund’s offering documents (i.e., prospectus and Statement of Additional Information). Vident encourages a review of such documents to fully understand the risks of the Funds prior to any potential investment. Asset-Backed and Mortgage-Backed Securities Risk. Asset-backed and mortgage-backed securities are subject to risk of prepayment. These types of securities may also decline in value because of mortgage foreclosures or defaults on the underlying obligations. Mortgage-backed securities offered by non-governmental issuers are subject to other risks as well, including failures of private insurers to meet their obligations and unexpectedly high rates of default on the mortgages backing the securities. Other asset-backed securities are subject to risks similar to those associated with mortgage-backed securities, as well as risks associated with the nature and servicing of the assets backing the securities. Asset-backed securities may not have the benefit of a security interest in collateral comparable to that of mortgage assets, resulting in additional credit risk. Business, Terrorism and Catastrophe Risk. Clients will be subject to the risk of loss arising from exposure that they may incur, indirectly, due to the occurrence of various events, including hurricanes, earthquakes, and other natural disasters, terrorism, war, and other catastrophic events such as a pandemic. These catastrophic risks of loss can be substantial and could have a material adverse effect on Vident’s business and clients’ portfolios including investments made by Vident. 16  Call Risk. Call risk is the possibility that during periods of falling interest rates, a fixed income security will be prepaid (called) prior to its expected maturity date. Such a prepayment produces cash flow that may need to be reinvested at a lower interest rate, causing the overall portfolio return to decline. To limit call risk, LBP will generally be constructed using non-callable bonds. Credit Risk. Credit risk is the potential that the credit rating of an individual bond may be lowered. Credit risk is related to the credit quality of the issuer, a reflection of the market’s judgement concerning the ability of the issuer to meet its obligations over the life of the bond. In general, issues with higher credit quality earn a lower return. Because FISMA portfolios will be invested to maintain a high level of credit quality, credit risk is expected to be low. Cybersecurity Risk. Vident and its service providers are subject to risks associated with a breach in cybersecurity. Cybersecurity is a generic term used to describe the technology, processes and practices designed to protect networks, systems, computers, programs and data from both intentional cyber-attacks and hacking by other computer users as well as unintentional damage or interruption that, in either case, can result in damage or interruption from computer viruses, network failures, computer and telecommunications failures, infiltration by unauthorized persons and security breaches, usage errors by their respective professionals, power outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes. increased and upgraded cybersecurity, A cybersecurity breach could expose both Vident and its clients to substantial costs (including, without limitation, those associated with forensic analysis of the origin and scope of the breach, identity theft, unauthorized use of proprietary information, litigation, adverse investor reaction, the dissemination of confidential and proprietary information and reputational damage), civil liability as well as regulatory inquiry and/or action. In addition, any such breach could cause substantial withdrawals from a client account. While Vident has established an incident response plan in the event of cybersecurity breaches, and risk management strategies, systems, policies and procedures to seek to prevent these breaches, there are inherent limitations in such plans, strategies, systems, policies and procedures including the possibility that certain risks have not been identified. Furthermore, Vident and its clients cannot control the cybersecurity plans, strategies, systems, policies and procedures put in place by other service providers to the clients and/or the issuers in which clients invest. Default Risk. Default risk is the possibility that a bond issuer will fail to make timely payments of interest or principal and is viewed as the most extreme form of credit risk. Depository Receipts Risk. To the extent ESMAs invest in stocks of foreign corporations, ESMAs’ investment in securities of foreign companies may be in the form of depositary receipts or other securities convertible into securities of foreign issuers; normally via ADRs. ADRs are dollar-denominated receipts representing interests in the securities of a foreign issuer, which securities may not necessarily be denominated in the same currency as the securities into which they may be converted. ADRs are receipts typically issued by U.S. banks and trust companies which evidence ownership of underlying securities issued by a foreign corporation. Generally, 17  ADRs in registered form are designed for use in domestic securities markets and are traded on exchanges or over-the-counter in the U.S. ESMAs will not invest in any unlisted Depositary Receipts or any Depositary Receipt that Vident deems to be illiquid or for which pricing information is not readily available. Diversification Risk. Diversification will be achieved by holding numerous individual securities, issuer types, sectors, and/or laddering of fixed income securities’ maturities. The smaller relative size of a SMA’s portfolio compared to that of, for example, a mutual fund, however, could result in less diversification and, therefore, slightly more issuer specific risk. Emerging Markets Risk. Securities of companies in emerging markets may be more volatile than those companies in developed markets. Markets, economies, and government institutions are generally less developed in emerging market countries. Investing in securities of companies in emerging markets may entail special risks relating to the potential for social instability and the risks of expropriation, nationalization, or confiscation. Investors may also face the imposition of restrictions on foreign investment or the repatriation of capital and a lack of hedging instruments. Equity and Fixed Income Risk. A principal risk of investing in the SMA strategies managed by Vident is equity and fixed income risk. This type of risk is the probability that the prices of the securities held by a client will fall due to general market and economic conditions, perceptions regarding the industries in which the companies issuing the securities participate, and the issuer company’s particular circumstances. Fixed income securities’ prices and interest rates move in the opposite direction of one another, meaning as one rises, the other falls. Exchange-Traded Fund Risk. As with all ETFs, their shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of an ETF’s shares will approximate the fund’s net asset value (“NAV”), there may be times when the market price of shares is more than the NAV intra-day (premium) or less than the NAV intra-day (discount) due to supply and demand of shares or during periods of market volatility. This risk is heightened in times of market volatility, periods of steep market declines, and periods when there is limited trading activity for shares in the secondary market, in which case such premiums or discounts may be significant. Foreign Securities and Currency Risk. Investments in foreign securities involve risks relating to political, social, and economic developments abroad, as well as risks resulting from the differences between the regulations to which U.S. and foreign issuers are subject. These risks included expropriation, differing accounting and disclosure standards, currency exchange risks, settlement difficulties, market illiquidity, difficulties enforcing legal rights and greater transaction costs. General Market Risk. The value of the portfolio may fluctuate based on the performance of the portfolio’s investments and other factors affecting the securities markets generally. 18  Government-Sponsored Entities Risk. FISMAs may invest in securities issued or guaranteed by government-sponsored entities. However, these securities may not be guaranteed or insured by the U.S. Government and may only be supported by the credit of the issuing agency. Securities issued by U.S. Government agencies and instrumentalities have different levels of U.S. Government credit support. Some are backed by the full faith and credit of the U.S. Government, while others are supported by only the discretionary authority of the U.S. Government or only by the credit of the agency or instrumentality. No assurance can be given that the U.S. Government will provide financial support to U.S. Government-sponsored instrumentalities because they are not obligated to do so by law. Guarantees of timely prepayment of principal and interest do not assure that the market prices and yields of the securities are guaranteed. High-Yield Fixed Income Securities Risk. High-yield fixed income securities or “junk bonds” are fixed income securities rated below investment grade and are subject to additional risk factors such as increased possibility of default, illiquidity of the security, and changes in value based on public perception of the issuer. Such securities are generally considered speculative because they present a greater risk of loss, including default, than higher quality debt securities. Income Risk. Income risk is the potential for a decline in a portfolio’s total income due to falling market interest rates. An SMA portfolio’s income and proceeds from maturing bonds are typically reinvested at future interest rates, which can fluctuate substantially from the portfolio’s initial interest rates. LBP portfolio will have laddered maturities, which averages interest rates from multiple periods, lowering the portfolio’s exposure to income risk. Index-Related Risks. There is no assurance that the index provider or any agents that may act on its behalf will compile the index accurately, or that the index will be determined, composed, or calculated accurately. While the index provider provides descriptions of what the index is designed to achieve, neither the index provider nor its agents provide any warranty or accept any liability in relation to the quality, accuracy or completeness of the index or its related data, and they do not guarantee that the index will be in line with the index provider’s methodology. Errors in respect of the quality, accuracy and completeness of the data used to compile the index may occur from time to time and may not be identified and corrected by the index provider for a period of time or at all, particularly where the indices are less commonly used as benchmarks by funds or managers. Such errors may negatively or positively impact a portfolio managed to an index strategy (“index portfolio”). There is no guarantee that an index portfolio will achieve a high degree of correlation to its index and therefore achieve its investment objective. Market exposure and regulatory restrictions could have an adverse effect on the index portfolio’s ability to adjust its exposure to the required levels in order to track its index. Inflation Risks. The value of assets or income from investments may be lower in the future as inflation decreases the value of money. As inflation increases, the value of a portfolio’s assets can decline, as can the value of a portfolio’s distributions. Interest Rate Risk. Interest rate risk is the potential for fluctuations in bond prices due to changing interest rates. In general, bond prices vary inversely with interest rates. That is, if interest rates rise, bond prices tend to fall; if interest rates fall, bond prices tend to rise. In addition, longer- 19  maturity bonds generally fluctuate more in price than shorter-maturity bonds but may offer higher yields to compensate investors for this risk. Issuer Risk. Current reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Issuer Specific Risk. The value of an individual security can be more volatile than the market as a whole and can perform differently from the market. An account could lose all of its investment in a company. Large Capitalization Risk. The securities of large, established companies may be unable to respond quickly to new competitive challenges such as changes in technology and consumer tastes. Many large companies may not be able to attain the high growth rate of successful smaller companies, especially during extended periods of economic expansion. Liquidity Risk. Trading opportunities are more limited for fixed income securities that have not received any credit ratings, have received rating below investment grade, or are not widely held. These features make it more difficult to sell or buy a security at a favorable price or time. Consequently, a portfolio may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on its performance. Infrequent trading of securities may also lead to an increase in their price volatility. Liquidity risk also refers to the possibility that a portfolio may not be able to sell a security or close out a position in a timely manner. If this happens, the portfolio will be required to hold the security or keep the position open, and it could incur losses. Management Risk. The portfolio manager’s judgments about the attractiveness, value and potential appreciation of the portfolio’s investments may prove to be incorrect and the investment strategies employed by the portfolio manager in selecting investments for the portfolio may not result in an increase in the value of your investment or in overall performance equal to other similar investment vehicles having similar investment strategies. Mid-Capitalization Risk. The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- capitalization companies, but they may also be subject to slower growth than small-capitalization companies during times of economic expansion. The securities of mid-capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large capitalization stocks or the stock market as a whole, but they may also be nimbler and more responsive to new challenges than large capitalization companies. Some mid-capitalization companies have limited product lines, markets, financial resources, and management personnel and tend to concentrate on fewer geographical markets relative to large-capitalization companies. Municipal Securities Risk. The municipal securities market is volatile and can be significantly affected by adverse tax, legislative or political changes, and the financial condition of the issuers of municipal securities. Income from municipal bonds, while exempt from federal 20  taxes, may be subject to state and local taxes and at times the alternative minimum tax. Vident does not provide legal or tax advice. Portfolio Turnover Risk. Certain investment strategy models are rebalanced on a pre- determined schedule by the TPM, which may result in the account experiencing excess portfolio turnover. Excessive portfolio turnover may also occur if a SMA funds its new account with securities from another account that do not meet the criteria for the selected investment strategy or values-based investment screens chosen by the SMA. The greater portfolio turnover may lead to greater transactions costs (generally applicable to situations where trades are not executed with the SMA’s chosen custodian or exceed a certain traded share threshold) to the account, including the payment of transaction costs on the purchase and sale of securities, which could have an adverse effect on the account’s total rate of return. Prepayment and Extension Risk. Many types of fixed income securities are subject to prepayment risk. Prepayment occurs when the issuer of a fixed income security can repay principal faster than expected prior to the security’s maturity. Fixed income securities subject to prepayment risk can offer less potential for gains during a declining rate environment and similar or greater potential for loss in a rising interest rate environment. In addition, the potential impact of prepayment features on the price of a fixed income security can be difficult to predict and result in greater volatility. On the other hand, rising interest rates could cause prepayments of the obligations to decrease. This is known as extension risk and may increase the portfolio’s sensitivity to rising rates and its potential for price declines. Restricted Securities Risk. The SMAs may invest in restricted securities (securities with limited transferability under the securities laws) acquired from the issuer in “private placement” transactions. Private placement securities are not registered under the Securities Act of 1933, as amended and are subject to restrictions on resale. They are eligible for sale only to certain qualified institutional buyers and are not sold on a trading market or exchange. While private placement securities offer attractive investment opportunities otherwise not available on an open market, because such securities are available to few buyers, they are often both difficult to sell and to value. Small Capitalization Risk. The securities of small companies may involve greater risks than investing in larger, more established issuers. Small companies typically have relatively lower revenues, limited product lines and lack of management depth and may have a smaller share of the market for their product or service than large companies may. Stocks with small capitalizations tend to have less trading volume than stocks with large capitalizations. Less trading volume may make it more difficult for our portfolio managers to sell securities of small- capitalization companies at quoted market prices. There are periods when investing in small- capitalization stocks fall out of favor with investors and the stocks of small-capitalization companies underperform. Tax Loss Harvesting. SMAs should be aware that events such as market changes (during the period before instructions are complied with and decisions are made) may increase or reduce the amounts of losses and gains that are realized from the SMA’s portfolio at any time. 21  Additionally, this activity may adversely affect the portfolio’s performance and may increase the volatility of its results. SMAs are reminded to consult a tax advisor prior to making any tax harvesting request, as Vident does not provide tax advice. Although Vident will make reasonable efforts to avoid wash sale rule (the act of selling a security at a loss for the tax benefits, but then purchasing the same or a similar security within a 30-day period) violations, Vident cannot guarantee that wash sale rule violations will not occur during tax loss harvesting activity. In some cases, Vident may execute a trade that will generate a wash sale rule violation when it deems this in the best interest of the SMA. Furthermore, since tax laws are subject to change, future tax liabilities may increase and therefore tax loss harvesting may not result in the anticipated benefits. Finally, there is no guarantee that the U.S. Internal Revenue Service will not limit and/or prohibit recognition of realized losses. Tax Reform Risk. Occurs if a flat tax or other significant tax reform were implemented, reducing, or eliminating altogether the present tax benefits of holding municipal securities. Historically, tax reform legislation has grandfathered in outstanding issues, but there is no guarantee that this will occur. Tracking Error Risks. The divergence between the performance of a client’s account and the designated index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors, such as restrictions imposed by a client on the types of securities held in the account; available loss harvesting opportunities; regulatory, operational, custodial or liquidity constraints; corporate transactions; asset valuations; transaction costs and timing; tax considerations; investments in securities not included in the index or ADRs; and index rebalancing. In addition, cash flows into and out of a client account, purchases and sales of securities, expenses and trading costs all affect the ability of a client account to track the performance of the index, because the index does not have to manage cash flows and does not incur any costs. Valuation Risk. The prices provided by the SMA’s custodian, pricing service or independent dealers may be different from the prices used by other SMAs or from the prices at which securities are actually bought and sold. The prices of certain securities provided by a custodian or pricing services may be subject to frequent and significant change and will vary depending on the information that is available. Values-Based Investment Screen Risk. Certain SMAs may impose certain environmental, faith-based, governance, and/or social screens. Such screens may lessen the universe of investments than that of other SMAs and therefore the SMA’s implemented strategy may underperform the market as a whole if such investments underperform the market. The SMA may forgo opportunities to gain exposure to certain attractive companies, industries, sectors or countries and it may choose to sell a security when it might otherwise be disadvantageous to do so. Responsible investing and screening are subjective by nature, and Vident relies on screening methodologies provided by third-party vendors. A SMA account owner’s perception may differ from Vident’s or the third-party vendor’s on how to judge an issuer’s adherence to responsible investing principles. 22  When-Issued Securities Risk. The price or yield obtained in a when-issued transaction may be less favorable than the price or yield available in the market when the securities delivery takes place, or that failure of a party to a transaction to consummate the trade may result in a loss to the portfolio or missing an opportunity to obtain a price considered advantageous. Zero-Coupon Bonds Risk. Zero-coupon bonds do not pay interest on a current basis and may be highly volatile as interest rates rise or fall. In addition, while such bonds generate income for purposes of generally accepted accounting standards, they do not generate cash flow and thus could cause the portfolio to be forced to liquidate securities at an inopportune time in order to distribute cash, as required by tax laws. ITEM 9 – DISCIPLINARY INFORMATION There are no reportable legal or disciplinary events for Vident or its employees. ITEM 10 – OTHER FINANCIAL INDUSTRY ACTIVITIES AND AFFILIATIONS In addition to our status as a registered investment adviser with the SEC, Vident is registered as a Commodity Trading Advisor with the Commodity Futures Trading Commission and is a member of the National Futures Association. Vident serves as sub-adviser to certain SMAs via a sub-advisory agreement with Blue Trust, Inc. (“Blue”). Blue is a Tennessee-charted public trust company. Vident and Blue have entered into an agreement whereby Blue is compensated for use of its intellectual property involving the principled reasoning investment philosophy in investment models, indices, and proxy voting. Vident and Blue are under common control. Vident serves as a sub-adviser to the Sovereign’s Capital Flourish Fund (“SOVF”), a series of the Elevation Series Trust, registered under the 1940 Act. Sovereign’s serves as the investment adviser to SOVF. Vident serves as trading sub-adviser to the Sovereign’s Flourish SMA. Sovereign’s may also have certain private fund offerings included on a private fund placement platform to which Vident provides administrative services. Vident will receive certain administrative services support fees annually. Vident and Sovereign’s are under common control. Vident has contracted as a sub-adviser to Innovest Portfolio Solutions, LLC (“Innovest”), an SEC registered investment adviser. Innovest also serves as a pension consultant that may refer clients to Vident. Vident and Innovest are under common control. ALPS acts as distributor of the Vident advised ETFs. Certain Vident employees are registered representatives of ALPS. These individuals do not receive commissions, fees, or other remuneration in connection with securities transactions. 23  ITEM 11 – CODE OF ETHICS, PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS AND PERSONAL TRADING Vident has adopted a Code of Ethics (“Code”), pursuant to Rule 204A-1 under the Investment Advisers Act of 1940, as amended (“Advisers Act”) and Rule 17j-1 under the 1940 Act, that describes the standards of business conduct that it requires of employees and accounts owned predominantly by persons associated with Vident, and establishes procedures intended to prevent Vident, and its personnel and certain of their immediate family members, from inappropriately benefiting from Vident’s relationships with its clients. The Code is reviewed annually and updated as applicable. The Code provides that: • The policies and procedures are based on general concepts of fiduciary duty to clients; • Each employee’s professional activities and personal investment activities must be consistent with the Code, which is designed to help avoid actual or potential conflicts between the interests of clients and those of Vident or its employees; • Employees must abide by the standards set forth in Rule 204A-1 and Rule 17j-1; and • Employees will be required to act with competence, dignity and integrity, in an ethical manner, when dealing with clients, the public, prospective clients or investors, third-party service providers and fellow employees. Vident requires certain employees referred to as “Reporting Persons” to obtain prior written approval before acquiring a direct or indirect beneficial ownership (through purchase or otherwise) of: (i) a “Reportable Security”, (ii) cryptocurrency, or (iii) a security in a limited offering (generally meaning a private placement, such as a hedge fund or private equity fund). Reporting Persons are prohibited from acquiring a security in an initial public offering. Reporting Persons are subject to certain restrictions as to the purchase and sale of their personal security holdings to the extent that a client advised by Vident holds or is expected to trade the same security, though a de minimis exception applies to certain trading. The Code also contains restrictions on, and procedures designed to help prevent, inappropriate trading while Vident is in possession of material non-public information. Vident will provide a copy of its Code to any client or prospective client upon request. Such a request may be made by submitting a written request to Vident by email or to the address on the cover page of this brochure. Vident does not have a material interest in any securities traded in a client’s account (notwithstanding its involvement in the Vident advised ETFs or sub-advised ETFs or Mutual Funds as discussed previously). Vident does not engage in principal transactions with its clients. A principal transaction is one in which Vident or an affiliate of Vident sells or purchases a security for its own account, and the other party to the transaction is a Vident client. 24  ITEM 12 – BROKERAGE PRACTICES Vident has discretion in deciding what brokers-dealers and other counterparties clients will use and in negotiating rates of brokerage compensation (subject to any restrictions agreed on between Vident and an applicable client). For sub-advised ESMAs, Vident generally limits trading with the applicable ESMA’s custodian given the rates negotiated by the TPMs, while FISMA have the ability to “trade away” from the custodian as discussed further below. General Selection Criteria It is Vident’s policy to seek best execution, based upon a number of considerations, from the broker-dealers and other counterparties with whom it places trades for execution on behalf of its clients; though Vident may be limited in this regard as detailed below under “Directed Brokerage”. While trade price is often a significant quantitative factor in best execution, Vident also evaluates qualitative execution factors, such as execution capability overall, order flow in a stock, market making capabilities, promptness of execution, the ability to access various market centers, the ability to execute non-standard transactions, the ability to successfully process allocations and block trades, broker quality overall, client service and reporting, data security and protection of client personal information, the financial condition and stability of the broker-dealer and other counterparties, the ability or willingness to maintain and commit adequate capital when necessary to complete trades, technology integration capabilities, fee structure and reputation and integrity of the broker-dealer and other counterparties. The determining factor is not the lowest possible commission cost alone. Soft Dollars Vident utilizes research-related products and other brokerage services on a soft dollar commission basis. The term “soft dollars” refers to the receipt by Vident of products and services provided by such brokers without any cash payment by Vident, a Vident advised ETF, or an ETF or Mutual Fund, based on the volume of revenues generated from brokerage commissions for transactions executed for the Vident advised ETFs and certain ETFs and Mutual Funds (as permitted by the sub-advised ETF and its primary adviser) (collectively, the “Soft Accounts”). Section 28(e) of the Securities Exchange Act of 1934, as amended provides a “safe harbor” to advisers who use soft dollars generated by their advised accounts to obtain investment research and brokerage services that provide lawful and appropriate assistance to the adviser in the performance of investment decision making responsibilities. Vident’s soft dollar policy is to make a good faith determination of the value of the product or services in relation to the commissions paid. Vident maintains soft dollar arrangements for those products and services, which assist Vident, in its investment decision-making process. Vident uses such products and services in the investment decision-making for all clients, not just for those accounts whose commissions may be considered to have been used to pay for the products or services. 25  When Vident uses the Soft Accounts’ brokerage commissions to obtain research-related products or brokerage services, it receives a benefit because it does not have to produce and/or pay for the products or services. Therefore, Vident may have an incentive to select or recommend a broker based on its interest in receiving products or services, rather than on a Soft Account’s interest in receiving the most favorable execution. The Soft Accounts may pay commissions to brokers providing soft dollar research, products and other services that are higher than those charged by brokers for “execution only” transaction commissions. Vident also participates in a commission sharing arrangement where a single broker, not used for trading execution, aggregates soft dollar credits when other brokers participating in the arrangement execute trades for Vident on a soft dollar basis. As noted above, Vident addresses this possible conflict by seeking best execution based upon a number of considerations, including the value of the obtained soft dollar products and services. In the event Vident obtains any mixed–use products or services on a soft dollar basis (where a portion of the product or service is deemed non-research related), Vident will make a reasonable allocation of the cost between that portion which is eligible as research or brokerage services and that portion which is not so qualified. Vident has conflict of interest when making any such allocation determination and has adopted policies and procedures for such allocation determinations. The portion eligible as research or brokerage services will be paid for with discretionary Soft Account commissions and the non-eligible portion (e.g., computer hardware, accounting systems, etc.) which is not eligible for the safe harbor provided under Section 28(e) will be paid for with Vident’s own funds. The factors Vident may rely upon to base a mixed-use allocation include: (i) the amount of time the product or service is used for eligible and ineligible purposes; (ii) an objective measure of the usefulness of the eligible and ineligible uses; and (iii) the extent to which the product or service is redundant with other products or services that Vident uses for the same purpose. For any mixed-use products or services, Vident will maintain appropriate records of its reviews and good faith determinations of its reasonable allocations. Usage Incentive Program For certain fixed income security trading, Vident may utilize a platform service that assists in putting program trades out to bid to various broker-dealers in the platform’s network. As an incentive for using this platform service, Vident, under the rules of the service’s incentive program, may receive billing credits which offset a portion of Vident’s cost of its order management system. Vident may have an incentive to execute trades via the platform service versus going directly to a broker-dealer based on its interest in receiving billing credits for its order management system. Vident addresses this possible conflict by seeking best execution based upon a number of considerations, including the market sector, assessment of price, trade ability, and exposure to market liquidity. 26  Aggregation of Orders Funds Vident does not generally aggregate Fund orders as it generally does not have more than one account with the same or similar investment strategy and has limited scenarios where aggregation is feasible. Trade orders are generally processed and executed in the order received. As a result of Vident not generally aggregating Fund orders, a client account may have a different net execution cost and/or average price, which may be more or less favorable. Not aggregating orders also presents the possibility of the undesirable scenario of having more than one order in the market competing against each other. In addition, Vident may realize certain operational efficiencies by not aggregating Fund orders as aggregating Fund orders may not be practical due to the fact that different orders can arrive and be generated at different times in day. If Vident were to aggregate trade orders for Funds having the same or similar investment strategy, each account will receive the average executed price and a pro rata share of the commissions (if applicable). Separately Managed Accounts Vident may aggregate SMA trades when such aggregation is expected to be in the best interest of all participating SMAs. Vident will not aggregate orders across multiple custodians. Execution performance results may vary among custodians. Vident will consider each participating account’s size, diversification, cash availability, investment objectives, and any other relevant factors, when placing trades. In particular, Vident may provide a greater than pro rata allocation of aggregated trades to new ESMA accounts that are not yet fully invested, as well as pre-existing accounts that have received additional uninvested ESMA capital. With respect to FISMA accounts, such accounts, and more so LBPs, generally trade based on the needs of an individual account, but if more than one account’s FISMA strategies are in close alignment, Vident may have the ability to purchase a larger block of bonds and allocate to the individual accounts based on their individual size needs. If the trade is fully filled by the end of the day, Vident will provide the executing broker-dealer with the pre-trade allocation instructions for order fulfillment. If the trade is partially filled at the end of the day, Vident will instruct the broker-dealer to allocate the trade pro-rata based on the written pre-allocation. De minimis deviations from the pre-allocation are permitted in the interest of placing round lots in SMA accounts. If investment personnel receive a new trade order for an investment where a block trade is already pending, investment personnel will instruct the broker-dealer to allocate all interests already traded to the original block’s participants on a pro-rata basis and will then form a new block that includes the new participants’ order, as well as the unfilled portion of the original participants’ order. When placing SMA transactions through multiple broker-dealers (for example, in a “trade away” scenario), Vident aggregates trades by such entities as investment personnel’s review of 27  accounts occur. Trade submittal happens as total aggregations are ready which will vary each day. Such “trade away” transactions could incur additional fees assessed by the applicable custodian (as with the FISMA custodian) and commission charges for equity securities assessed by the executing broker-dealer. Vident does not share in any portion of the brokerage fees/transaction charges imposed by the TPMs, or the broker-dealer or custodian. All accounts participating in a block trade must receive the average price and pay a proportional share of any commission, subject to minimum ticket charges. Vident will seek to allocate trades in a manner that is fair to clients and will never allocate trades based on an account’s performance or fee structure. Directed Brokerage The sub-advised ESMAs in their agreement with the TPMs must select a single custodian to effect all equity, ETF, mutual fund and/or money market trades. The TPMs and custodians have negotiated their own commission and fee arrangements. Similarly, advised institutional ESMAs have also selected their custodian and negotiated their own fee agreements prior to becoming a client of Vident. Vident is not involved in the custodian selection process of any SMA, and has no ability to suggest alternative custodians, or negotiate any fees, rates, or commissions with said custodian. The custodian’s execution procedures are designed to make every attempt to obtain the best execution possible, although there can be no assurance that it can be obtained. SMAs should consider whether the appointment of the single custodian as the sole broker for such trading may result in certain costs or disadvantages to the SMA as a possible result of less favorable executions. Execution through a broker other than the designated custodian will increase costs to the client due to brokerage commissions for equity securities and incurred trade away fees (in the case of sub-advised ESMAs). Because of this, in order to minimize a SMA’s trading costs, Vident attempts to execute most trades for sub-advised SMAs through the designated custodian. In other instances where Vident begins with the ability to execute with broker-dealers of its choice, a client may also direct Vident to effect transactions in their account through a specific broker- dealer. Under such a directed brokerage arrangement, the client is responsible for negotiating terms for their account directly with the broker-dealer. Vident will only direct brokerage pursuant to specific instructions that have been signed and dated by the client. For accounts subject to directed brokerage arrangements discussed immediately above, Vident will not aggregate trades or seek better execution services or prices from other broker-dealers. Vident will place trades on behalf of accounts subject to directed brokerage arrangements after trading on behalf of other accounts. Consequently, Vident may not obtain best execution on behalf of clients that direct brokerage; such clients may pay materially disparate commissions, greater spreads, or other transaction costs, or receive less favorable net prices on transactions than would otherwise be the case. 28  In order to meet directed brokerage mandates and trade in an efficient manner, Vident may ask clients that direct brokerage to permit the use of “step-out” trades. Regarding the Vident advised ETFs and sub-advised ETFs and Mutual Funds, Vident will not consider any sale or promise to sell shares of the Vident advised ETFs, the ETFs, or the Mutual Funds by a broker-dealer when considering using such a broker-dealer to transact transactions for the Vident advised ETFs, ETFs, and Mutual Funds. Principal Trades and Cross Trades Vident will not enter into any principal trades with clients, nor enter into any cross trades between SMA accounts. Vident has the ability to enter into cross trades involving the Funds, with the exception of the CITs, pursuant to the Funds’ policies and procedures. Brokerage for Client Referrals Vident does not receive client referrals from broker-dealers or third parties in exchange for selecting or recommending a broker-dealer. Trade Errors As a fiduciary, Vident seeks to exercise utmost care in making and implementing investment decisions for client accounts. Nonetheless, from time to time a trade error may occur. When a trade error occurs, Vident seeks to promptly correct such an error to minimize client impact. Where an error results in a net loss to a client, Vident will reimburse the client unless otherwise disclosed or negotiated between Vident and the client. For this purpose, the economic effect (including costs) of all related transactions (i.e., the erroneous trade(s) and any related corrective trade(s) or other remedial actions) are considered. Where an error results in a net gain to a client (generally outside the use of an error account, see below), the client will generally retain the net gain. However, when retaining the net gain is inconsistent with applicable law, creates adverse tax consequences, or is inconsistent with a client’s policies, clients may renounce the gain and such gains may be donated to charity. Vident has established an error account with one SMA custodian to limit any financial impact on an SMA account on the custodian’s platform when a trade error occurs. Vident will be responsible for settling any net losses in the error account with the custodian, whereas any net gains exceeding $100 will be donated to a charity of Vident’s choice. A second SMA custodian has the ability to transfer errant trades away from the impacted SMA while executing the proper trades in the SMA. If the trade correction produces a net gain greater than $500, then the SMA may choose to keep the gain, or a donation is made by the custodian platform to a charity of the SMA’s choice. If the trade correction produces a net loss greater than $100, the custodian platform charges Vident for the loss amount. 29  ITEM 13 – REVIEW OF ACCOUNTS Subject to the information discussed above, including Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss, Vident reviews client accounts on an ongoing basis to determine accomplishment of investment objectives, diversification of each portfolio and security positions. Such reviews are performed by Vident’s portfolio management personnel. Reviews may be triggered by market conditions or market and economic events. Further, Vident formally reviews the Funds any time there is a material change to each relevant prospectus or statement of additional information. The securities broker-dealer or custodian, through whom a SMA’s transactions are executed, sends or delivers in written or electronic format to the client a confirmation of each transaction. The broker-dealer or custodian also sends the SMA a written monthly statement of the account showing all transactions during the month and the month-end position in either physically printed or electronic format. ITEM 14 – CLIENT REFERRALS AND OTHER COMPENSATION Vident does not compensate any third party for referrals of investment adviser partners or clients for which Vident will serve as adviser or sub-adviser. Vident does not receive compensation for any client referral. ITEM 15 – CUSTODY All client assets are held in custody by unaffiliated broker-dealers or banks. Under Rule 206(4)-2 under the Advisers Act, Vident is deemed to have custody of client assets if we are authorized to instruct the custodian to deduct our sub-advisory fees directly from a client account. For such accounts, account custodians send statements directly to the account owners on at least a quarterly basis. Clients should carefully review these statements and should compare these statements to any account information provided by the TPM or Vident. Vident does not issue account statements to sub-advised SMA account owners, but may share information directly with the TPM. Otherwise, Vident is not deemed to have custody over any client account. Vident is not deemed to have custody of the Vident advised ETFs’ or sub-advised ETFs’ or Mutual Funds’ funds and securities as these are maintained at a qualified custodian and subject to Section 17(f) of the 1940 Act and the rules thereunder. ITEM 16 – INVESTMENT DISCRETION Vident has discretionary authority (except as discussed below) to manage securities accounts on behalf of clients pursuant to a grant of authority in each client’s governing and investment management documents. Vident has discretion to determine: 30  • Securities to be bought or sold for client accounts; • Amount of securities to be bought or sold for client accounts; • Broker-dealer to be used for a purchase or sale of securities for clients’ accounts; and • Commission rates to be paid to a broker-dealer for clients’ securities transactions (when trading away from a SMA’s custodian). Vident is not limited in this authority except to the extent the advisory or sub-advisory agreement and/or client has established specific guidelines and/or prohibitions with respect to its investment account and specific securities. Vident serves as trading sub-adviser for certain UCITS and certain SMA accounts where we provide non-discretionary advice concerning the purchase and sale of securities. This means Vident only takes action at the direction of the UCITS manager, investment manager, or TPM as applicable. ITEM 17 – VOTING CLIENT SECURITIES Vident votes the proxies for any clients that have given it authority to do so; which includes the Vident advised ETFs, CITs, ESMA, and certain institutional advisers. Vident has not been given proxy voting authority over the third-party sub-advised ETFs, Mutual Funds, and UCITS. For ESMA, it is expected that such SMAs will grant Vident the authority to vote proxies on the account’s behalf, with the exception of those Unsupervised Assets discussed above in Item 8 – Methods of Analysis, Investment Strategies and Risk of Loss. Vident’s proxy voting policies and procedures are designed to ensure that proxies are voted in the best interests of clients without regard to any relationship that any client or affiliated person may have with the issuer of the security and with the goal of maximizing value to clients consistent with governing laws and the investment policies of each client. While securities are not purchased to exercise control or to seek to effect corporate change through share ownership activism, Vident supports sound corporate governance practices within companies in which clients invest. Vident’s Proxy Voting Committee is responsible for overseeing the proxy voting process and ensuring that the voting process is implemented in conformance with established policies and procedures. The committee has developed custom proxy voting guidelines which are reviewed at least annually by the Proxy Voting Committee. Vident has hired a third-party proxy voting administrator to assist in the implementation of the proxy voting process pursuant to custom proxy voting guidelines utilized by Vident. The Proxy Voting Committee shall also be responsible for overseeing the third-party proxy voting administrator to determine that it accurately applies the custom proxy voting policies and operates as an independent proxy voting agent. Vident’s oversight process of the proxy voting administrator includes an assessment of its policies and 31  including conflict controls and monitoring, receipt and review of routine procedures, performance-related reporting, and periodic due diligence meetings. While Vident uses its reasonable best efforts to vote proxies, in certain circumstances, it may be impractical or impossible for Vident to vote proxies (e.g., limited value or unjustifiable costs). Additionally, proxy voting in certain countries requires 'share blocking'. Shareholders wishing to vote their proxies must deposit their shares with a designated depositary before the date of the meeting. Consequently, the shares may not be sold in the period preceding the proxy vote. Absent compelling reasons, Vident believes that the benefit derived from voting these shares is outweighed by the burden of limited trading. Therefore, if share blocking is required in certain markets, Vident may not participate and refrain from voting proxies for those clients impacted by share blocking. As a general matter, securities on loan will not be recalled to facilitate proxy voting (in which case the borrower of the security shall be entitled to vote the proxy). However, as it relates to portfolio holdings of the Vident advised ETFs or CITs, if the Proxy Voting Committee is aware of an item in time to recall the security and has determined in good faith that the importance of the matter to be voted upon outweighs the loss in lending revenue that would result from recalling the security, the security will be recalled for voting. Vident may have a conflict of interest regarding a proxy to be voted upon if, for example, Vident or their direct affiliates have other relationships with the issuer of the proxy. In most instances, conflicts of interest are avoided through a strict and objective application of Vident’s custom proxy voting guidelines. However, when the third-party proxy voting administrator is aware of a material conflict of interest regarding a matter that would otherwise require a vote by the Proxy Voting Committee or that, in the determination of the Proxy Voting Committee, otherwise warrants the taking of additional steps to mitigate the conflict, the Proxy Voting Committee or the third-party proxy voting administrator shall address the material conflict by using any of the following methods: (i) instructing the third-party proxy voting administrator to vote in accordance with the recommendation it makes to its other clients; (ii) disclosing the conflict to the client and obtaining their input and/or consent before voting; (iii) engaging an independent fiduciary who will direct the Proxy Voting Committee how to vote on such matter; (iv) consulting with outside counsel for guidance on resolution of the conflict of interest; (v) erecting information barriers around the person or persons making voting decisions; (vi) voting in proportion to other shareholders ("mirror voting"); or (vii) voting in other ways that are consistent with Vident’s obligation to vote in the best interests of its clients. Vident makes available corporate engagement service providers to ESMA account owners. The corporate engagement service providers are given discretion to engage with companies, including drafting and editing letters to the company, attending shareholder meetings and having phone calls with the company. Vident engages with corporate engagement service providers based on requests from ESMA or fund sponsors utilizing Vident’s services. These corporate engagement service providers in no way represent Vident’s interests and are completely independent of Vident. Account owners may choose the firm to utilize, or may opt out of such service. 32  For information concerning how Vident voted on any particular proxy matter, or to obtain a copy of Vident’s proxy voting policy, please contact us via the contact information on the cover page of this brochure. You may also find how Vident voted on certain executive compensation matters by visiting www.sec.gov and reviewing our Form N-PX. Vident votes corporate actions, and the making of all elections relative to any mergers, acquisitions, tender offers, bankruptcy proceedings or other type events pertaining to securities held in client account(s). ITEM 18 – FINANCIAL INFORMATION Vident is not required to provide financial information to clients because Vident does not require or solicit prepayment of more than $1,200 in fees per client, six months or more in advance, does not take custody of client funds or securities, and does not have a financial condition that is reasonably likely to impair the firm’s ability to meet its commitments to clients. Vident has not been the subject of a bankruptcy petition. ITEM 19 – REQUIREMENTS FOR STATE-REGISTERED ADVISERS Not applicable. 33