# EDGAR Filing Document

**Accession Number:** 0001392994
**File Stem:** 0001445546-23-001041
**Filing Date:** 2023-2
**Character Count:** 209737
**Document Hash:** eff4e239814883160ffbedcbf487fe52
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001445546-23-001041.hdr.sgml**: 20230206

**ACCESSION NUMBER**: 0001445546-23-001041

**CONFORMED SUBMISSION TYPE**: N-CSR

**PUBLIC DOCUMENT COUNT**: 23

**FILED AS OF DATE**: 20230206

**DATE AS OF CHANGE**: 20230206

**EFFECTIVENESS DATE**: 20230206

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FIRST TRUST SPECIALTY FINANCE & FINANCIAL OPPORTUNITIES FUND
- **CENTRAL INDEX KEY:** 0001392994
- **IRS NUMBER:** 061810845
- **FISCAL YEAR END:** 1130

**FILING VALUES:**
- **FORM TYPE:** N-CSR
- **SEC ACT:** 1940 Act
- **SEC FILE NUMBER:** 811-22039
- **FILM NUMBER:** 23589889

**BUSINESS ADDRESS:**
- **STREET 1:** 120 EAST LIBERTY DRIVE, SUITE 400
- **CITY:** WHEATON
- **STATE:** IL
- **ZIP:** 60187
- **BUSINESS PHONE:** 630-765-8000

**MAIL ADDRESS:**
- **STREET 1:** 120 EAST LIBERTY DRIVE, SUITE 400
- **CITY:** WHEATON
- **STATE:** IL
- **ZIP:** 60187

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FIRST TRUST/GALLATIN SPECIALTY FINANCE & FINANCIAL OPPORTUNITIES FUND
- **DATE OF NAME CHANGE:** 20070320

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** FIRST TRUST/GALLATIN SPECIALTY FINANCE FUND
- **DATE OF NAME CHANGE:** 20070313

?xml version="1.0" encoding="utf-8"?

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

**FORM N-CSR**

**CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES**

Investment Company Act file number <u>811-22039</u> 

<u>First Trust Specialty Finance & Financial Opportunities Fund</u>

(Exact name of registrant as specified in charter)

120 East Liberty Drive, Suite 400

 <u>Wheaton, IL 60187</u> 

(Address of principal executive offices) (Zip code)

W. Scott Jardine, Esq.

First Trust Portfolios L.P.

120 East Liberty Drive, Suite 400

 <u>Wheaton, IL 60187</u> 

(Name and address of agent for service)

Registrant's telephone number, including area code: <u>630-765-8000</u>

Date of fiscal year end: <u>November 30</u>

Date of reporting period: <u>November 30, 2022</u>

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

**Item 1. Reports to Stockholders.**

(a) The Report to Shareholders is attached herewith.

![](imgcd8b4b9e1.jpg)

First Trust

Specialty Finance and Financial

Opportunities Fund (FGB)

Annual Report

For the Year Ended

November 30, 2022

![](img27131b622.jpg)

![](img24e71d1e3.jpg)

------

**Table of Contents**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**Annual Report**

**November 30, 2022**

---

| | |
|:---|:---|
| [Shareholder Letter](#xx_63680e0f-e885-4c67-b8a9-4f90360e0de3_1)<br>| &nbsp;&nbsp;&nbsp;&nbsp;1 |
| [At a Glance](#xx_29832ddc-8c58-4753-8676-b846e6db927f_1)<br>| &nbsp;&nbsp;&nbsp;&nbsp;2 |
| [Portfolio Commentary](#xx_5a2ac9ca-f747-41c7-a74d-6d88736a88ba_1)<br>| &nbsp;&nbsp;&nbsp;&nbsp;3 |
| [Portfolio of Investments](#xx_c32fba3f-0e3d-4b5b-a9f1-5853fb4d36e6_1)<br>| &nbsp;&nbsp;&nbsp;&nbsp;7 |
| [Statement of Assets and Liabilities](#xx_4442f457-d9ac-41fb-a60c-cddc59369b38_1)<br>| &nbsp;&nbsp;&nbsp;&nbsp;8 |
| [Statement of Operations](#xx_9440f740-f287-4867-a120-70b18df52dcf_1)<br>| &nbsp;&nbsp;&nbsp;&nbsp;9 |
| [Statements of Changes in Net Assets](#xx_b4c68e48-765b-4f41-b342-826d6497f23e_1)<br>| &nbsp;&nbsp;10 |
| [Statement of Cash Flows](#xx_0020a960-8e38-47be-bea7-d5af1185dc33_1)<br>| &nbsp;&nbsp;11 |
| [Financial Highlights](#xx_eaf882d1-40ae-4d1d-8cf9-e41164ab9472_1)<br>| &nbsp;&nbsp;12 |
| [Notes to Financial Statements](#xx_707ac8a7-afd9-4a6e-8b4b-cbfa544d262e_1)<br>| &nbsp;&nbsp;13 |
| [Report of Independent Registered Public Accounting Firm](#xx_31f1b588-f302-4333-84d6-cbcd8d79f02f_1)<br>| &nbsp;&nbsp;18 |
| [Additional Information](#xx_6f943961-e5e8-4761-98b7-4b145af0dd7b_1)<br>| &nbsp;&nbsp;19 |
| [Investment Objectives, Policies, Risks and Effects of Leverage](#xx_bc06572e-674d-4db4-b144-d9f9add98dd5_1)<br>| &nbsp;&nbsp;23 |
| [Board of Trustees and Officers](#xx_7087f6ae-7f89-4ac1-811b-624f635cd2c2_1)<br>| &nbsp;&nbsp;28 |
| [Privacy Policy](#xx_ebefa644-0c60-4002-a152-ce2111eb12a0_1)<br>| &nbsp;&nbsp;30 |

---

**Caution Regarding Forward-Looking Statements**

This report contains certain forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding the goals, beliefs, plans or current expectations of First Trust Advisors L.P. ("First Trust" or the "Advisor") and/or Confluence Investment Management LLC ("Confluence" or the "Sub-Advisor") and their respective representatives, taking into account the information currently available to them. Forward-looking statements include all statements that do not relate solely to current or historical fact. For example, forward-looking statements include the use of words such as "anticipate," "estimate," "intend," "expect," "believe," "plan," "may," "should," "would" or other words that convey uncertainty of future events or outcomes.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of First Trust Specialty Finance and Financial Opportunities Fund (the "Fund") to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. When evaluating the information included in this report, you are cautioned not to place undue reliance on these forward-looking statements, which reflect the judgment of the Advisor and/or Sub-Advisor and their respective representatives only as of the date hereof. We undertake no obligation to publicly revise or update these forward-looking statements to reflect events and circumstances that arise after the date hereof.

**Performance and Risk Disclosure**

There is no assurance that the Fund will achieve its investment objectives. The Fund is subject to market risk, which is the possibility that the market values of securities owned by the Fund will decline and that the value of the Fund's shares may therefore be less than what you paid for them. Accordingly, you can lose money by investing in the Fund. See "Principal Risks" in the Investment Objectives, Policies, Risks and Effects of Leverage section of this report for a discussion of certain other risks of investing in the Fund.

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. For the most recent month-end performance figures, please visit <u>www.ftportfolios.com</u> or speak with your financial advisor. Investment returns, net asset value and common share price will fluctuate and Fund shares, when sold, may be worth more or less than their original cost.

The Advisor may also periodically provide additional information on Fund performance on the Fund's web page at <u>www.ftportfolios.com</u>.

**How to Read This Report**

This report contains information that may help you evaluate your investment in the Fund. It includes details about the Fund and presents data and analysis that provide insight into the Fund's performance and investment approach.

By reading the portfolio commentary by the portfolio management team of the Fund, you may obtain an understanding of how the market environment affected the Fund's performance. The statistical information that follows may help you understand the Fund's performance compared to that of relevant market benchmarks.

It is important to keep in mind that the opinions expressed by personnel of First Trust and Confluence are just that: informed opinions. They should not be considered to be promises or advice. The opinions, like the statistics, cover the period through the date on the cover of this report. The material risks of investing in the Fund are spelled out in the prospectus, the statement of additional information, this report and other Fund regulatory filings.

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

Shareholder Letter

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**Annual Letter from the Chairman and CEO**

**November 30, 2022**

Dear Shareholders,

First Trust is pleased to provide you with the annual report for the First Trust Specialty Finance and Financial Opportunities Fund (the "Fund"), which contains detailed information about the Fund for the twelve months ended November 30, 2022.

The risk of the U.S. economy experiencing a notable recession in 2023 is rising. The Federal Reserve (the "Fed") has remained steadfast in its battle with stubbornly high inflation, most recently raising the Federal Funds target rate (upper bound) from 4.0% to 4.5% on December 13, 2022. The trailing 12-month rate on the Consumer Price Index ("CPI") peaked at 9.1% on June 30, 2022, before falling to 7.1% (its lowest level of the year) on November 30, 2022, according to data from the U.S. Bureau of Labor Statistics. For comparative purposes, the CPI rate has averaged 2.5% over the past 30 years. Some pundits are making the case that the recent drop in the CPI should be enough evidence to sway the Fed from initiating any additional rate hikes. The Fed, however, has reiterated its intent to stay the course until the tightening of monetary policy has grown restrictive enough to normalize inflation. Ultimately, the Fed would like to bring the rate of inflation back to its 2.0% target. How high they will have to take the Federal Funds target rate in order to achieve that goal remains to be seen, but we should know more in the first quarter of 2023.

Suffice it to say, many Americans are struggling to cope with the high rate of inflation and they are not just low wage workers. A recent report by PYMNTS, a research, data aggregation and news website, revealed that roughly 45% of workers earning over $100,000 per year and 28% of those earning over $200,000 per year are living paycheck to paycheck. The personal savings rate in the U.S. has been plummeting, registering quarter-over-quarter declines in each of the last five quarters, according to the U.S. Bureau of Economic Analysis. Everything costs more. Preliminary data shows the savings rate fell from 9.1% in the third quarter of 2021, to just 2.8% in the third quarter of 2022. Rising interest rates are another source of pressure. Housing affordability has fallen to a decade low as mortgage rates have surged along with the Federal Funds rate, according to the National Association of Homebuilders. Home prices, as represented by the S&P CoreLogic Case-Shiller U.S. National Home Price Index, have been slowly declining since June 2022, but need to come down further to offset the spike in mortgage rates, in my opinion. With the housing market softening, job creation, which remains strong, may be one of the few bright spots in the U.S. economy.

We've talked about how higher inflation and interest rates are causing difficulty for many Americans. I'd like to pause here and note that while times are tough, not everything is negative. Take the bond market for example. Yields have not been this attractive for many years. The yield on the 10-Year Treasury Note ("T-Note") has risen 208 basis points year-to-date, climbing from 1.51% on December 31, 2021, to 3.59% on December 19, 2022. For comparative purposes, the yield on the 10-Year T-Note averaged 4.03% for the 30-year period ended December 31, 2021. As yields normalize and bond prices fall, investors seeking current income should keep a watchful eye for an attractive entry point, in my opinion. Furthermore, while the equity markets have moved in and out of bear market territory (a bear market is defined as a price decline of 20% or more from a security or index's recent high) in 2022, equity strategists are predicting a relatively flat market next year, based on estimates from a December 2022 Bloomberg survey for S&P 500<sup>®</sup> Index forecasts. For some investors, if growth is going to be tough to come by, perhaps stock dividends may be an avenue worth pursuing. In closing, I believe that the markets could be in for a bumpy ride in the first half of 2023, but I am more optimistic about the prospects for the latter half. Stay tuned!

Thank you for giving First Trust the opportunity to play a role in your financial future. We value our relationship with you and will report on the Fund again in six months.

Sincerely,

![](imge3b54d524.jpg)

James A. Bowen

Chairman of the Board of Trustees

Chief Executive Officer of First Trust Advisors L.P.

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**"AT A GLANCE"** 

**As of November 30, 2022 (Unaudited)**

---

| | |
|:---|:---|
| **Fund Statistics** |  |
| Symbol on New York Stock Exchange | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FGB |
| Common Share Price | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$3.49 |
| Common Share Net Asset Value ("NAV") | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$3.73 |
| Premium (Discount) to NAV | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6.43)% |
| Net Assets Applicable to Common Shares | $53603804 |
| Current Quarterly Distribution per Common Share<sup>(1)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$0.0825 |
| Current Annualized Distribution per Common Share | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$0.3300 |
| Current Distribution Rate on Common Share Price<sup>(2)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.46% |
| Current Distribution Rate on NAV<sup>(2)</sup> | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.85% |

---

**Common Share Price & NAV (weekly closing price)**

![](imgeb0217405.jpg)

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Performance** |  |  |  |  |
|  |  | &nbsp;&nbsp;Average Annual Total Returns | &nbsp;&nbsp;Average Annual Total Returns | &nbsp;&nbsp;Average Annual Total Returns |
|  | &nbsp;&nbsp;1 Year Ended<br> 11/30/22 | 5 Years Ended<br> 11/30/22 | 10 Years Ended<br> 11/30/22 | &nbsp;&nbsp;Inception (5/25/07)<br> to 11/30/22 |
| **Fund Performance<sup>(3)</sup>** |  |  |  |  |
| NAV | &nbsp;&nbsp;-5.60% | -0.50% | &nbsp;&nbsp;&nbsp;&nbsp;2.55% | &nbsp;&nbsp;-0.04% |
| Market Value | &nbsp;&nbsp;-4.39% | &nbsp;&nbsp;-1.70% | &nbsp;&nbsp;&nbsp;&nbsp;1.59% | &nbsp;&nbsp;-0.77% |
| **Index Performance** |  |  |  |  |
| Blended Benchmark<sup>(4)</sup> | &nbsp;&nbsp;-4.80% | &nbsp;&nbsp;&nbsp;5.95% | &nbsp;&nbsp;&nbsp;&nbsp;6.89% | &nbsp;&nbsp;&nbsp;&nbsp;N/A |
| MSCI U.S. Investable Market Financials Index<sup>(5)</sup> | &nbsp;&nbsp;-6.26% | &nbsp;&nbsp;&nbsp;4.97% | 10.22% | &nbsp;&nbsp;&nbsp;&nbsp;N/A |

---

---

| | |
|:---|:---|
| **Asset Classification** | &nbsp;&nbsp;**% of Total<br> Investments** |
| Common Stocks - Business Development Companies | &nbsp;&nbsp;&nbsp;91.5% |
| Common Stocks | &nbsp;&nbsp;&nbsp;&nbsp;4.6 |
| Real Estate Investment Trusts (REITs) | &nbsp;&nbsp;&nbsp;&nbsp;3.2 |
| Exchange-Traded Funds | &nbsp;&nbsp;&nbsp;&nbsp;0.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | &nbsp;&nbsp;100.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
| **Industry Classification** | &nbsp;&nbsp;**% of Total<br> Investments** |
| Capital Markets | &nbsp;&nbsp;&nbsp;92.3% |
| Mortgage Real Estate Investment Trusts | &nbsp;&nbsp;&nbsp;&nbsp;3.2 |
| Diversified Financial Services | &nbsp;&nbsp;&nbsp;&nbsp;2.3 |
| Insurance | &nbsp;&nbsp;&nbsp;&nbsp;2.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | &nbsp;&nbsp;100.0% |

---

---

| | |
|:---|:---|
| **Top Ten Holdings** | &nbsp;&nbsp;**% of Total<br> Investments** |
| Ares Capital Corp. | &nbsp;&nbsp;&nbsp;7.9% |
| Hercules Capital, Inc. | &nbsp;&nbsp;&nbsp;7.7 |
| BlackRock TCP Capital Corp. | &nbsp;&nbsp;&nbsp;7.1 |
| Main Street Capital Corp. | &nbsp;&nbsp;&nbsp;6.8 |
| New Mountain Finance Corp. | &nbsp;&nbsp;&nbsp;6.7 |
| PennantPark Investment Corp. | &nbsp;&nbsp;&nbsp;6.5 |
| Barings BDC, Inc. | &nbsp;&nbsp;&nbsp;5.8 |
| Golub Capital BDC, Inc. | &nbsp;&nbsp;&nbsp;5.6 |
| OFS Capital Corp. | &nbsp;&nbsp;&nbsp;4.5 |
| Sixth Street Specialty Lending, Inc. | &nbsp;&nbsp;&nbsp;4.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | &nbsp;&nbsp;63.1% |

---

<sup>(1)</sup> Most recent distribution paid or declared through November 30, 2022. Subject to change in the future.

<sup>(2)</sup> Distribution rates are calculated by annualizing the most recent distribution paid or declared through the report date and then dividing by Common Share Price or NAV, as applicable, as of November 30, 2022. Subject to change in the future.

<sup>(3)</sup> Total return is based on the combination of reinvested dividend, capital gain, and return of capital distributions, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance is not indicative of future results.

<sup>(4)</sup> The Blended Benchmark consists of a 70/20/10 blend of the MVIS U.S. Business Development Companies Index, the FTSE NARIET Mortgage REIT Index and the S&P SmallCap Financials Index. The Blended Benchmark return is calculated by using the monthly return of the three indices during each period shown above. At the beginning of each month, the three indices are rebalanced, to account for divergence from that ratio that occurred during the course of each month to the ratios noted above. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Benchmark for each period shown above. Since the MVIS U.S. Business Development Companies Index had an inception date of August 4, 2011, the performance of the Blended Benchmark is not available for all of the periods disclosed.

<sup>(5)</sup> Because the index has an inception date of June 5, 2007, performance data is not available for all the periods shown in the table.

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Portfolio Commentary** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**Annual Report**

**November 30, 2022 (Unaudited)**

**Advisor**

First Trust Advisors L.P. ("First Trust" or the "Advisor") serves as the investment advisor to the First Trust Specialty Finance and Financial Opportunities Fund (the "Fund"). First Trust is responsible for the ongoing monitoring of the Fund's investment portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund.

**Sub-Advisor**

Confluence Investment Management LLC, a registered investment advisor ("Confluence" or the "Sub-Advisor"), located in St. Louis, Missouri, serves as the sub-advisor to the Fund. The investment professionals at Confluence have an average of over 20 years of portfolio management experience each. Confluence professionals have invested in a wide range of specialty finance and other financial company securities during various market cycles, working to provide attractive risk-adjusted returns to clients.

**Confluence Portfolio Management Team**

**Mark Keller, CFA**

**Chief Executive Officer and Chief Investment Officer**

**David Miyazaki, CFA**

**Senior Vice President and Portfolio Manager**

**Daniel Winter, CFA**

**Senior Vice President and Chief Investment Officer - Value Equity**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

The primary investment objective of the Fund is to seek a high level of current income. As a secondary objective, the Fund seeks an attractive total return. The Fund pursues its investment objectives by investing, under normal market conditions, at least 80% of its Managed Assets in a portfolio of securities of specialty finance and other financial companies that the Fund's Sub-Advisor believes offer attractive opportunities for income and capital appreciation. Under normal market conditions, the Fund concentrates its investments in securities of companies within the industries in the financial sector. "Managed Assets" means the total asset value of the Fund minus the sum of its liabilities, other than the principal amount of borrowings. There can be no assurance that the Fund's investment objectives will be achieved. The Fund may not be appropriate for all investors.

**Market Recap**

The Fund is a financial sector fund with a particular focus on a niche called business development companies ("BDCs"). BDCs lend to, and invest in, private companies, oftentimes working with those not large enough to efficiently access the public markets. Each BDC has a unique profile, determined by its respective management team. Some specialize in particular industries, while others apply a more generalized approach and maintain a diversified portfolio. Both approaches can work effectively and offer shareholders a unique and differentiated return opportunity derived from the private markets.

During the 12-month period ended November 30, 2022, the Fund had approximately 91% of its assets invested in 21 BDCs. The balance of the Fund's assets was invested in mortgage-backed real estate investment trusts ("MBS REITs") and other financial sector companies.

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Portfolio Commentary (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**Annual Report**

**November 30, 2022 (Unaudited)**

**Performance Analysis**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  |  | &nbsp;&nbsp;Average Annual Total Returns | &nbsp;&nbsp;Average Annual Total Returns | &nbsp;&nbsp;Average Annual Total Returns |
|  | &nbsp;&nbsp;1 Year Ended<br> 11/30/22 | 5 Years Ended<br> 11/30/22 | 10 Years Ended<br> 11/30/22 | &nbsp;&nbsp;Inception (5/25/07)<br> to 11/30/22 |
| **Fund Performance<sup>(1)</sup>** |  |  |  |  |
| NAV | &nbsp;&nbsp;-5.60% | -0.50% | &nbsp;&nbsp;&nbsp;&nbsp;2.55% | &nbsp;&nbsp;-0.04% |
| Market Value | &nbsp;&nbsp;-4.39% | &nbsp;&nbsp;-1.70% | &nbsp;&nbsp;&nbsp;&nbsp;1.59% | &nbsp;&nbsp;-0.77% |
| **Index Performance** |  |  |  |  |
| Blended Benchmark<sup>(2)</sup> | &nbsp;&nbsp;-4.80% | &nbsp;&nbsp;&nbsp;5.95% | &nbsp;&nbsp;&nbsp;&nbsp;6.89% | &nbsp;&nbsp;&nbsp;&nbsp;N/A |
| MSCI U.S. Investable Market Financials Index<sup>(3)</sup> | &nbsp;&nbsp;-6.26% | &nbsp;&nbsp;&nbsp;4.97% | 10.22% | &nbsp;&nbsp;&nbsp;&nbsp;N/A |

---

![](imgf84cf9616.jpg)

Performance figures assume reinvestment of all distributions and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption or sale of Fund shares. An index is a statistical composite that tracks a specified financial market or sector. Unlike the Fund, the indices do not actually hold a portfolio of securities and therefore do not incur the expenses incurred by the Fund. These expenses negatively impact the performance of the Fund. The Fund's past performance does not predict future performance.

For the 12-month period ended November 30, 2022, the Fund's market value total price return was slightly higher than that of the Blended Benchmark, while the Fund's net asset value ("NAV") total return was lower. The Fund uses leverage because we believe that, over time, leverage provides opportunities for additional income and total return for common shareholders. However, the use of leverage exposes common shareholders to additional volatility. For example, as the prices of securities held by the Fund decline, the negative impact of valuation changes on Common Share NAV and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance Common Share returns during periods when the prices of securities held by the Fund are generally rising. For the performance referenced above, the use of leverage had a positive impact on returns.

The Fund has a practice of seeking to maintain a relatively stable monthly distribution, which may be changed at any time. The practice has no impact on the Fund's investment strategy and may reduce the Fund's NAV. However, the Advisor believes the practice helps maintain the Fund's competitiveness and may benefit the Fund's market price and premium/discount to the Fund's NAV. The quarterly distribution rate began and ended the period at $0.0825 per share. Based on the $0.0825 per share quarterly distribution, the

<sup>(1)</sup> Total return is based on the combination of reinvested dividend, capital gain and return of capital distribution, if any, at prices obtained by the Dividend Reinvestment Plan and changes in NAV per share for NAV returns and changes in Common Share Price for market value returns. Total returns do not reflect sales load and are not annualized for period of less than one year. Past performance is not indicative of future results.

<sup>(2)</sup> The Blended Benchmark consists of a 70/20/10 blend of the MVIS U.S. Business Development Companies Index, the FTSE NARIET Mortgage REIT Index and the S&P SmallCap Financials Index. The Blended Benchmark returns are calculated by using the monthly return of the three indices during each period shown above. At the beginning of each month, the three indices are rebalanced, to account for divergence from that ratio that occurred during the course of each month to the ratios noted above. The monthly returns are then compounded for each period shown above, giving the performance for the Blended Benchmark for each period shown above. Since the MVIS U.S. Business Development Companies Index had an inception date of August 4, 2011, the performance of the Blended Benchmark is not available for all of the periods disclosed.

<sup>(3)</sup> Because the index has an inception date of June 5, 2007, performance data is not available for all the periods shown in the table.

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Portfolio Commentary (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**Annual Report**

**November 30, 2022 (Unaudited)**

annualized distribution rate at November 30, 2022 was 8.85% at NAV and 9.46% at market price. For the 12-month period ended November 30, 2022, 84.56% of the distributions were characterized as ordinary income and 15.44% of the distributions were characterized as return of capital. The final determination of the source and tax status of all 2022 distributions will be made after the end of 2022 and will be provided on Form 1099-DIV. The foregoing is not to be construed as tax advice. Please consult your tax advisor for further information regarding tax matters.

The 12-month period ended November 30, 2022 saw the Fund generally start off on the right foot. The economy was continuing to move forward from the pandemic, interest rates were low, and market sentiment was constructive. Inflation was running high, but the Federal Reserve (the "Fed") characterized rising price trends as transitory. But then as we entered 2022, the Fed's narrative began to change and, rather suddenly, the need to address inflation became a priority. The Fed telegraphed tighter policy and began raising short-term rates, steadily becoming more aggressive as inflation remained stubbornly high. Across a wide swath of asset classes, investors were surprised, given the apparent departure from the Fed's unwritten protocol in recent decades to tighten gradually and with substantial forward warning. Accordingly, stock market valuations declined in volatile form, while the bond market delivered some of the worst returns of the past 30 years.

BDCs were not immune to the negative sentiment, but the performance of their stocks was comparatively tame. We believe two factors helped form the pathway for lower volatility and better returns. The first is related to BDC valuations, which were below longer-term averages when the Fed first began to tighten. Lower valuations often help mitigate negative market conditions and unfortunately many other segments of the market didn't have this help during the year. The second factor came from the stable operating fundamentals of the BDC industry. Most BDCs had ample liquidity, low nonaccruals, and substantial investments in floating rate loans, which provided rising levels of income as the Fed tightened.

The positive operating results, which included numerous dividend increases, often helped to offset some of the market's rising anxiety regarding Fed policy. Thus, we believe the combination of lower valuations and stable fundamentals positioned BDC stocks to avoid some of the very low returns and high volatility of the broader market, and these benefits flowed into the Fund during the period.

The Fund also remained underweight in its exposure to MBS REITs. Coming into 2022, we had concerns about narrow MBS spreads, declining industry profitability, and high levels of mortgage prepayment uncertainty. Our caution was indeed well-placed, because as the Fed applied its tighter policy, MBS spreads widened, NAVs declined, and valuations plumbed levels well below historical averages. Although the industry's return/risk profile improved as the period progressed, we limited the allocation due to ongoing uncertainty in the mortgage market.

The relatively small allocation to large capitalization ("cap") financials continued to provide diversification, liquidity, and growth opportunities for the Fund. While these investments don't have the higher yield profile of BDCs or MBS REITs, their potential for capital appreciation may help with positive NAV accretion. In addition to these investments, a small exposure to long-term Treasuries was added in the middle of the period to help manage the Fund's leverage during times of high volatility.

**Market and Fund Outlook**

Over the course of 12-month period ended November 30, 2022, the elephant in the room has been the Fed and its decision to prioritize inflation control. We find it wise not to second-guess the Fed nor try to predict its future decisions. Instead, we focus on how policy is changing the economic and financial landscape. Regardless of how far and long the Fed tightens, we know rapidly rising rates have consequences and will alter return/risk profiles across almost all asset classes.

Higher interest rates were generally very helpful to BDCs over the past fiscal year. The industry had positioned itself in a high proportion of floating rate assets, while locking in much of its borrowing at long-term, fixed rates. As a result, when interest rates rose, so did the profitability of many BDCs.

The offset to this rising profitability is the potential for rising credit issues. The borrowers to whom BDCs lend—mostly small to mid-sized, private companies—now face rising interest payments, which have the potential to squeeze operating margins. These same borrowers have already had to deal with inflation, tight labor markets, and supply-chain interruptions, so higher interest expenses going into a slower-growth economy aren't exactly helpful. Nonaccruals have been relatively low and, so far, generally manageable. As we look forward, we see the potential for higher returns from BDCs but also the possibility of higher risk.

For MBS REITs, it appears the challenging environment is likely to continue, given the uncertainty of the Fed regarding not only its plans for short-term interest rates but also how it will wind down its MBS portfolio. The sheer size of the Fed's portfolio could cast quite a shadow on the MBS market and create volatility in spreads and liquidity. On the upside, much of this risk appears priced into

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Portfolio Commentary (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**Annual Report**

**November 30, 2022 (Unaudited)**

MBS REIT valuations, which have become more attractive. We will continue to monitor conditions and may opportunistically increase the allocation to this industry.

The allocation to large cap financials helps create the potential to capture returns through capital appreciation, which would be additive to the Fund's NAV. These companies retain most or all of their earnings, making their return profiles much different than BDCs or MBS REITs. The nature of their business helps diversify the Fund's focus on the Financials sector. Although this allocation is likely to remain somewhat limited in scope, we believe it provides a good complement to other investments that are more income-oriented.

It is our pleasure to manage FGB. Its unique focus on BDCs provides investors a way to participate in the private middle market, while also capturing a high level of alternative investment income.

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**Portfolio of Investments** 

**November 30, 2022**

---

| | | |
|:---|:---|:---|
| **Shares** | **Description** | **Value** |
| **COMMON STOCKS – BUSINESS DEVELOPMENT<br> COMPANIES - 106.2%** | **COMMON STOCKS – BUSINESS DEVELOPMENT<br> COMPANIES - 106.2%** | **COMMON STOCKS – BUSINESS DEVELOPMENT<br> COMPANIES - 106.2%** |
|  | **Capital Markets – 106.2%** |  |
| 250000 | Ares Capital Corp. (a) | $4912500 |
| 390000 | Barings BDC, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3584100 |
| 332000 | BlackRock TCP Capital Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4408960 |
| &nbsp;&nbsp;89500 | Blackstone Secured Lending Fund (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2142630 |
| &nbsp;&nbsp;71000 | Capital Southwest Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1287940 |
| &nbsp;&nbsp;26000 | Crescent Capital BDC, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;363480 |
| &nbsp;&nbsp;75000 | First Eagle Alternative Capital BDC, Inc. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;331500 |
| &nbsp;&nbsp;38500 | FS KKR Capital Corp. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;764610 |
| 135000 | Goldman Sachs BDC, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2091150 |
| 250000 | Golub Capital BDC, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3500000 |
| 340000 | Hercules Capital, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4814400 |
| 111000 | Main Street Capital Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4244640 |
| 328000 | New Mountain Finance Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4188560 |
| 268000 | OFS Capital Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2789880 |
| 150000 | Owl Rock Capital Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1936500 |
| 656000 | PennantPark Investment Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4067200 |
| &nbsp;&nbsp;14551 | PhenixFIN Corp. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;498372 |
| &nbsp;&nbsp;44000 | Portman Ridge Finance Corp. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;977240 |
| 147000 | Sixth Street Specialty Lending, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2769480 |
| 161000 | SLR Investment Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2379580 |
| 197000 | Stellus Capital Investment Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2677230 |
| &nbsp;&nbsp;78000 | Trinity Capital, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;847860 |
| 105000 | TriplePoint Venture Growth BDC Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1358700 |
|  | **Total Common Stocks - Business Development Companies** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56936512 |
|  | (Cost $65,096,049) |  |
| **COMMON STOCKS – 5.3%** | **COMMON STOCKS – 5.3%** | **COMMON STOCKS – 5.3%** |
|  | **Diversified Financial Services – 2.7%** |  |
| &nbsp;&nbsp;&nbsp;4500 | Berkshire Hathaway, Inc., Class B (a) (b) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1433700 |
|  | **Insurance – 2.6%** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;150 | Markel Corp. (b) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;198726 |
| &nbsp;&nbsp;11000 | Prudential Financial, Inc. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1188330 |
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1387056 |
|  | **Total Common Stocks** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2820756 |
|  | (Cost $1,888,449) |  |
| **REAL ESTATE INVESTMENT TRUSTS – 3.7%** | **REAL ESTATE INVESTMENT TRUSTS – 3.7%** | **REAL ESTATE INVESTMENT TRUSTS – 3.7%** |
|  | **Mortgage Real Estate<br> Investment Trusts – 3.7%** |  |
| 110000 | AGNC Investment Corp. (a) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1098900 |

---

---

| | | |
|:---|:---|:---|
| **Shares** | **Description** | **Value** |
|  | **Mortgage Real Estate<br> Investment Trusts (Continued)** |  |
| 41250 | Annaly Capital Management, Inc. (a) | $893887 |
|  | **Total Real Estate Investment Trusts** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1992787 |
|  | (Cost $2,812,872) |  |
| **EXCHANGE-TRADED FUNDS – 0.8%** | **EXCHANGE-TRADED FUNDS – 0.8%** | **EXCHANGE-TRADED FUNDS – 0.8%** |
|  | **Capital Markets – 0.8%** |  |
| &nbsp;&nbsp;5000 | PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;455800 |
|  | (Cost $537,206) |  |
|  | **Total Investments – 116.0%** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62205855 |
|  | (Cost $70,334,576) |  |
|  | **Outstanding Loan – (16.0)%** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8600000) |
|  | **Net Other Assets and Liabilities – (0.0)%** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2051) |
|  | **Net Assets – 100.0%** | $53603804 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

(a) All
 or a portion of this security serves as collateral on the outstanding loan.

(b) Non-income
 producing security.

------

**Valuation Inputs**

A summary of the inputs used to value the Fund's investments as of November 30, 2022 is as follows (see Note 2A - Portfolio Valuation in the Notes to Financial Statements):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Total<br> Value at<br> 11/30/2022** | &nbsp;&nbsp;**Level 1<br> Quoted<br> Prices** | **Level 2<br> Significant<br> Observable<br> Inputs** | **Level 3<br> Significant<br> Unobservable<br> Inputs** |
| Common Stocks - Business Development Companies\* | $56936512 | &nbsp;&nbsp;$56936512 | $— | $— |
| Common Stocks\* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2820756 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2820756 | &nbsp;&nbsp;&nbsp;&nbsp; — | &nbsp;&nbsp;&nbsp;&nbsp; — |
| Real Estate Investment Trusts\* | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1992787 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1992787 | &nbsp;&nbsp;&nbsp;&nbsp; — | &nbsp;&nbsp;&nbsp;&nbsp; — |
| Exchange-Traded Funds | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 455800 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 455800 | &nbsp;&nbsp;&nbsp;&nbsp; — | &nbsp;&nbsp;&nbsp;&nbsp; — |
| Total Investments | $62205855 | &nbsp;&nbsp;$62205855 | $— | $— |

---

&nbsp;&nbsp;&nbsp;&nbsp;

\* See Portfolio of Investments for industry breakout.

See Notes to Financial Statements

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**Statement of Assets and Liabilities** 

**November 30, 2022**

---

| | |
|:---|:---|
| **ASSETS:** |  |
| Investments, at value<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Cost $70,334,576)<br>| $62205855 |
| Cash<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1242197 |
| Foreign currency (Cost $26)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20 |
| Dividends receivable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;106070 |
| Prepaid expenses<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2964 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Assets<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;63557106 |
| **LIABILITIES:** |  |
| Outstanding loan<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8600000 |
| Payables: |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Distributions<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1185326 |
| &nbsp;&nbsp;&nbsp;&nbsp; Audit and tax fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;59253 |
| &nbsp;&nbsp;&nbsp;&nbsp; Investment advisory fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51002 |
| &nbsp;&nbsp;&nbsp;&nbsp; Interest and fees on loan<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;35883 |
| &nbsp;&nbsp;&nbsp;&nbsp; Shareholder reporting fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12411 |
| &nbsp;&nbsp;&nbsp;&nbsp; Trustees' fees and expenses<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3059 |
| &nbsp;&nbsp;&nbsp;&nbsp; Administrative fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2436 |
| &nbsp;&nbsp;&nbsp;&nbsp; Transfer agent fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1531 |
| &nbsp;&nbsp;&nbsp;&nbsp; Custodian fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;819 |
| &nbsp;&nbsp;&nbsp;&nbsp; Financial reporting fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;771 |
| &nbsp;&nbsp;&nbsp;&nbsp; Legal fees<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;684 |
| Other liabilities<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;127 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9953302 |
| **NET ASSETS<br>**  | $53603804 |
| **NET ASSETS consist of:** |  |
| Paid-in capital<br>| $112585487 |
| Par value<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;143676 |
| Accumulated distributable earnings (loss)<br>| &nbsp;&nbsp;&nbsp;&nbsp;(59125359) |
| **NET ASSETS<br>**  | $53603804 |
| **NET ASSET VALUE, per Common Share (par value $0.01 per Common Share)<br>**  | $3.73 |
| Number of Common Shares outstanding (unlimited number of Common Shares has been authorized)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14367591 |

---

See Notes to Financial Statements

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**Statement of Operations** 

**For the Year Ended November 30, 2022**

---

| | |
|:---|:---|
| **INVESTMENT INCOME:** |  |
| Dividends | &nbsp;&nbsp;$4931921 |
| Interest | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2352 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total investment income | &nbsp;&nbsp;&nbsp;&nbsp;4934273 |
| **EXPENSES:** |  |
| Investment advisory fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 669188 |
| Interest and fees on loan | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 286532 |
| Audit and tax fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 58216 |
| Shareholder reporting fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 43672 |
| Administrative fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25325 |
| Listing expense | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 23752 |
| Transfer agent fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 19872 |
| Trustees' fees and expenses | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18999 |
| Financial reporting fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9250 |
| Legal fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5487 |
| Custodian fees | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5388 |
| Other | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10271 |
| &nbsp;&nbsp;&nbsp;&nbsp; Total expenses | &nbsp;&nbsp;&nbsp;&nbsp;1175952 |
| **NET INVESTMENT INCOME (LOSS)<br>** | &nbsp;&nbsp;&nbsp;&nbsp;3758321 |
| **NET REALIZED AND UNREALIZED GAIN (LOSS):** |  |
| Net realized gain (loss) on investments | &nbsp;&nbsp;&nbsp;&nbsp;(2032454) |
| Net change in unrealized appreciation (depreciation) on investments | &nbsp;&nbsp;&nbsp;&nbsp;(5577903) |
| **NET REALIZED AND UNREALIZED GAIN (LOSS)<br>** | &nbsp;&nbsp;&nbsp;&nbsp;(7610357) |
| **NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS<br>** | &nbsp;&nbsp;$(3852036) |

---

See Notes to Financial Statements

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**Statements of Changes in Net Assets** 

---

| | | |
|:---|:---|:---|
|  | **Year<br> Ended<br> 11/30/2022** | &nbsp;&nbsp;**Year<br> Ended<br> 11/30/2021** |
| **OPERATIONS:** |  |  |
| Net investment income (loss)<br>| $3758321 | $3774004 |
| Net realized gain (loss)<br>| &nbsp;&nbsp;&nbsp; (2032454) | &nbsp;&nbsp;&nbsp;&nbsp; 1419539 |
| Net change in unrealized appreciation (depreciation)<br>| &nbsp;&nbsp;&nbsp; (5577903) | &nbsp;&nbsp;&nbsp;&nbsp; 12307561 |
| Net increase (decrease) in net assets resulting from operations<br>| &nbsp;&nbsp;&nbsp;&nbsp;(3852036) | &nbsp;&nbsp;&nbsp;&nbsp;17501104 |
| **DISTRIBUTIONS TO SHAREHOLDERS FROM:** |  |  |
| Investment operations<br>| &nbsp;&nbsp;&nbsp; (4009322) | &nbsp;&nbsp;&nbsp;&nbsp; (4336550) |
| Return of capital<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (731983) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (404755) |
| Total distributions to shareholders<br>| &nbsp;&nbsp;&nbsp;&nbsp;(4741305) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4741305) |
| Total increase (decrease) in net assets<br>| &nbsp;&nbsp;&nbsp; (8593341) | &nbsp;&nbsp;&nbsp;&nbsp; 12759799 |
| **NET ASSETS:** |  |  |
| Beginning of period<br>| &nbsp;&nbsp;&nbsp; 62197145 | &nbsp;&nbsp;&nbsp;&nbsp; 49437346 |
| End of period<br>| $53603804 | $62197145 |
| **COMMON SHARES:** |  |  |
| Common Shares at end of period<br>| &nbsp;&nbsp;&nbsp;&nbsp;14367591 | &nbsp;&nbsp;&nbsp;&nbsp;14367591 |

---

See Notes to Financial Statements

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**Statement of Cash Flows** 

**For the Year Ended November 30, 2022**

---

| | | |
|:---|:---|:---|
| **Cash flows from operating activities:** |  |  |
| Net increase (decrease) in net assets resulting from operations<br>| $(3852036) |  |
| Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of investments<br>| &nbsp;&nbsp;&nbsp;(3698785) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales, maturities and paydown of investments<br>| &nbsp;&nbsp;&nbsp;&nbsp;3191091 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Return of capital and realized gain distributions received from investments<br>| &nbsp;&nbsp;&nbsp;&nbsp;1208334 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net realized gain/loss on investments <br>| &nbsp;&nbsp;&nbsp;&nbsp;2032454 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net change in unrealized appreciation/depreciation on investments <br>| &nbsp;&nbsp;&nbsp;&nbsp;5577903 |  |
| **Changes in assets and liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in dividends receivable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;79541 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in prepaid expenses<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1729 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in interest and fees payable on loan<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7203 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in investment advisory fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9444) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in audit and tax fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(249) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in legal fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(616) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in shareholder reporting fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(205) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in administrative fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(374) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in custodian fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decrease in transfer agent fees payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(848) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in trustees' fees and expenses payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;570 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in other liabilities payable<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;127 |  |
| **Cash provided by operating activities<br>**  |  | &nbsp;&nbsp;$4536386 |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distributions to Common Shareholders from investment operations<br>| &nbsp;&nbsp;&nbsp;(4009322) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distributions to Common Shareholders from return of capital<br>| &nbsp;&nbsp;&nbsp;&nbsp;(731983) |  |
| **Cash used in financing activities<br>**  |  | &nbsp;&nbsp;&nbsp;&nbsp;(4741305) |
| Decrease in cash and foreign currency <br>|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(204919) |
| Cash and foreign currency at beginning of period<br>|  | &nbsp;&nbsp;&nbsp;&nbsp;1447136 |
| **Cash and foreign currency at end of period<br>**  |  | &nbsp;&nbsp;$1242217 |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid during the period for interest and fees <br>|  | &nbsp;&nbsp;$279329 |

---

See Notes to Financial Statements

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**Financial Highlights** 

**For a Common Share outstanding throughout each period**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Year Ended November 30,** | **Year Ended November 30,** | **Year Ended November 30,** | **Year Ended November 30,** | **Year Ended November 30,** |
| | **2022** | **2021** | **2020** | **2019** | &nbsp;&nbsp;&nbsp;&nbsp;**2018** |
| Net asset value, beginning of period<br>| $4.33 | $3.44 | $5.92 | $5.78 | &nbsp;&nbsp;&nbsp;&nbsp;$6.42 |
| **Income from investment operations:** |  |  |  |  |  |
| Net investment income (loss)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.26 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.26 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.33 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.58 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.66 |
| Net realized and unrealized gain (loss)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.53) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.96 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.37) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.22 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.60) |
| Total from investment operations<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.27) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.22 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.04) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.80 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.06 |
| **Distributions paid to shareholders from:** |  |  |  |  |  |
| Net investment income<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.28) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.30) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.44) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.40) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.63) |
| Return of capital<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.05) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.03) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.26) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.07) |
| Total distributions paid to Common Shareholders<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.33) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.33) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.44) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.66) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.70) |
| Net asset value, end of period<br>| $3.73 | &nbsp;&nbsp;&nbsp;&nbsp;$4.33 | &nbsp;&nbsp;&nbsp;&nbsp;$3.44 | &nbsp;&nbsp;&nbsp;&nbsp;$5.92 | &nbsp;&nbsp;&nbsp;&nbsp;$5.78 |
| Market value, end of period<br>| $3.49 | &nbsp;&nbsp;&nbsp;&nbsp;$4.00 | &nbsp;&nbsp;&nbsp;&nbsp;$3.28 | &nbsp;&nbsp;&nbsp;&nbsp;$5.90 | &nbsp;&nbsp;&nbsp;&nbsp;$6.07 |
| **Total return based on net asset value (a)<br>**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5.60)% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;36.49% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34.67)% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.58% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.09% |
| **Total return based on market value (a)<br>**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4.39)% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32.23% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(37.49)% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.74% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.83% |
| **Ratios to average net assets/supplemental data:** |  |  |  |  |  |
| Net assets, end of period (in 000's)<br>| $53604 | &nbsp;&nbsp;&nbsp;&nbsp;$62197 | &nbsp;&nbsp;&nbsp;&nbsp;$49437 | &nbsp;&nbsp;&nbsp;&nbsp;$85054 | &nbsp;&nbsp;&nbsp;&nbsp;$82960 |
| Ratio of total expenses to average net assets<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.02% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.78% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.35% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.56% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.38% |
| Ratio of total expenses to average net assets excluding interest expense<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.53% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.49% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.78% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.60% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.58% |
| Ratio of net investment income (loss) to average net assets<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.44% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.35% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.87% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.95% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.79% |
| Portfolio turnover rate<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12% |
| **Indebtedness:** |  |  |  |  |  |
| Total loan outstanding (in 000's)<br>| $8600 | &nbsp;&nbsp;&nbsp;&nbsp;$8600 | &nbsp;&nbsp;&nbsp;&nbsp;$6500 | &nbsp;&nbsp;&nbsp;&nbsp;$25000 | &nbsp;&nbsp;&nbsp;&nbsp;$25000 |
| Asset coverage per $1,000 of indebtedness (b)<br>| $7233 | $8232 | $8606 | $4402 | &nbsp;&nbsp;&nbsp;&nbsp;$4318 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

(a) Total
 return is based on the combination of reinvested dividend, capital gain and return of capital distributions, if any, at prices obtained
 by the Dividend Reinvestment Plan, and changes in net asset value per share for net asset value returns and changes in Common Share Price
 for market value returns. Total returns do not reflect sales load and are not annualized for periods of less than one year. Past performance
 is not indicative of future results.

(b) Calculated
 by subtracting the Fund's total liabilities (not including the loan outstanding) from the Fund's total assets, and dividing
 by the outstanding loan balance in 000's.

See Notes to Financial Statements

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Notes to Financial Statements** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022**

1. Organization

First Trust Specialty Finance and Financial Opportunities Fund (the "Fund") is a diversified, closed-end management investment company organized as a Massachusetts business trust on March 20, 2007, and is registered with the Securities and Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund trades under the ticker symbol "FGB" on the New York Stock Exchange ("NYSE").

The primary investment objective of the Fund is to seek a high level of current income. As a secondary objective, the Fund seeks an attractive total return. The Fund pursues its investment objectives by investing, under normal market conditions, at least 80% of its Managed Assets in a portfolio of securities of specialty finance and other financial companies that Confluence Investment Management LLC ("Confluence" or the "Sub-Advisor") believes offer attractive opportunities for income and capital appreciation. Under normal market conditions, the Fund concentrates its investments in securities of companies within industries in the financial sector. "Managed Assets" means the total asset value of the Fund minus the sum of its liabilities, other than the principal amount of borrowings. There can be no assurance that the Fund will achieve its investment objectives. The Fund may not be appropriate for all investors.

2. Significant Accounting Policies

The Fund is considered an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, "Financial Services-Investment Companies." The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

A. Portfolio Valuation

The net asset value ("NAV") of the Common Shares of the Fund is determined daily as of the close of regular trading on the NYSE, normally 4:00 p.m. Eastern time, on each day the NYSE is open for trading. If the NYSE closes early on a valuation day, the NAV is determined as of that time. Foreign securities are priced using data reflecting the earlier closing of the principal markets for those securities. The Fund's NAV per Common Share is calculated by dividing the value of all assets of the Fund (including accrued interest and dividends), less all liabilities (including accrued expenses, dividends declared but unpaid and any borrowings of the Fund), by the total number of Common Shares outstanding.

The Fund's investments are valued daily at market value or, in the absence of market value with respect to any portfolio securities, at fair value. Market value prices represent readily available market quotations such as last sale or official closing prices from a national or foreign exchange (i.e., a regulated market) and are primarily obtained from third-party pricing services. Fair value prices represent any prices not considered market value prices and are either obtained from a third-party pricing service or are determined by the Pricing Committee of the Fund's investment advisor, First Trust Advisors L.P. ("First Trust" or the "Advisor"), in accordance with valuation procedures approved by the Fund's Board of Trustees, and in accordance with provisions of the 1940 Act and rules thereunder. Investments valued by the Advisor's Pricing Committee, if any, are footnoted as such in the footnotes to the Portfolio of Investments. The Fund's investments are valued as follows:

Common stocks, real estate investment trusts ("REITs"), and other equity securities listed on any national or foreign exchange (excluding The Nasdaq Stock Market LLC ("Nasdaq") and the London Stock Exchange Alternative Investment Market ("AIM")) are valued at the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price. Securities traded on more than one securities exchange are valued at the last sale price or official closing price, as applicable, at the close of the securities exchange representing the primary exchange for such securities.

Securities traded in an over-the-counter market are valued at the mean of their most recent bid and asked price, if available, and otherwise at their last trade price.

Certain securities may not be able to be priced by pre-established pricing methods. Such securities may be valued by the Advisor's Pricing Committee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act of 1933, as amended) for which a third-party pricing service is unable to provide a market price; securities whose trading has been formally suspended; a security whose market or fair value price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of the Fund's NAV or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the third-party pricing service, does not reflect the security's fair value. As a general principle, the current fair value of a security would appear to be the amount which the owner might

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Notes to Financial Statements (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022**

reasonably expect to receive for the security upon its current sale. When fair value prices are used, generally they will differ from market quotations or official closing prices on the applicable exchanges. A variety of factors may be considered in determining the fair value of such securities, including, but not limited to, the following:

1) the last sale price on the exchange on which they are principally traded or, for Nasdaq and AIM securities, the official closing price;

2) the type of security;

3) the size of the holding;

4) the initial cost of the security;

5) transactions in comparable securities;

6) price quotes from dealers and/or third-party pricing services;

7) relationships among various securities;

8) information obtained by contacting the issuer, analysts, or the appropriate stock exchange;

9) an analysis of the issuer's financial statements;

10) the existence of merger proposals or tender offers that might affect the value of the security; and

11) other relevant factors.

If the securities in question are foreign securities, the following additional information may be considered:

1) the value of similar foreign securities traded on other foreign markets;

2) ADR trading of similar securities;

3) closed-end fund or exchange-traded fund trading of similar securities;

4) foreign currency exchange activity;

5) the trading prices of financial products that are tied to baskets of foreign securities;

6) factors relating to the event that precipitated the pricing problem;

7) whether the event is likely to recur;

8) whether the effects of the event are isolated or whether they affect entire markets, countries or regions; and

9) other relevant factors.

The Fund is subject to fair value accounting standards that define fair value, establish the framework for measuring fair value and provide a three-level hierarchy for fair valuation based upon the inputs to the valuation as of the measurement date. The three levels of the fair value hierarchy are as follows:

• Level
 1 – Level 1 inputs are quoted prices in active markets for identical investments. An active market is a market in which transactions
 for the investment occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level
 2 – Level 2 inputs are observable inputs, either directly or indirectly, and include the following:

o Quoted
 prices for similar investments in active markets.

o Quoted
 prices for identical or similar investments in markets that are non-active. A non-active market is a market where there are few transactions
 for the investment, the prices are not current, or price quotations vary substantially either over time or among market makers, or in
 which little information is released publicly.

o Inputs
 other than quoted prices that are observable for the investment (for example, interest rates and yield curves observable at commonly quoted
 intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates).

o Inputs
 that are derived principally from or corroborated by observable market data by correlation or other means.

• Level
 3 – Level 3 inputs are unobservable inputs. Unobservable inputs may reflect the reporting entity's own assumptions about the
 assumptions that market participants would use in pricing the investment.

The inputs or methodologies used for valuing investments are not necessarily an indication of the risk associated with investing in those investments. A summary of the inputs used to value the Fund's investments as of November 30, 2022, is included with the Fund's Portfolio of Investments.

In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act, establishing requirements to determine fair value in good faith for purposes of the 1940 Act. The rule permits fund boards to designate a fund's investment advisor to perform fair value determinations, subject to board oversight and certain other conditions. The rule also defines when market quotations are "readily available" for purposes of the 1940 Act and requires a fund to fair value a portfolio investment when a market quotation is not readily available. The

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Notes to Financial Statements (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022**

SEC also adopted new Rule 31a-4 under the 1940 Act, which sets forth recordkeeping requirements associated with fair value Determinations. The compliance date for Rule 2a-5 and Rule 31a-4 was September 8, 2022.

Effective September 8, 2022 and pursuant to the requirements of Rule 2a-5, the Fund's Board of Trustees designated the Advisor as its valuation designee to perform fair value determinations and approved new Advisor Valuation Procedures for the Fund.

B. Securities Transactions and Investment Income

Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded daily on the accrual basis.

The Fund holds shares of business development companies ("BDCs"). The Fund records the character of distributions received from the BDCs during the year based on estimates available. The tax character of distributions received from these securities may vary when reported by the issuer after their tax reporting periods conclude.

Distributions received from the Fund's investments in REITs may be comprised of return of capital, capital gains, and income. The actual character of the amounts received during the year are not known until after the REITs' fiscal year end. The Fund records the character of distributions received from the REITs during the year based on estimates available. The characterization of distributions received by the Fund may be subsequently revised based on information received from the REITs after their tax reporting periods conclude.

C. Dividends and Distributions to Shareholders

Dividends from net investment income of the Fund are declared and paid quarterly or as the Board of Trustees may determine from time to time. Distributions of any net realized capital gains earned by the Fund are distributed at least annually. Distributions will automatically be reinvested into additional Common Shares pursuant to the Fund's Dividend Reinvestment Plan unless cash distributions are elected by the shareholder.

Distributions from income and realized capital gains are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Certain capital accounts in the financial statements are periodically adjusted for permanent differences in order to reflect their tax character. These permanent differences are primarily due to the varying treatment of income and gain/loss on portfolio securities held by the Fund and have no impact on net assets or NAV per share. Temporary differences, which arise from recognizing certain items of income, expense and gain/loss in different periods for financial statement and tax purposes, will reverse at some point in the future. Permanent differences incurred during the fiscal year ended November 30, 2022, primarily as a result of the prior year tax character of REIT and BDC distributions, have been reclassified at year end to reflect an increase in accumulated net investment income (loss) by $251,001 and a decrease in paid-in-capital of $251,001.Accumulated distributable earnings (loss) consists of accumulated net investment income (loss), accumulated net realized gain (loss) on investments, and unrealized appreciation (depreciation) on investments. Net assets were not affected by this reclassification.

The tax character of distributions paid by the Fund during the fiscal years ended November 30, 2022 and 2021, was as follows:

---

| | | |
|:---|:---|:---|
| Distributions paid from: | &nbsp;&nbsp;**2022** | &nbsp;&nbsp;&nbsp;**2021** |
| Ordinary income<br>| $4009322 | $4336550 |
| Capital gains<br>|  |  |
| Return of capital<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;731983 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;404755 |

---

As of November 30, 2022, the components of distributable earnings and net assets on a tax basis were as follows:

---

| | |
|:---|:---|
| Undistributed ordinary income<br>| &nbsp;&nbsp;$— |
| Undistributed capital gains<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— |
| Total undistributed earnings<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— |
| Accumulated capital and other losses<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(49410705) |
| Net unrealized appreciation (depreciation)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8529328) |
| Total accumulated earnings (losses)<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(57940033) |
| Other<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1185326) |
| Paid-in capital<br>| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;112729163 |
| Total net assets<br>| &nbsp;&nbsp;$53603804 |

---

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[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Notes to Financial Statements (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022**

D. Income Taxes

The Fund intends to continue to qualify as a regulated investment company by complying with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, which includes distributing substantially all of its net investment income and net realized gains to shareholders. Accordingly, no provision has been made for federal and state income taxes. However, due to the timing and amount of distributions, the Fund may be subject to an excise tax of 4% of the amount by which approximately 98% of the Fund's taxable income exceeds the distributions from such taxable income for the calendar year.

The Fund intends to utilize provisions of the federal income tax laws, which allow it to carry a realized capital loss forward indefinitely following the year of the loss and offset such loss against any future realized capital gains. The Fund is subject to certain limitations under U.S. tax rules on the use of capital loss carryforwards and net unrealized built-in losses. These limitations apply when there has been a 50% change in ownership. At November 30, 2022, the Fund had $49,410,705 of non-expiring capital loss carryforwards for federal income tax purposes.

Certain losses realized during the current fiscal year may be deferred and treated as occurring on the first day of the following fiscal year for federal income tax purposes. For the fiscal year ended November 30, 2022, the Fund did not incur any net late year ordinary losses.

The Fund is subject to accounting standards that establish a minimum threshold for recognizing, and a system for measuring, the benefits of a tax position taken or expected to be taken in a tax return. Taxable years ended 2019, 2020, 2021, and 2022 remain open to federal and state audit. As of November 30, 2022, management has evaluated the application of these standards to the Fund and has determined that no provision for income tax is required in the Fund's financial statements for uncertain tax positions.

As of November 30, 2022, the aggregate cost, gross unrealized appreciation, gross unrealized depreciation, and net unrealized appreciation/(depreciation) on investments (including short positions and derivatives, if any) for federal income tax purposes were as follows:

---

| | | | |
|:---|:---|:---|:---|
| Tax Cost | Gross<br> Unrealized<br> Appreciation | Gross<br> Unrealized<br> (Depreciation) | &nbsp;&nbsp;Net Unrealized<br> Appreciation<br> (Depreciation) |
| $70735176 | $4868004 | $(13397325) | &nbsp;&nbsp;$(8529321) |

---

E. Expenses

The Fund will pay all expenses directly related to its operations.

3. Investment Advisory Fee, Affiliated Transactions and Other Fee Arrangements

First Trust, the investment advisor to the Fund, is a limited partnership with one limited partner, Grace Partners of DuPage L.P., and one general partner, The Charger Corporation. The Charger Corporation is an Illinois corporation controlled by James A. Bowen, Chief Executive Officer of First Trust. First Trust is responsible for the ongoing monitoring of the Fund's investment portfolio, managing the Fund's business affairs and providing certain administrative services necessary for the management of the Fund. For these services, First Trust is entitled to a monthly fee calculated at an annual rate of 1.00% of the Fund's Managed Assets. First Trust also provides fund reporting services to the Fund for a flat annual fee in the amount of $9,250.

Confluence serves as the Fund's sub-advisor and manages the Fund's portfolio subject to First Trust's supervision. The Sub-Advisor receives a portfolio management fee at an annual rate of 0.50% of the Fund's Managed Assets that is paid by First Trust from its investment advisory fee.

BNY Mellon Investment Servicing (US) Inc. ("BNYM IS") served as the Fund's transfer agent in accordance with certain fee arrangements until December 31, 2021. Effective December 31, 2021, Computershare, Inc. ("Computershare") commenced serving as the Fund's transfer agent. As transfer agent, Computershare is responsible for maintaining shareholder records for the Fund. The Bank of New York Mellon ("BNYM") serves as the Fund's administrator, fund accountant, and custodian in accordance with certain fee arrangements. As administrator and fund accountant, BNYM is responsible for providing certain administrative and accounting services to the Fund, including maintaining the Fund's books of account, records of the Fund's securities transactions, and certain other books and records. As custodian, BNYM is responsible for custody of the Fund's assets. BNYM IS and BNYM are subsidiaries of The Bank of New York Mellon Corporation, a financial holding company.

Each Trustee who is not an officer or employee of First Trust, any sub-advisor or any of their affiliates ("Independent Trustees") is paid a fixed annual retainer that is allocated equally among each fund in the First Trust Fund Complex. Each Independent Trustee is

------

[**Table of Contents**](#JOB_11-30_ed96141b-17eb-4807-8960-b60cba951838_TOC)

**Notes to Financial Statements (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022**

also paid an annual per fund fee that varies based on whether the fund is a closed-end or other actively managed fund, a target outcome fund or an index fund.

Additionally, the Lead Independent Trustee and the Chairs of the Audit Committee, Nominating and Governance Committee and Valuation Committee are paid annual fees to serve in such capacities, with such compensation allocated pro rata among each fund in the First Trust Fund Complex based on net assets. Independent Trustees are reimbursed for travel and out-of-pocket expenses in connection with all meetings. The Lead Independent Trustee and Committee Chairs rotate every three years. The officers and "Interested" Trustee receive no compensation from the Fund for acting in such capacities.

4. Purchases and Sales of Securities

The cost of purchases and proceeds from sales of securities, excluding short-term investments, for the fiscal year ended November 30, 2022, were $3,698,785 and $3,191,091, respectively.

5. Borrowings

The Fund has a committed facility agreement (the "BNP Facility") with BNP Paribas Prime Brokerage International, Ltd. ("PBL"), which currently has a maximum commitment amount of $25,000,000. Absent certain events of default or failure to maintain certain collateral requirements, PBL may not terminate the BNP Facility except upon 179 calendar days' prior notice. The interest rate under the BNP Facility is equal to the SOFR plus 95 basis points. Prior to June 16, 2022, the interest rate was 1-month LIBOR plus 85 points. In addition, under the BNP Facility, the Fund pays a commitment fee of 0.55% on the undrawn amount.

The average amount outstanding for the fiscal year ended November 30, 2022 was $8,600,000, with a weighted average interest rate of 2.30%. As of November 30, 2022, the Fund had outstanding borrowings of $8,600,000, which approximates fair value, under the BNP Facility. The borrowings are categorized as Level 2 within the fair value hierarchy. The high and low annual interest rates for the fiscal year ended November 30, 2022 were 4.76% and 0.95%, respectively, and the interest rate at November 30, 2022 was 4.76%. The interest and fees are included in "Interest and fees on loan" on the Statement of Operations.

6. Indemnification

The Fund has a variety of indemnification obligations under contracts with its service providers. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote.

7. Financial Sector Concentration Risk

Under normal market conditions, the Fund concentrates its investments (i.e., invests at least 25% of its total assets) in securities of companies within industries in the financial sector. A fund concentrated in a single industry or sector is likely to present more risks than a fund that is broadly diversified over several industries or groups of industries. Compared to the broad market, an individual sector may be more strongly affected by changes in the economic climate, broad market shifts, moves in a particular dominant stock, or regulatory changes. Specialty finance and other financial companies in general are subject to extensive government regulation, which may change frequently. The profitability of specialty finance and other financial companies is largely dependent upon the availability and cost of capital funds, and may fluctuate significantly in response to changes in interest rates, as well as changes in general economic conditions. From time to time, severe competition may also affect the profitability of specialty finance and other financial companies. Financial companies can be highly dependent upon access to capital markets and any impediments to such access, such as general economic conditions or a negative perception in the capital markets of a company's financial condition or prospects, could adversely affect its business. Leasing companies can be negatively impacted by changes in tax laws which affect the types of transactions in which such companies engage.

8. Subsequent Events

Management has evaluated the impact of all subsequent events to the Fund through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements that have not already been disclosed.

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Report of Independent Registered Public Accounting Firm

**To the Shareholders and the Board of Trustees of First Trust Specialty Finance and Financial Opportunities Fund:**

**Opinion on the Financial Statements and Financial Highlights**

We have audited the accompanying statement of assets and liabilities of First Trust Specialty Finance and Financial Opportunities Fund (the "Fund"), including the portfolio of investments, as of November 30, 2022, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of November 30, 2022, and the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of November 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

![](img03fcde447.jpg)

Chicago, Illinois

January 24, 2023

We have served as the auditor of one or more First Trust investment companies since 2001.

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**Additional Information** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

**Dividend Reinvestment Plan**

If your Common Shares are registered directly with the Fund or if you hold your Common Shares with a brokerage firm that participates in the Fund's Dividend Reinvestment Plan (the "Plan"), unless you elect, by written notice to the Fund, to receive cash distributions, all dividends, including any capital gain distributions, on your Common Shares will be automatically reinvested by Computershare Trust Company N.A. (the "Plan Agent"), in additional Common Shares under the Plan. BNY Mellon Investment Servicing (US) Inc. served as the Plan Agent until December 31, 2021. Effective December 31, 2021, Computershare Trust Company N.A. commenced serving as the Fund's Plan Agent. If you elect to receive cash distributions, you will receive all distributions in cash paid by check mailed directly to you by the Plan Agent, as the dividend paying agent.

If you decide to participate in the Plan, the number of Common Shares you will receive will be determined as follows:

(1) If
 Common Shares are trading at or above net asset value ("NAV") at the time of valuation, the Fund will issue new shares at
 a price equal to the greater of (i) NAV per Common Share on that date or (ii) 95% of the market price on that date.

(2) If
 Common Shares are trading below NAV at the time of valuation, the Plan Agent will receive the dividend or distribution in cash and will
 purchase Common Shares in the open market, on the NYSE or elsewhere, for the participants' accounts. It is possible that the market
 price for the Common Shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per
 share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer shares than if the
 dividend or distribution had been paid in Common Shares issued by the Fund. The Plan Agent will use all dividends and distributions received
 in cash to purchase Common Shares in the open market within 30 days of the valuation date except where temporary curtailment or suspension
 of purchases is necessary to comply with federal securities laws. Interest will not be paid on any uninvested cash payments.

You may elect to opt-out of or withdraw from the Plan at any time by giving written notice to the Plan Agent, or by telephone at (866) 340-1104, in accordance with such reasonable requirements as the Plan Agent and the Fund may agree upon. If you withdraw or the Plan is terminated, you will receive a certificate for each whole share in your account under the Plan, and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions.

The Plan Agent maintains all Common Shareholders' accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Common Shares in your account will be held by the Plan Agent in non-certificated form. The Plan Agent will forward to each participant any proxy solicitation material and will vote any shares so held only in accordance with proxies returned to the Fund. Any proxy you receive will include all Common Shares you have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions in Common Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.

Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due upon receiving dividends and distributions. Capital gains and income are realized although cash is not received by you. Consult your financial advisor for more information.

If you hold your Common Shares with a brokerage firm that does not participate in the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above.

The Fund reserves the right to amend or terminate the Plan if in the judgment of the Board of Trustees the change is warranted. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained by writing Computershare, Inc., P.O. Box 505000, Louisville, KY 40233-5000.

**Proxy Voting Policies and Procedures**

A description of the policies and procedures that the Fund uses to determine how to vote proxies and information on how the Fund voted proxies relating to portfolio investments during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (800) 988-5891; (2) on the Fund's website at <u>www.ftportfolios.com</u>; and (3) on the Securities and Exchange Commission's ("SEC") website at <u>www.sec.gov</u>.

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**Additional Information (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

**Portfolio Holdings**

The Fund files portfolio holdings information for each month in a fiscal quarter within 60 days after the end of the relevant fiscal quarter on Form N-PORT. Portfolio holdings information for the third month of each fiscal quarter will be publicly available on the SEC's website at <u>www.sec.gov</u>. The Fund's complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the semi-annual and annual reports to shareholders, respectively, and is filed with the SEC on Form N-CSR. The semi-annual and annual report for the Fund is available to investors within 60 days after the period to which it relates. The Fund's Forms N-PORT and Forms N-CSR are available on the SEC's website listed above.

**Tax Information**

Of the ordinary income (including short-term capital gain) distributions made by the Fund during the fiscal year ended November 30, 2022, none qualify for the corporate dividends received deduction available to corporate shareholders or as qualified dividend income.

**NYSE Certification Information**

In accordance with Section 303A-12 of the New York Stock Exchange ("NYSE") Listed Company Manual, the Fund's President has certified to the NYSE that, as of May 2, 2022, he was not aware of any violation by the Fund of NYSE corporate governance listing standards. In addition, the Fund's reports to the SEC on Form N-CSR contain certifications by the Fund's principal executive officer and principal financial officer that relate to the Fund's public disclosure in such reports and are required by Rule 30a-2 under the 1940 Act.

**Submission of Matters to a Vote of Shareholders**

The Fund held its Annual Meeting of Shareholders (the "Annual Meeting") on April 18, 2022. At the Annual Meeting, James A. Bowen and Niel B. Nielson were elected by the Common Shareholders of First Trust Specialty Finance and Financial Opportunities Fund as Class III Trustees for a three-year term expiring at the Fund's annual meeting of shareholders in 2025. The number of votes cast in favor of Mr. Bowen was 10,386,089 and the number of votes withheld was 446,408. The number of votes cast in favor of Mr. Nielson was 10,377,768 and the number of votes withheld was 454,729. Richard E. Erickson, Thomas R. Kadlec, Denise M. Keefe, and Robert F. Keith are the other current and continuing Trustees.

**Advisory and Sub-Advisory Agreements**

**Board Considerations Regarding Approval of Continuation of Investment Management and Investment Sub-Advisory Agreements**

The Board of Trustees of First Trust Specialty Finance and Financial Opportunities Fund (the "Fund"), including the Independent Trustees, unanimously approved the continuation of the Investment Management Agreement (the "Advisory Agreement") between the Fund and First Trust Advisors L.P. (the "Advisor") and the Investment Sub-Advisory Agreement (the "Sub-Advisory Agreement" and together with the Advisory Agreement, the "Agreements") among the Fund, the Advisor and Confluence Investment Management LLC (the "Sub-Advisor"). The Board approved the continuation of the Agreements for a one-year period ending June 30, 2023 at a meeting held on June 12–13, 2022. The Board determined that the continuation of the Agreements is in the best interests of the Fund in light of the nature, extent and quality of the services provided and such other matters as the Board considered to be relevant in the exercise of its business judgment.

To reach this determination, the Board considered its duties under the Investment Company Act of 1940, as amended (the "1940 Act"), as well as under the general principles of state law, in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; the fiduciary duty of investment advisors with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards have fulfilled their duties; and the factors to be considered by the Board in voting on such agreements. At meetings held on April 18, 2022 and June 12–13, 2022, the Board, including the Independent Trustees, reviewed materials provided by the Advisor and the Sub-Advisor responding to requests for information from counsel to the Independent Trustees, submitted on behalf of the Independent Trustees, that, among other things, outlined: the services provided by the Advisor and the Sub-Advisor to the Fund (including the relevant personnel responsible for these services and their experience); the advisory fee rate payable by the Fund and the sub-advisory fee rate as compared to fees charged to a peer group of funds (the "Expense Group") and a broad peer universe of funds (the "Expense Universe"), each assembled by Broadridge Financial Solutions, Inc. ("Broadridge"), an independent source, and as compared to fees charged to other clients of the Advisor and the Sub-Advisor; the expense ratio of the Fund as compared to expense ratios of the funds in the Fund's Expense Group and Expense Universe; performance information for the Fund, including comparisons of the Fund's performance to that of one or more relevant benchmark indexes and to that of a performance group of funds and a broad performance universe of funds (the "Performance Universe"), each assembled by Broadridge; the nature of expenses incurred in providing services to the Fund and the potential for the Advisor and the Sub-Advisor to realize economies of scale, if any; profitability and other financial data for the Advisor; financial data for the Sub-Advisor; any

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**Additional Information (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

indirect benefits to the Advisor and the Sub-Advisor; and information on the Advisor's and the Sub-Advisor's compliance programs. The Board reviewed initial materials with the Advisor at the meeting held on April 18, 2022, prior to which the Independent Trustees and their counsel met separately to discuss the information provided by the Advisor and the Sub-Advisor. Following the April meeting, counsel to the Independent Trustees, on behalf of the Independent Trustees, requested certain clarifications and supplements to the materials provided, and the information provided in response to those requests was considered at an executive session of the Independent Trustees and their counsel held prior to the June 12–13, 2022 meeting, as well as at the June meeting. The Board applied its business judgment to determine whether the arrangements between the Fund and the Advisor and among the Fund, the Advisor and the Sub-Advisor continue to be reasonable business arrangements from the Fund's perspective. The Board determined that, given the totality of the information provided with respect to the Agreements, the Board had received sufficient information to renew the Agreements. The Board considered that shareholders chose to invest or remain invested in the Fund knowing that the Advisor and the Sub-Advisor manage the Fund.

In reviewing the Agreements, the Board considered the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor under the Agreements. With respect to the Advisory Agreement, the Board considered that the Advisor is responsible for the overall management and administration of the Fund and reviewed all of the services provided by the Advisor to the Fund, including the oversight of the Sub-Advisor, as well as the background and experience of the persons responsible for such services. The Board noted that the Advisor oversees the Sub-Advisor's day-to-day management of the Fund's investments, including portfolio risk monitoring and performance review. In reviewing the services provided, the Board noted the compliance program that had been developed by the Advisor and considered that it includes a robust program for monitoring the Advisor's, the Sub-Advisor's and the Fund's compliance with the 1940 Act, as well as the Fund's compliance with its investment objectives, policies and restrictions. The Board also considered a report from the Advisor with respect to its risk management functions related to the operation of the Fund. Finally, as part of the Board's consideration of the Advisor's services, the Advisor, in its written materials and at the April 18, 2022 meeting, described to the Board the scope of its ongoing investment in additional personnel and infrastructure to maintain and improve the quality of services provided to the Fund and the other funds in the First Trust Fund Complex. With respect to the Sub-Advisory Agreement, the Board reviewed the materials provided by the Sub-Advisor and considered the services that the Sub-Advisor provides to the Fund, including the Sub-Advisor's day-to-day management of the Fund's investments. In considering the Sub-Advisor's management of the Fund, the Board noted the background and experience of the Sub-Advisor's portfolio management team, including the Board's prior meetings with members of the portfolio management team. In light of the information presented and the considerations made, the Board concluded that the nature, extent and quality of the services provided to the Fund by the Advisor and the Sub-Advisor under the Agreements have been and are expected to remain satisfactory and that the Sub-Advisor, under the oversight of the Advisor, has managed the Fund consistent with its investment objectives, policies and restrictions.

The Board considered the advisory and sub-advisory fee rates payable under the Agreements for the services provided. The Board noted that the sub-advisory fee is paid by the Advisor from its advisory fee. The Board received and reviewed information showing the fee rates and expense ratios of the peer funds in the Expense Group, as well as advisory and unitary fee rates charged by the Advisor and the Sub-Advisor to other fund and non-fund clients, as applicable. With respect to the Expense Group, the Board, at the April 18, 2022 meeting, discussed with Broadridge its methodology for assembling peer groups and discussed with the Advisor limitations in creating a relevant peer group for the Fund, including that (i) the Fund is unique in its composition, which makes assembling peers with similar strategies and asset mix difficult; (ii) not all peer funds employ an advisor/sub-advisor management structure; and (iii) certain peer fund assets are larger than those of the Fund, in which case the comparison causes the fixed expenses of the Fund to be larger on a percentage basis. The Board took these limitations into account in considering the peer data, and noted that the contractual advisory fee rate payable by the Fund, based on average managed assets, was below the median contractual advisory fee of the peer funds in the Expense Group. With respect to fees charged to other clients, the Board considered differences between the Fund and other clients that limited their comparability. In considering the advisory fee rate overall, the Board also considered the Advisor's statement that it seeks to meet investor needs through innovative and value-added investment solutions and the Advisor's demonstrated long-term commitment to the Fund and the other funds in the First Trust Fund Complex.

The Board considered performance information for the Fund. The Board noted the process it has established for monitoring the Fund's performance and portfolio risk on an ongoing basis, which includes quarterly performance reporting from the Advisor and Sub-Advisor for the Fund. The Board determined that this process continues to be effective for reviewing the Fund's performance. The Board received and reviewed information comparing the Fund's performance for periods ended December 31, 2021 to the performance of the funds in the Performance Universe and to that of a blended benchmark index. In reviewing the Fund's performance as compared to the performance of the Performance Universe, the Board took into account the limitations described above with respect to creating a relevant peer group for the Fund. Based on the information provided on net asset value performance, the Board noted that the Fund outperformed the Performance Universe median and the blended benchmark index for the one-year period ended December 31, 2021 and underperformed the Performance Universe median and the blended benchmark index for the three-, five- and ten-year periods ended December 31, 2021. In addition, the Board considered information provided by the Advisor

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**Additional Information (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

on the impact of leverage on the Fund's returns. The Board also received information on the Fund's annual distribution rate as of December 31, 2021 and the Fund's average trading discount for various periods and comparable information for a peer group.

On the basis of all the information provided on the fees, expenses and performance of the Fund and the ongoing oversight by the Board, the Board concluded that the advisory and sub-advisory fees continue to be reasonable and appropriate in light of the nature, extent and quality of the services provided by the Advisor and the Sub-Advisor to the Fund under the Agreements.

The Board considered information and discussed with the Advisor whether there were any economies of scale in connection with providing advisory services to the Fund and noted the Advisor's statement that it believes that its expenses relating to providing advisory services to the Fund will likely increase during the next twelve months as the Advisor continues to build infrastructure and add new staff. The Board determined that due to the Fund's closed-end structure, the potential for realization of economies of scale as Fund assets grow was not a material factor to be considered. The Board considered the revenues and allocated costs (including the allocation methodology) of the Advisor in serving as investment advisor to the Fund for the twelve months ended December 31, 2021 and the estimated profitability level for the Fund calculated by the Advisor based on such data, as well as complex-wide and product-line profitability data, for the same period. The Board noted the inherent limitations in the profitability analysis and concluded that, based on the information provided, the Advisor's profitability level for the Fund was not unreasonable. In addition, the Board considered indirect benefits described by the Advisor that may be realized from its relationship with the Fund, including the Advisor's compensation for fund reporting services pursuant to a separate Fund Reporting Services Agreement. The Board concluded that the character and amount of potential indirect benefits to the Advisor were not unreasonable.

The Board considered the Sub-Advisor's statement that many of its costs are fixed, allowing for economies of scale. The Board did not review the profitability of the Sub-Advisor with respect to the Fund. The Board noted that the Advisor pays the Sub-Advisor from its advisory fee and its understanding that the Fund's sub-advisory fee rate was the product of an arm's length negotiation. The Board concluded that the profitability analysis for the Advisor was more relevant. The Board considered indirect benefits that may be realized by the Sub-Advisor and one of its affiliates from the Sub-Advisor's relationship with the Fund, including that the Sub-Advisor may enter into soft dollar and commission sharing arrangements, and considered a summary of such arrangements. The Board noted certain additional indirect benefits identified by the Sub-Advisor deriving from the exposure provided by its relationship with the Fund and the Advisor, including its statement that it realizes benefits from greater exposure to companies and the ability to expand its scope within the specialty finance sector. The Board concluded that the character and amount of potential indirect benefits to the Sub-Advisor were not unreasonable.

Based on all of the information considered and the conclusions reached, the Board, including the Independent Trustees, unanimously determined that the terms of the Agreements continue to be fair and reasonable and that the continuation of the Agreements is in the best interests of the Fund. No single factor was determinative in the Board's analysis.

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**Investment Objectives, Policies, Risks and Effects of Leverage** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

**Changes Occurring During the Prior Fiscal Year**

The following information is a summary of certain changes during the most recent fiscal year ended November 30, 2022. This information may not reflect all of the changes that have occurred since you purchased shares of the Fund.

During the Fund's most recent fiscal year, there were no material changes to the Fund's investment objectives or policies that have not been approved by shareholders or in the principal risk factors associated with an investment in the Fund.

**Investment Objectives**

The Fund's primary investment objective is to seek a high level of current income. As a secondary objective, the Fund seeks an attractive total return.

**Principal Investment Policies**

Under normal market conditions, the Fund seeks to achieve its investment objectives by investing at least 80% of its Managed Assets in a portfolio of securities of specialty finance and other financial companies that the Fund's Sub-Advisor believes offer attractive opportunities for income and capital appreciation. Specialty finance companies are companies that provide financing to borrowers with capital needs that are different relative to traditional borrowers, who typically utilize commercial banks or public debt markets to meet their financing needs.

In addition, under normal market conditions:

• The
 Fund will concentrate its investments in securities of companies within industries in the financial sector, which is comprised of specialty
 finance companies, banks, savings institutions, brokerage firms, investment management companies, insurance companies, holding companies
 of the foregoing and companies that provide related services to such companies.

• The
 Fund will not invest more than 20% of its Managed Assets in master limited partnerships.

The Advisor and Sub-Advisor believe that specialty finance companies may be attractive for investors seeking high levels of current income as many specialty finance companies are "pass-through" entities in which the income of the company is treated as income to the shareholders (i.e., cash flow is not taxed at the entity level). One type of specialty finance company, BDCs, has emerged as a significant alternative to traditional capital providers, such as commercial banks and other financial institutions. BDCs are a type of closed-end fund regulated under the 1940 Act, whose shares are typically listed for trading on a U.S. securities exchange. BDCs typically invest in and lend to small and medium-sized private and certain public companies that may not have access to public equity markets for capital raising. Often times, the financing a BDC provides includes an equity-like investment such as warrants or conversion rights, creating an opportunity for the BDC to participate in capital appreciation in addition to the interest income earned through its debt investments. The interest earned by a BDC flows through to investors in the form of a dividend, normally without being taxed at the BDC entity level. Unlike corporations, BDCs are not taxed on income distributed to their shareholders provided they comply with the applicable requirements of the Internal Revenue Code of 1986. BDCs are unique in that at least 70% of their investments must be made in private and certain public U.S. businesses, and BDCs. are required to make available significant managerial assistance to their portfolio companies. The securities of BDCs, which are required to distribute substantially all of their income on an annual basis to investors in order to not be subject to entity level taxation, often offer a yield advantage over securities of other issuers, such as corporations, that are taxed on income at the entity level and are able to retain all of a portion of their income rather than distributing it to investors. The Fund invests primarily in BDC shares which are trading in the secondary market on a U.S. securities exchange but may, in certain circumstances, invest in an initial public offering of BDC shares or invest in certain debt instruments issued by BDCs. The Fund will indirectly bear its proportionate share of any management and other expense, and of any performance based or incentive fees, charged by the BDCs in which it invests, in addition to the expenses paid by the Fund. Other examples of specialty finance companies include categories of REITs providing commercial or residential mortgage financing or lease financing.

The Fund engages in the use of financial leverage to seek to enhance the level of its current distributions to common shareholders. The Fund may use financial leverage through the issuance of preferred shares of beneficial interest and/or borrowings by the Fund.

The Fund does not intend to enter into derivative transactions as a principal part of its investment strategy. However, the Fund may enter into derivative transactions to seek to manage the risks of the Fund's portfolio securities or for other purposes to the extent the Sub-Advisor determines that the use of derivative transactions is consistent with the Fund's investment objectives and policies and applicable regulatory requirements. Certain of the Fund's derivative transactions, if any, may provide investment leverage to the Fund's portfolio. To the extent the Fund enters into derivatives transactions, it will do so pursuant to Rule 18f-4 under the 1940 Act. Rule 18f-4 requires the Fund to implement certain policies and procedures designed to manage its derivatives risks, dependent upon the Fund's level of exposure to derivative instruments.

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**Investment Objectives, Policies, Risks and Effects of Leverage (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

**Fundamental Investment Policies**

The Fund, as a fundamental policy, may not:

1) Purchase any security if, as a result of the purchase, 25% or more of the Fund's total assets (taken at current value) would be invested in the securities of borrowers and other issuers having their principal business activities in the same industry; provided, that this limitation shall not apply with respect to securities of companies within industries in the financial sector or obligations issued or guaranteed by the U.S. government or by its agencies or instrumentalities;

2) Borrow money except as permitted by the 1940 Act, the rules thereunder and interpretations thereof or pursuant to a Securities and Exchange Commission exemptive order;

3) Issue senior securities, as defined in the 1940 Act, other than: (i) Preferred Shares which immediately after issuance will have asset coverage of at least 200%; (ii) indebtedness which immediately after issuance will have asset coverage of at least 300%; (iii) the borrowings permitted by investment restriction 2 above; or (iv) pursuant to a Securities and Exchange Commission exemptive order;

4) Make loans of funds or other assets, other than by entering into repurchase agreements, lending portfolio securities and through the purchase of debt securities in accordance with its investment objectives, policies and limitations;

5) Act as underwriter of another issuer's securities, except to the extent that the Fund may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of portfolio securities;

6) Purchase or sell real estate, but this shall not prevent the Fund from investing in securities of companies that deal in real estate or are engaged in the real estate business, including real estate investment trusts, and securities secured by real estate or interests therein and the Fund may hold and sell real estate or mortgages on real estate acquired through default, liquidation, or other distributions of an interest in real estate as a result of the Fund's ownership of such securities; and

7) Purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from purchasing or selling options, futures contracts or derivative instruments or from investing in securities or other instruments backed by physical commodities).

The reference to "securities of borrowers" under fundamental investment policy restriction #1 above refers to investments in issuers of debt portfolio securities. The companies within the group of industries in the financial sector in which the Fund concentrates its investments are comprised of specialty finance companies, banks, savings institutions, brokerage firms, investment management companies, insurance companies, holding companies of the foregoing and companies that provide related services to such companies.

Except as noted above, the foregoing fundamental investment policies, together with the investment objectives of the Fund, cannot be changed without approval by holders of a majority of the outstanding voting securities of the Fund, as defined in the 1940 Act, which includes common shares and Preferred Shares, if any, voting together as a single class, and of the holders of the outstanding Preferred Shares, if any, voting as a single class. Under the 1940 Act, a "majority of the outstanding voting securities" means the vote of: (A) 67% or more of the Fund's shares present at a meeting, if the holders of more than 50% of the Fund's shares are present or represented by proxy; or (B) more than 50% of the Fund's shares, whichever is less. The remainder of the Fund's investment policies, including its investment strategy, are considered non-fundamental and may be changed by the Board of Trustees without shareholder approval; provided, that shareholders receive at least 60 days' prior written notice of any such change adopted by the Board of Trustees.

**Principal Risks**

The Fund is a closed-end management investment company designed primarily as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program and, due to the uncertainty inherent in all investments, there can be no assurance that the Fund will achieve its investment objectives. The following discussion summarizes the principal risks associated with investing in the Fund, which includes the risk that you could lose some or all of your investment in the Fund. The Fund is subject to the informational requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940 and, in accordance therewith, files reports, proxy statements and other information that is available for review.

**Business Development Company ("BDC") Risk. The Fund invests in closed-end funds that have elected to be treated as BDCs. Investments in BDCs may be subject to a high degree of risk. BDCs typically invest in small and medium-sized private and certain public companies that may not have access to public equity markets or capital raising, and investments in these companies present a greater risk of loss due to the companies' youth and limited track record. BDCs are also generally more susceptible to competition and economic and market changes due to limited products and market shares. A BDC's portfolio could include a substantial amount of securities purchased in private placements, and its portfolio may carry risks similar to those of a private equity or venture capital fund.**

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**Investment Objectives, Policies, Risks and Effects of Leverage (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

Securities that are not publicly registered may be difficult to value and may be difficult to sell at a price representative of their intrinsic value. Investments in BDCs are subject to various risks, including management's ability to meet the BDC's investment objective, and to manage the BDC's portfolio when the underlying securities are redeemed or sold, during periods of market turmoil and as investors' perceptions regarding a BDC or its underlying investments change. Certain BDCs in which the Fund invests employ the use of leverage in their portfolios through borrowings or in the issuance of preferred stock. While leverage often serves to increase the yield of a BDC, the leverage also subjects the BDC to increased risks, including the likelihood of increased volatility and the possibility that the BDC's common share income will fall if the dividend rate on any preferred shares or the interest rate on any borrowings rises. In addition, the market price for BDCs, together with other dividend paying stocks, may be negatively affected by a rise in interest rates. Alternatively, declining interest rates could adversely impact the earnings of BDCs in which the Fund invests, as new loan originations would likely be made at lower yields. BDC shares are not redeemable at the option of the BDC shareholder and, as with shares of other closed-end funds, they may trade in the secondary market at a discount to their NAV.

**Cyber Security Risk. The Fund is susceptible to potential operational risks through breaches in cyber security. A breach in cyber security refers to both intentional and unintentional events that may cause the Fund to lose proprietary information, suffer data corruption or lose operational capacity. Such events could cause the Fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. Cyber security breaches may involve unauthorized access to the Fund's digital information systems through "hacking" or malicious software coding, but may also result from outside attacks such as denial-of-service attacks through efforts to make network services unavailable to intended users. In addition, cyber security breaches of the Fund's third-party service providers, such as its administrator, transfer agent, custodian, or sub-advisor, as applicable, or issuers in which the Fund invests, can also subject the Fund to many of the same risks associated with direct cyber security breaches. The Fund has established risk management systems designed to reduce the risks associated with cyber security. However, there is no guarantee that such efforts will succeed, especially because the Fund does not directly control the cyber security systems of issuers or third party service providers. Substantial costs may be incurred by the Fund in order to resolve or prevent cyber incidents in the future.**

**Financial Sector Concentration Risk. Under normal market conditions, the Fund concentrates its investments (i.e., invests at least 25% of its total assets) in securities of companies within industries in the financial sector. A fund concentrated in a single industry or sector is likely to present more risks than a fund that is broadly diversified over several industries or groups of industries. Compared to the broad market, an individual sector may be more strongly affected by changes in the economic climate, broad market shifts, moves in a particular dominant stock, or regulatory changes. Specialty finance and other financial companies in general are subject to extensive government regulation, which may change frequently. The profitability of specialty finance and other financial companies is largely dependent upon the availability and cost of capital funds, and may fluctuate significantly in response to changes in interest rates, as well as changes in general economic conditions. From time to time, severe competition may also affect the profitability of specialty finance and other financial companies. Financial companies can be highly dependent upon access to capital markets and any impediments to such access, such as general economic conditions or a negative perception in the capital markets of a company's financial condition or prospects, could adversely affect its business. Leasing companies may be negatively impacted by changes in tax laws which affect the types of transactions in which such companies engage.**

**Illiquid Securities Risk. The Fund may invest in securities that are considered to be illiquid securities. Illiquid securities may be difficult to dispose of at a fair price at the times when the Fund believes it is desirable to do so. The market price of illiquid securities generally is more volatile than that of more liquid securities, which may adversely affect the price that the Fund pays for or recovers upon the sale of such securities. Illiquid securities are also more difficult to value, especially in challenging markets.**

**Income and Interest Rate Risk. The income common shareholders receive from the Fund is based primarily on the dividends and interest it earns from its investments, which can vary widely over the short and long-term. If prevailing market interest rates drop, distribution rates of the Fund's portfolio holdings may decline which then may adversely affect the Fund's distributions on its common shares as well. The Fund's income also would likely be adversely affected when prevailing short-term interest rates increase and the Fund is utilizing leverage.**

**Leverage Risk. The use of leverage by the Fund can magnify the effect of any losses. If the income and gains from the securities and investments purchased with leverage proceeds do not cover the cost of leverage, the return to the common shares will be less than if leverage had not been used. Leverage involves risks and special considerations for common shareholders including: (i) the likelihood of greater volatility of net asset value and market price of the common shares than a comparable portfolio without leverage; (ii) the risk that fluctuations in interest rates on borrowings will reduce the return to the common shareholders or will result in fluctuations in the dividends paid on the common shares; (iii) in a declining market, the use of leverage is likely to cause a greater decline in the net asset value of the common shares than if the Fund were not leveraged, which may result in a greater decline in the market price of the common shares; and (iv) when the Fund uses certain types of leverage, the investment advisory fee payable to the Advisor and by the**

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**Investment Objectives, Policies, Risks and Effects of Leverage (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

Advisor to the Sub-Advisor will be higher than if the Fund did not use leverage. To the extent the Fund uses leverage and invests in BDCs that also use leverage, the risks associated with leverage will be magnified, potentially significantly.

**Management Risk and Reliance on Key Personnel. The implementation of the Fund's investment strategy depends upon the continued contributions of certain key employees of the Advisor and Sub-Advisor, some of whom have unique talents and experience and would be difficult to replace. The loss or interruption of the services of a key member of the portfolio management team could have a negative impact on the Fund.**

**Market Discount from Net Asset Value. Shares of closed-end investment companies such as the Fund frequently trade at a discount from their net asset value. The Fund cannot predict whether its common shares will trade at, below or above net asset value.**

**Market Risk. Securities held by the Fund, as well as shares of the Fund itself, are subject to market fluctuations caused by factors such as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of the Fund could decline in value or underperform other investments as a result of the risk of loss associated with these market fluctuations. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious diseases or other public health issues, recessions, or other events could have a significant negative impact on the Fund and its investments. For example, the coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, had negative impacts, and in many cases severe impacts, on markets worldwide. While the development of vaccines has slowed the spread of the virus and allowed for the resumption of reasonably normal business activity in the United States, many countries continue to impose lockdown measures in an attempt to slow the spread. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease. Also, in February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe and the United States. These hostilities and sanctions resulting from these hostilities could have a significant impact on certain Fund investments as well as Fund performance. As the global pandemic and conflict in Ukraine have illustrated such events may affect certain geographic regions, countries, sectors and industries more significantly than others. These events also may adversely affect the prices and liquidity of the Fund's portfolio securities or other instruments and could result in disruptions in the trading markets. Any of such circumstances could have a materially negative impact on the value of the Fund's shares and result in increased market volatility. During any such events, the Fund's shares may trade at increased premiums or discounts to their net asset value and the bid/ask spread on the Fund's shares may widen.**

**Operational Risk. The Fund is subject to risks arising from various operational factors, including, but not limited to, human error, processing and communication errors, errors of the Fund's service providers, counterparties or other third-parties, failed or inadequate processes and technology or systems failures. The Fund relies on third parties for a range of services, including custody. Any delay or failure relating to engaging or maintaining such service providers may affect the Fund's ability to meet its investment objective. Although the Fund and the Advisor seek to reduce these operational risks through controls and procedures, there is no way to completely protect against such risks.**

**Potential Conflicts of Interest Risk. First Trust, Confluence and the portfolio managers have interests which may conflict with the interests of the Fund. In particular, First Trust and Confluence currently manage and may in the future manage and/or advise other investment funds or accounts with the same or substantially similar investment objective and strategies as the Fund. In addition, while the Fund is using leverage, the amount of the fees paid to First Trust (and by First Trust to Confluence) for investment advisory and management services are higher than if the Fund did not use leverage because the fees paid are calculated based on managed assets. Therefore, First Trust and Confluence have a financial incentive to leverage the Fund.**

**REIT, Mortgage-Related and Asset-Backed Securities Risk. Investing in REITs involves certain unique risks in addition to investing in the real estate industry in general. REITs are subject to interest rate risk (especially mortgage REITs) and the risk of default by lessees or borrowers. An equity REIT may be affected by changes in the value of the underlying properties owned by the REIT. A mortgage REIT may be affected by the ability of the issuers of its portfolio of mortgages to repay their obligations. REITs whose underlying assets are concentrated in properties used by a particular industry are also subject to risks associated with such industry. REITs may have limited financial resources, their securities may trade less frequently and in a limited volume, and their securities may be subject to more abrupt or erratic price movements than larger company securities.**

In addition to REITs, the Fund may invest in a variety of other mortgage-related securities, including commercial mortgage securities and other mortgage-backed instruments. Mortgage-related securities are susceptible to adverse economic, political or regulatory events that affect the value of real estate. Mortgage-related securities are also significantly affected by other factors such as borrower defaults, delinquencies, realized or liquidation losses and other shortfalls. Rising interest rates tend to extend the duration of mortgage-related securities, making them more sensitive to changes in interest rates, and may reduce the market value of the securities. In addition, mortgage-related securities are subject to prepayment risk, the risk that borrowers may pay off their mortgages sooner than

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**Investment Objectives, Policies, Risks and Effects of Leverage (Continued)**

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

expected, particularly when interest rates decline. This can reduce the Fund's returns because the Fund may have to reinvest that money at lower prevailing interest rates.

The Fund's investments in other asset-backed securities are subject to risks similar to those associated with mortgage-backed securities, as well as additional risks associated with the nature of the assets and the servicing of those assets. In general, mortgage-related securities and asset-backed securities are subject to credit risk, extension risk, interest rate risk, liquidity risk and valuation risk.

**Specialty Finance and Other Financial Companies Risks. The profitability of specialty finance and other financial companies in which the Fund may invest is largely dependent upon the availability and cost of capital, and may fluctuate significantly in response to changes in interest rates, as well as changes in general economic conditions. Any impediments to a specialty finance or other financial company's access to capital markets, such as those caused by general economic conditions or a negative perception in the capital markets or the company's financial condition or prospects, could adversely affect such company's business. From time to time, severe competition may also affect the profitability of specialty finance and other financial companies. Specialty finance and other financial companies are subject to rapid business changes, significant competition, value fluctuations due to the concentration of loans in particular industries significantly affected by economic conditions (such as real estate or energy) and volatile performance based upon the availability and cost of capital and prevailing interest rates. In addition, credit and other losses resulting from the financial difficulties of borrowers or other third parties potentially may have an adverse effect on companies in these industries.**

**Valuation Risk. The valuation of the Fund's investments may carry more risk than that of traditional common stock. Uncertainties in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of valuation models and processes may lead to inaccurate asset pricing.**

**Effects of Leverage**

The aggregate principal amount of borrowings under the committed facility agreement (the "BNP Facility") with BNP Paribas Prime Brokerage International, Ltd. represented approximately 13.83% of Managed Assets as of November 30, 2022. Asset coverage with respect to the borrowings under the BNP Facility was 723.30% and the Fund had $16,400,000 of unutilized funds available for borrowing under the BNP Facility as of that date. Outstanding balances under the BNP Facility generally accrue interest at a variable annual rate equal to the SOFR plus 95 basis points. As of November 30, 2022, the rate was 4.76%. As of November 30, 2022, the Fund had $8,600,000 outstanding under the BNP Facility. In addition, under the BNP facility, the Fund pays a commitment fee of 0.55% on the undrawn amount. The total annual interest and fee rate as of November 30, 2022 was 5.81%.

Assuming that the Fund's leverage costs remain as described above (at an assumed average annual cost of 5.81%), the annual return that the Fund's portfolio must experience (net of estimated expenses) in order to cover its leverage costs would be 0.80%. Of course, these numbers are merely estimates used for illustration. Actual leverage costs may vary frequently and may be significantly higher or lower than the rate estimated above.

The following table is furnished in response to requirements of the Securities and Exchange Commission ("SEC"). It is designed to illustrate the effect of leverage on Common Share total return, assuming investment portfolio total returns (comprised of income and changes in the value of securities held in the Fund's portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment portfolio returns are hypothetical figures and are not necessarily indicative of the investment portfolio returns experienced or expected to be experienced by the Fund.

The table further assumes leverage representing 13.83% of the Fund's Managed Assets, net of expenses, and the Fund's current annual interest and fee rate of 5.81%.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| Assumed Portfolio Total Return (Net of Expenses)<br>| &nbsp;&nbsp;&nbsp;&nbsp;-10% | &nbsp;&nbsp;&nbsp;&nbsp;-5% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0% | &nbsp;&nbsp;&nbsp;&nbsp;5% | &nbsp;&nbsp;&nbsp;&nbsp;10% |
| Common Share Total Return<br>| -12.54% | -6.73% | -0.93% | 4.87% | 10.67% |

---

Common Share total return is composed of two elements: the Common Share dividends paid by the Fund (the amount of which is largely determined by the net investment income of the Fund after paying dividends or interest on its leverage) and gains or losses on the value of the securities the Fund owns. As required by SEC rules, the table above assumes that the Fund is more likely to suffer capital losses than to enjoy capital appreciation. For example, to assume a total return of 0% the Fund must assume that the distributions it receives on its investments are entirely offset by losses in the value of those securities.

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**Board of Trustees and Officers** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

The following tables identify the Trustees and Officers of the Fund. Unless otherwise indicated, the address of all persons is 120 East Liberty Drive, Suite 400, Wheaton, IL 60187.

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Year of Birth and Position with the Fund** | **Term of Office and Year First Elected or Appointed<sup>(1)</sup>** | **Principal Occupations<br> During Past 5 Years** | **Number of Portfolios in the First Trust Fund Complex Overseen by Trustee** | &nbsp;&nbsp;**Other Trusteeships or Directorships Held by Trustee During Past 5 Years** |
| **INDEPENDENT TRUSTEES** | **INDEPENDENT TRUSTEES** | **INDEPENDENT TRUSTEES** | **INDEPENDENT TRUSTEES** | **INDEPENDENT TRUSTEES** |
| Richard E. Erickson, Trustee<br> (1951) | &nbsp;&nbsp; • Three Year Term<br>• Since Fund Inception | &nbsp;&nbsp;Physician, Edward-Elmhurst Medical Group; Physician and Officer, Wheaton Orthopedics (1990 to 2021) | &nbsp;&nbsp;223 |  |
| Thomas R. Kadlec, Trustee<br> (1957) | &nbsp;&nbsp; • Three Year Term<br>• Since Fund Inception | &nbsp;&nbsp;Retired; President, ADM Investor Services, Inc. (Futures Commission Merchant) (2010 to July 2022) | &nbsp;&nbsp;223 | &nbsp;&nbsp;Director, National Futures Association and ADMIS Singapore Ltd.; Formerly, Director of ADM Investor Services, Inc., ADM Investor Services International, ADMIS Hong Kong Ltd., and Futures Industry Association |
| Denise M. Keefe, Trustee<br> (1964) | &nbsp;&nbsp; • Three Year Term<br>• Since 2021 | &nbsp;&nbsp;Executive Vice President, Advocate Aurora Health and President, Advocate Aurora Continuing Health Division (Integrated Healthcare System) | &nbsp;&nbsp;223 | &nbsp;&nbsp;Director and Board Chair of Advocate Home Health Services, Advocate Home Care Products and Advocate Hospice; Director and Board Chair of Aurora At Home (since 2018); Director of Advocate Physician Partners Accountable Care Organization; Director and Board Chair of RML Long Term Acute Care Hospitals; and Director of Senior Helpers (since 2021) |
| Robert F. Keith, Trustee<br> (1956) | &nbsp;&nbsp; • Three Year Term<br>• Since Fund Inception | &nbsp;&nbsp;President, Hibs Enterprises (Financial and Management Consulting) | &nbsp;&nbsp;223 | &nbsp;&nbsp;Formerly, Director of Trust Company of Illinois |
| Niel B. Nielson, Trustee<br> (1954) | &nbsp;&nbsp; • Three Year Term<br>• Since Fund Inception | Senior Advisor (2018 to Present), Managing Director and Chief Operating Officer (2015 to 2018), Pelita Harapan Educational Foundation (Educational Products and Services) | 223 |  |

---

<sup>(1)</sup> Currently, Denise M. Keefe and Robert F. Keith, as Class I Trustees, are serving as trustees until the Fund's 2023 annual meeting of shareholders. Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees, are serving as trustees until the Fund's 2024 annual meeting of shareholders. James A. Bowen and Niel B. Nielson, as Class III Trustees, are serving as trustees until the Fund's 2025 annual meeting of shareholders.

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**Board of Trustees and Officers (Continued)** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)**

**November 30, 2022 (Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name, Year of Birth and Position with the Fund** | **Term of Office and Year First Elected or Appointed<sup>(1)</sup>** | **Principal Occupations<br> During Past 5 Years** | **Number of Portfolios in the First Trust Fund Complex Overseen by Trustee** | &nbsp;&nbsp;**Other Trusteeships or Directorships Held by Trustee During Past 5 Years** |
| **INTERESTED TRUSTEE** | **INTERESTED TRUSTEE** | **INTERESTED TRUSTEE** | **INTERESTED TRUSTEE** | **INTERESTED TRUSTEE** |
| James A. Bowen<sup>(2)</sup>, Trustee and<br> Chairman of the Board<br> (1955) | &nbsp;&nbsp; • Three Year Term<br>• Since Fund Inception | Chief Executive Officer, First Trust Advisors L.P. and First Trust Portfolios L.P.; Chairman of the Board of Directors, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) | 223 |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;

---

| | | | |
|:---|:---|:---|:---|
| **Name and Year of Birth** | &nbsp;&nbsp;**Position and Offices with Fund** | &nbsp;&nbsp;**Term of Office and Length of Service** | &nbsp;&nbsp;**Principal Occupations<br> During Past 5 Years** |
| **OFFICERS<sup>(3)</sup>** | **OFFICERS<sup>(3)</sup>** | **OFFICERS<sup>(3)</sup>** | **OFFICERS<sup>(3)</sup>** |
| James M. Dykas<br> (1966) | &nbsp;&nbsp;President and Chief Executive Officer | &nbsp;&nbsp;• Indefinite Term<br>• Since 2016 | &nbsp;&nbsp;Managing Director and Chief Financial Officer, First Trust Advisors L.P. and First Trust Portfolios L.P.; Chief Financial Officer, BondWave LLC (Software Development Company) and Stonebridge Advisors LLC (Investment Advisor) |
| Donald P. Swade<br> (1972) | &nbsp;&nbsp;Treasurer, Chief Financial Officer and Chief Accounting Officer | &nbsp;&nbsp;• Indefinite Term<br>• Since 2016 | &nbsp;&nbsp;Senior Vice President, First Trust Advisors L.P. and First Trust Portfolios L.P. |
| W. Scott Jardine<br> (1960) | &nbsp;&nbsp;Secretary and Chief Legal Officer | &nbsp;&nbsp;• Indefinite Term<br>• Since Fund Inception | &nbsp;&nbsp;General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P.; Secretary and General Counsel, BondWave LLC; Secretary, Stonebridge Advisors LLC |
| Daniel J. Lindquist<br> (1970) | &nbsp;&nbsp;Vice President | &nbsp;&nbsp;• Indefinite Term<br>• Since Fund Inception | &nbsp;&nbsp;Managing Director, First Trust Advisors L.P. and First Trust Portfolios L.P. |
| Kristi A. Maher<br> (1966) | Chief Compliance Officer and Assistant Secretary | • Indefinite Term<br>• Chief Compliance Officer Since January 2011<br>• Assistant Secretary Since Fund Inception | &nbsp;&nbsp;Deputy General Counsel, First Trust Advisors L.P. and First Trust Portfolios L.P. |

---

<sup>(1)</sup> Currently, Denise M. Keefe and Robert F. Keith, as Class I Trustees, are serving as trustees until the Fund's 2023 annual meeting of shareholders. Richard E. Erickson and Thomas R. Kadlec, as Class II Trustees, are serving as trustees until the Fund's 2024 annual meeting of shareholders. James A. Bowen and Niel B. Nielson, as Class III Trustees, are serving as trustees until the Fund's 2025 annual meeting of shareholders.

<sup>(2)</sup> Mr. Bowen is deemed an "interested person" of the Fund due to his position as CEO of First Trust Advisors L.P., investment advisor of the Fund.

<sup>(3)</sup> The term "officer" means the president, vice president, secretary, treasurer, controller or any other officer who performs a policy making function.

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**Privacy Policy** 

**First Trust Specialty Finance and Financial Opportunities Fund (FGB)** 

**November 30, 2022 (Unaudited)**

**Privacy Policy**

First Trust values our relationship with you and considers your privacy an important priority in maintaining that relationship. We are committed to protecting the security and confidentiality of your personal information.

**Sources of Information**

We collect nonpublic personal information about you from the following sources:

• Information
 we receive from you and your broker-dealer, investment professional or financial representative through interviews, applications, agreements
 or other forms;

• Information
 about your transactions with us, our affiliates or others;

• Information
 we receive from your inquiries by mail, e-mail or telephone; and

• Information
 we collect on our website through the use of "cookies." For example, we may identify the pages on our website that your browser
 requests or visits.

**Information Collected**

The type of data we collect may include your name, address, social security number, age, financial status, assets, income, tax information, retirement and estate plan information, transaction history, account balance, payment history, investment objectives, marital status, family relationships and other personal information.

**Disclosure of Information**

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. In addition to using this information to verify your identity (as required under law), the permitted uses may also include the disclosure of such information to unaffiliated companies for the following reasons:

• In
 order to provide you with products and services and to effect transactions that you request or authorize, we may disclose your personal
 information as described above to unaffiliated financial service providers and other companies that perform administrative or other services
 on our behalf, such as transfer agents, custodians and trustees, or that assist us in the distribution of investor materials such as trustees,
 banks, financial representatives, proxy services, solicitors and printers.

• We
 may release information we have about you if you direct us to do so, if we are compelled by law to do so, or in other legally limited
 circumstances (for example to protect your account from fraud).

In addition, in order to alert you to our other financial products and services, we may share your personal information within First Trust.

**Use of Website Analytics**

We currently use third party analytics tools, Google Analytics and AddThis, to gather information for purposes of improving First Trust's website and marketing our products and services to you. These tools employ cookies, which are small pieces of text stored in a file by your web browser and sent to websites that you visit, to collect information, track website usage and viewing trends such as the number of hits, pages visited, videos and PDFs viewed and the length of user sessions in order to evaluate website performance and enhance navigation of the website. We may also collect other anonymous information, which is generally limited to technical and web navigation information such as the IP address of your device, internet browser type and operating system for purposes of analyzing the data to make First Trust's website better and more useful to our users. The information collected does not include any personal identifiable information such as your name, address, phone number or email address unless you provide that information through the website for us to contact you in order to answer your questions or respond to your requests. To find out how to opt-out of these services click on: <u>Google Analytics</u> and <u>AddThis</u>.

**Confidentiality and Security**

With regard to our internal security procedures, First Trust restricts access to your nonpublic personal information to those First Trust employees who need to know that information to provide products or services to you. We maintain physical, electronic and procedural safeguards to protect your nonpublic personal information.

**Policy Updates and Inquiries**

As required by federal law, we will notify you of our privacy policy annually. We reserve the right to modify this policy at any time, however, if we do change it, we will tell you promptly. For questions about our policy, or for additional copies of this notice, please go to <u>www.ftportfolios.com</u>, or contact us at 1-800-621-1675 (First Trust Portfolios) or 1-800-222-6822 (First Trust Advisors).

March 2022

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![](img24e71d1e3.jpg)

**INVESTMENT ADVISOR**

First Trust Advisors L.P.

120 East Liberty Drive, Suite 400

Wheaton, IL 60187

**INVESTMENT SUB-ADVISOR**

Confluence Investment Management LLC

20 Allen Avenue, Suite 300

Saint Louis, MO 63119

**TRANSFER AGENT**

Computershare, Inc.

P.O. Box 505000

Louisville, KY 40233

**ADMINISTRATOR, FUND ACCOUNTANT, AND CUSTODIAN**

The Bank of New York Mellon

240 Greenwich Street

New York, NY 10286

**INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

Deloitte & Touche LLP

111 S. Wacker Drive

Chicago, IL 60606

**LEGAL COUNSEL**

Chapman and Cutler LLP

320 South Canal Street

Chicago, IL 60606

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(b) Not applicable.

**Item 2. Code of Ethics.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies
 to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons
 performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

&nbsp;&nbsp;&nbsp;&nbsp;(c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics
 that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller,
 or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and
 that relates to any element of the code of ethics description.

&nbsp;&nbsp;&nbsp;&nbsp;(d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of
 ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or
 controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third
 party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions.

&nbsp;&nbsp;&nbsp;&nbsp;(e) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(f) A copy of the code of ethics that applies to the registrant's principal executive officer, principal
 financial officer, principal accounting officer or controller is filed as an exhibit pursuant to Item 13(a)(1).

**Item 3. Audit Committee Financial Expert.**

As of the end of the period covered by the report, the registrant's board of trustees has determined that Thomas R. Kadlec and Robert F. Keith are qualified to serve as audit committee financial experts serving on its audit committee and that each of them is "independent," as defined by Item 3 of Form N-CSR.

**Item 4. Principal Accountant Fees and Services.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Audit Fees (Registrant) -- The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $42,000 for the fiscal year ended November 30, 2021 and $44,000 for the fiscal year ended November 30, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Audit-Related Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item were $0 for the fiscal year ended November 30, 2021 and $0 for the fiscal year ended November 30, 2022.

Audit-Related Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item were $0 for the fiscal year ended November 30, 2021 and $0 for the fiscal year ended November 30, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Tax Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant were $5,200 for the fiscal year ended November 30, 2021 and $16,250 for the fiscal year ended November 30, 2022. These fees were for tax consultation and/or tax return preparation.

Tax Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning to the registrant's advisor were $0 for the fiscal year ended November 30, 2021 and $0 for the fiscal year ended November 30, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All Other Fees (Registrant) -- The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the registrant, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended November 30, 2021 and $0 for the fiscal year ended November 30, 2022.

All Other Fees (Investment Advisor) -- The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the registrant's investment advisor, other than the services reported in paragraphs (a) through (c) of this Item were $0 for the fiscal year ended November 30, 2021 and $0 for the fiscal year ended November 30, 2022.

(e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.

Pursuant to its charter and its Audit and Non-Audit Services Pre-Approval Policy, the Audit Committee (the "Committee") is responsible for the pre-approval of all audit services and permitted non-audit services (including the fees and terms thereof) to be performed for the registrant by its independent auditors. The Chairman of the Committee is authorized to give such pre-approvals on behalf of the Committee up to $25,000 and report any such pre-approval to the full Committee.

The Committee is also responsible for the pre-approval of the independent auditor's engagements for non-audit services with the registrant's advisor (not including a sub-advisor whose role is primarily portfolio management and is sub-contracted or overseen by another investment advisor) and any entity controlling, controlled by or under common control with the investment advisor that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant, subject to the *de minimis* exceptions for non-audit services described in Rule 2-01 of Regulation S-X. If the independent auditor has provided non-audit services to the registrant's advisor (other than any sub-advisor whose role is primarily portfolio management and is sub-contracted with or overseen by another investment advisor) and any entity controlling, controlled by or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to its policies, the Committee will consider whether the provision of such non-audit services is compatible with the auditor's independence.

(e)(2)&nbsp;&nbsp;&nbsp;&nbsp; The percentage of services described in each of paragraphs (b) through (d) for the registrant and the registrant's investment advisor of this Item that were approved by the audit committee pursuant to the pre-approval exceptions included in paragraph (c)(7)(i)(c) or paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) 0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) 0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) 0%

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than fifty

percent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the advisor that provides ongoing services to the registrant for the fiscal year ended November 30, 2021, were $5,200 for the registrant and $16,500 for the registrant's investment advisor; and for the fiscal year ended November 30, 2022, were $16,250 for the registrant and $0 for the registrant's investment advisor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The registrant's audit committee of its Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment advisor (not including any sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Not applicable.

**Item 5. Audit Committee of Listed Registrants.**

The registrant has a separately designated audit committee consisting of all the independent trustees of the registrant. The members of the audit committee are: Richard E. Erickson, Thomas R. Kadlec, Denise M. Keefe, Robert F. Keith and Niel B. Nielson.

**Item 6. Investments.**

(a)**&nbsp;&nbsp;&nbsp;&nbsp;** Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form.

(b)&nbsp;&nbsp;&nbsp;&nbsp; Not applicable.

**Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.**

A description of the policies and procedures used to vote proxies on behalf of the Fund is attached as an exhibit.

**Item 8. Portfolio Managers of Closed-End Management Investment Companies.**

**(a)(1) Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio Manager(s) or Management Team Members**

Investment decisions for the registrant are made by the Portfolio Management Team of Confluence Investment Management LLC ("Confluence"). The members of the Confluence Portfolio Management Team are responsible for portfolio management including security research and selection, leverage management, guidance compliance and position review, communication with and reporting to Advisor to the Fund.

Information provided as of November 30, 2022

**Mark A. Keller, CFA – Chief Executive Officer and Chief Investment Officer**

Mr. Keller has over 30 years of investment experience with a focus on value-oriented equity analysis and management. From 1994 to May 2008, he was the Chief Investment Officer of Gallatin Asset Management, Inc., and its predecessor organization, A.G. Edwards Asset Management, the investment management arm of A.G. Edwards, Inc. From 1999 to 2008, Mr. Keller was Chairman of A.G. Edwards' Investment Strategy Committee, which set investment policy and established asset allocation models for the entire organization. Mr. Keller was a founding member of the A.G. Edwards Investment Strategy Committee, on which he served for over 20 years, the last ten of which as Chairman of the Committee. Mr. Keller began his career with A.G. Edwards in 1978, serving as an equity analyst for the firm's Securities Research Department from 1979 to 1994. During his last five years in Securities Research, Mr. Keller was Equity Strategist and manager of the firm's Focus List. Mr. Keller was a Senior Vice President of A.G. Edwards & Sons, Inc. and of Gallatin Asset Management, Inc., and was a member of the Board of Directors of both companies. Mr. Keller received a Bachelor of Arts from Wheaton College (Illinois) and is a CFA charterholder.

**David B. Miyazaki, CFA – Senior Vice President and Portfolio Manager**

Prior to joining Confluence in May 2008, Mr. Miyazaki served as a Portfolio Manager and Analyst with Gallatin Asset Management, Inc., the investment management arm of A.G. Edwards, Inc. Mr. Miyazaki was responsible for equity investments in value-oriented separately managed accounts. He also co-managed the A.G. Edwards' ETF-based asset allocation program. In addition to portfolio management, Mr. Miyazaki served as a member of the A.G. Edwards' Investment Strategy Committee. As a strategist, he was responsible for the firm's quantitative asset allocation models, including its Cyclical Asset Allocation program. Prior to joining A.G. Edwards in 1999, Mr. Miyazaki was a Portfolio Manager at Koch Industries in Wichita, Kansas. His previous experience includes working as an Investment Analyst at Prudential Capital Group in Dallas, Texas, and as a Bond Trader at Barre & Company, also in Dallas. Mr. Miyazaki received a Bachelor of Business Administration from Texas Christian University and is a CFA charterholder.

**Daniel T. Winter, CFA – Senior Vice President and Chief Investment Officer – Value Equity**

Prior to joining Confluence in May 2008, Mr. Winter served as a Portfolio Manager and Analyst with Gallatin Asset Management, Inc., the investment arm of A.G. Edwards, Inc. While at Gallatin, Mr. Winter chaired the portfolio management team responsible for the firm's six value-oriented equity strategies. His responsibilities also included directing the strategy implementation and trading execution for the equity portfolios. Mr. Winter also served as a portfolio manager for the Cyclical Growth ETF Portfolio and the Cyclical Growth and Income ETF Portfolio which were offered through variable annuities. He was also a member of the firm's Allocation Advisor Committee which oversaw the A.G. Edwards exchange-traded fund focused strategies. Prior to joining the firm's Asset Management division in 1996, Mr. Winter served as a portfolio manager for A.G. Edwards Trust Company. Mr. Winter earned a Bachelor of Arts in business management from Eckerd College and a Master of Business Administration from Saint Louis University. Mr. Winter is a CFA charterholder.

(a)(2) Other Accounts Managed by Portfolio Manager(s) or Management Team Member and Potential Conflicts of Interest

Information provided as of November 30, 2022

**Other Accounts Managed by Portfolio Manager(s) or Management Team Member**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp; Name of Portfolio Manager or<br> <u>Team Member</u><br>| &nbsp;&nbsp; <u>Type of Accounts</u><br>| &nbsp;&nbsp; Total<br> No. of Accounts <br> <u>Managed</u><br>| &nbsp;&nbsp; <u>Total Assets</u><br>| &nbsp;&nbsp; No. of Accounts where Advisory Fee is Based on <br> <u>Performance</u><br>| &nbsp;&nbsp; Total Assets in Accounts where Advisory Fee is Based on <u>Performance</u><br>|
| 1. Mark Keller | &nbsp;&nbsp;Registered Investment Companies: | &nbsp;&nbsp;1 | &nbsp;&nbsp;$28469355 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Pooled Investment Vehicles: | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Accounts: | &nbsp;&nbsp;17481 | &nbsp;&nbsp;$7111725252 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp; 2. Daniel Winter<br>| &nbsp;&nbsp;Registered Investment Companies: | &nbsp;&nbsp;1 | &nbsp;&nbsp;$28469355 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Pooled Investment Vehicles: | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Accounts: | &nbsp;&nbsp;16377 | &nbsp;&nbsp;$6664087859 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
| &nbsp;&nbsp;3. David Miyazaki | &nbsp;&nbsp;Registered Investment Companies: | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Pooled Investment Vehicles: | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |
|  | &nbsp;&nbsp;Other Accounts: | &nbsp;&nbsp;1037 | &nbsp;&nbsp;$292376045 | &nbsp;&nbsp;0 | &nbsp;&nbsp;$0 |

---

**Potential Conflicts of Interests**

As disclosed in the Confluence Form ADV Part 2A, from time to time, Confluence is presented, in connection with its discretionary portfolio management and investment advisory services, with an opportunity to participate in public offerings of securities. Certain of our clients, including those in certain Wrap Account Programs, may be prohibited from participating in such offerings by their respective Financial Institution. Certain of our other clients may be unable to participate in such offerings if their respective Financial Institution did not participate in the initial distribution of securities in such offering, depending on their particular Financial Institution or Custodian. Accordingly, Confluence's policy is to not purchase shares in such public offerings for its clients. In contrast, the First Trust Specialty Finance and Financial Opportunities Fund and the First Trust Confluence Small Cap Value Fund, the open-end mutual fund and the closed-end fund for which we act as sub-advisor, and our institutional clients are not similarly restricted, and are therefore allowed to participate in public offerings.

**(a)(3) Compensation Structure of Portfolio Manager(s) or Management Team Members**

Information provided as of November 30, 2022

The Fund's portfolio managers are compensated with an annual base salary and a discretionary bonus based on Confluence's overall firm profits. The firm provides a 401k contribution and may make a discretionary additional contribution. In addition, the Firm's portfolio managers are equity owners in the Firm, aligning their long-term interests with the Fund holder to strive to achieve superior investment performance over an appropriate time period. This ensures that the portfolio managers are incented to implement a consistent investment strategy for the Fund without incurring undue risk.

**(a)(4) Disclosure of Securities Ownership**

Information provided as of November 30, 2022

---

| | |
|:---|:---|
| &nbsp;&nbsp;<u>Name</u> | &nbsp;&nbsp;<u>Dollar Range of Registrant Shares Beneficially Owned</u> |
| &nbsp;&nbsp;Mark Keller | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$10001 - $50000 |
| &nbsp;&nbsp;Daniel Winter |  |
| &nbsp;&nbsp;David Miyazaki | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$10001 - $50000 |
| &nbsp;&nbsp;Brian Hansen | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$10001 - $50000 |
| &nbsp;&nbsp;Joe Hanzlik | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$10001 - $50000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(b)** Not applicable.

**Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.**

Not applicable.

**Item 10. Submission of Matters to a Vote of Security Holders.**

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

**Item 11. Controls and Procedures.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) The registrant's principal executive and principal financial officers, or persons performing similar
 functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment
 Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the
 filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures
 required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act
 of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

&nbsp;&nbsp;&nbsp;&nbsp;(b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule
 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected,
 or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

**Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.**

&nbsp;&nbsp;&nbsp;&nbsp;(a) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;(b) Not applicable.

**Item 13. Exhibits.**

(a)(1) [Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto](ethics.htm).

(a)(2) [Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto](certs_302.htm).

(a)(3) Not applicable.

(a)(4) Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) [Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto](certs_906.htm) .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies required by Item 7 is attached hereto](exh99.htm) .

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(registrant) First Trust Specialty Finance and Financial
 Opportunities Fund

---

| | |
|:---|:---|
| By (Signature and Title)\* | &nbsp;&nbsp;&nbsp;/s/ James M. Dykas |
|  | &nbsp;&nbsp;&nbsp;James M. Dykas, President and Chief Executive Officer<br> (principal executive officer) |

---

Date: <u>February 6, 2023</u>

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

---

| | |
|:---|:---|
| By (Signature and Title)\* | &nbsp;&nbsp;&nbsp;/s/ James M. Dykas |
|  | &nbsp;&nbsp;&nbsp;James M. Dykas, President and Chief Executive Officer<br> (principal executive officer) |

---

Date: <u>February 6, 2023</u>

---

| | |
|:---|:---|
| By (Signature and Title)\* | &nbsp;&nbsp;&nbsp;/s/ Donald P. Swade |
|  | &nbsp;&nbsp;&nbsp;Donald P. Swade, Treasurer, Chief Financial Officer <br> and Chief Accounting Officer<br> (principal financial officer) |

---

Date: <u>February 6, 2023</u>

<sup>\*</sup> Print the name and title of each signing officer under his or her signature.

## Ex-99.Code

#### SENIOR FINANCIAL OFFICER<br> CODE OF CONDUCT
I. Introduction

This code of conduct is being adopted by the investment companies advised by First Trust Advisors L.P., from time to time, (the "FUNDS"). The reputation and integrity of the Funds are valuable assets that are vital to the Funds' success. Each officer of the Funds, and officers and employees of the investment adviser to the Funds who work on Fund matters, including each of the Funds' senior financial officers ("SFOS"), is responsible for conducting each Fund's business in a manner that demonstrates a commitment to the highest standards of integrity. SFOs include the Principal Executive Officer (who is the President), the Controller (who is the principal accounting officer), and the Treasurer (who is the principal financial officer), and any person who performs a similar function.

The Funds, First Trust Advisors L.P. and First Trust Portfolios have adopted Codes of Ethics under Rule 17j-1 under the Investment Company Act of 1940 (the "RULE 17J-1 CODE"). These Codes of Ethics are designed to prevent certain conflicts of interest that may arise when officers, employees, or directors of the Funds and the foregoing entities know about present or future Fund transactions and/or have the power to influence those transactions, and engage in transactions with respect to those same securities in their personal account(s) or otherwise take advantage of their position and knowledge with respect to those securities. In an effort to prevent these conflicts and in accordance with Rule 17j-1, the Funds adopted their Rule 17j-1 Code to prohibit transactions and conduct that create conflicts of interest, and to establish compliance procedures.

The Sarbanes-Oxley Act of 2002 was designed to address corporate malfeasance and to help assure investors that the companies in which they invest are accurately and completely disclosing financial information. Under Section 406 of the Act, all public companies (including the Funds) must either have a code of ethics for their SFOs, or disclose why they do not. The Act was intended to prevent future situations (such as occurred in well-reported situations involving such companies as Enron and WorldCom) where a company creates an environment in which employees are afraid to express their opinions or to question unethical and potentially illegal business practices.

The Funds have chosen to adopt a senior financial officer Code of Conduct to encourage their SFOs, and other Fund officers and employees of First Trust Advisors or First Trust Portfolios to act ethically and to question potentially unethical or illegal practices, and to strive to ensure that the Funds' financial disclosures are complete, accurate, and understandable.

II. Purposes of This Code of Conduct

The purposes of this Code are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. To promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. To promote full, fair, accurate, timely, and understandable disclosure in reports and documents that the Funds file with, or submits to, the SEC and in other public communications the Funds make;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. To promote compliance with applicable governmental laws, rules and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. To encourage the prompt internal reporting to an appropriate person of violations of the Code; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. To establish accountability for adherence to the Code.

III. Questions About This Code

The Funds' Boards of Trustees have designated W. Scott Jardine or other appropriate officer designated by the President of the respective Funds to be the Compliance Coordinator for the implementation and administration of the Code.

IV. Handling of Financial Information

The Funds have adopted guidelines under which its SFOs perform their duties. However, the Funds expect that all officers or employees of the adviser or distributor who participate in the preparation of any part of any Fund's financial statements follow these guidelines with respect to each Fund:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Act with honesty and integrity and avoid violations of this Code, including actual or apparent conflicts of interest with the Fund in personal and professional relationships.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Disclose to the Fund's Compliance Coordinator any material transaction or relationship that reasonably could be expected to give rise to any violations of the Code, including actual or apparent conflicts of interest with the Fund. You should disclose these transactions or relationships whether you are involved or have only observed the transaction or relationship. If it is not possible to disclose the matter to the Compliance Coordinator, it should be disclosed to the Fund's Principal Financial Officer or Principal Executive Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. Provide information to the Fund's other officers and appropriate employees of service providers (adviser, administrator, outside auditor, outside counsel, custodian, etc.) that is accurate, complete, objective, relevant, timely, and understandable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. Endeavor to ensure full, fair, timely, accurate, and understandable disclosure in the Fund's periodic reports.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E. Comply with the federal securities laws and other applicable laws and rules, such as the Internal Revenue Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F. Act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material facts or allowing your independent judgment to be subordinated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G. Respect the confidentiality of information acquired in the course of your work except when you have Fund approval to disclose it or where disclosure is otherwise legally mandated. You may not use confidential information acquired in the course of your work for personal advantage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H. Share and maintain skills important and relevant to the Fund's needs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I. Proactively promote ethical behavior among peers in your work environment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J. Responsibly use and control all assets and resources employed or entrusted to you.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K. Record or participate in the recording of entries in the Fund's books and records that are accurate to the best of your knowledge.

V. Waivers of This Code

SFOs and other parties subject to this Code may request a waiver of a provision of this Code (or certain provisions of the Fund's Rule 17j-1 Code) by submitting their request in writing to the Compliance Coordinator for appropriate review. An executive officer of the Fund or the Audit Committee will decide whether to grant a waiver. All waivers of this Code must be disclosed to the Fund's shareholders to the extent required by SEC rules. A good faith interpretation of the provisions of this Code, however, shall not constitute a waiver.

VI. Annual Certification

Each SFO will be asked to certify on an annual basis that he/she is in full compliance with the Code and any related policy statements.

VII. Reporting Suspected Violations

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. SFOs or other officers of the Funds or employees of the First Trust group who work on Fund matters who observe, learn of, or, in good faith, suspect a violation of the Code MUST immediately report the violation to the Compliance Coordinator, another member of the Funds' or First Trust's senior management, or to the Audit Committee of the Fund Board. An example of a possible Code violation is the preparation and filing of financial disclosure that omits material facts, or that is accurate but is written in a way that obscures its meaning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Because service providers such as an administrator, outside accounting firm, and custodian provide much of the work relating to the Funds' financial statements, you should be alert for actions by service providers that may be illegal, or that could be viewed as dishonest or unethical conduct. You should report these actions to the Compliance Coordinator even if you know, or think, that the service provider has its own code of ethics for its SFOs or employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. SFOs or other officers or employees who report violations or suspected violations in good faith will not be subject to retaliation of any kind. Reported violations will be investigated and addressed promptly and will be treated confidentially to the extent possible.

VIII. Violations of The Code

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. Dishonest, unethical or illegal conduct will constitute a violation of this Code, regardless of whether this Code specifically refers to that particular conduct. A violation of this Code may result in disciplinary action, up to and including termination of employment. A variety of laws apply to the Funds and their operations, including the Securities Act of 1933, the Investment Company Act of 1940, state laws relating to duties owed by Fund directors and officers, and criminal laws. The federal securities laws generally prohibit the Funds from making material misstatements in its prospectus and other documents filed with the SEC, or from omitting to state a material fact. These material misstatements and omissions include financial statements that are misleading or omit materials facts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Examples of criminal violations of the law include stealing, embezzling, misapplying corporate or bank funds, making a payment for an expressed purpose on a Fund's behalf to an individual who intends to use it for a different purpose; or making payments, whether corporate or personal, of cash or other items of value that are intended to influence the judgment or actions of political candidates, government officials or businesses in connection with any of the Funds' activities. The Funds must and will report all suspected criminal violations to the appropriate authorities for possible prosecution, and will investigate, address and report, as appropriate, non-criminal violations.

Amended: June 1, 2009

## Ex-99.Cert

**Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 <br> of the Sarbanes-Oxley Act**

I, James M. Dykas, certify that:

1. I have reviewed this report on Form N-CSR of First Trust Specialty Finance and Financial Opportunities
Fund;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and
report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 6, 2023 | &nbsp;&nbsp;&nbsp;/s/ James M. Dykas |
|  |  | &nbsp;&nbsp;&nbsp;James M. Dykas, President and Chief Executive Officer<br> (principal executive officer) |

---

**Certification Pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 <br> of the Sarbanes-Oxley Act**

I, Donald P. Swade, certify that:

1. I have reviewed this report on Form N-CSR of First Trust Specialty Finance and Financial Opportunities
Fund;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this
report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial
reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented
in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to
the filing date of this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's internal control over financial reporting
that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and
report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 6, 2023 | &nbsp;&nbsp;&nbsp;/s/ Donald P. Swade |
|  |  | &nbsp;&nbsp;&nbsp;Donald P. Swade, Treasurer, Chief Financial Officer <br> and Chief Accounting Officer<br> (principal financial officer) |

---

## Exhibit 99.906

**Certification Pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 <br> of the Sarbanes-Oxley Act**

I, James M. Dykas, President and Chief Executive Officer of First Trust Specialty Finance and Financial Opportunities Fund (the "registrant"), certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Form N-CSR of the registrant (the "Report") fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the registrant.

---

| | | |
|:---|:---|:---|
| Date: | February 6, 2023 | &nbsp;&nbsp;&nbsp;/s/ James M. Dykas |
|  |  | &nbsp;&nbsp;&nbsp;James M. Dykas, President and Chief Executive Officer<br> (principal executive officer) |

---

I, Donald P. Swade, Treasurer, Chief Financial Officer and Chief Accounting Officer of First Trust Specialty Finance and Financial Opportunities Fund (the "registrant"), certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Form N-CSR of the registrant (the "Report") fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the registrant.

---

| | | |
|:---|:---|:---|
| Date: | February 6, 2023 | &nbsp;&nbsp;&nbsp;/s/ Donald P. Swade |
|  |  | &nbsp;&nbsp;&nbsp;Donald P. Swade, Treasurer, Chief Financial Officer <br> and Chief Accounting Officer<br> (principal financial officer) |

---

## Ex-99

**CONFLUENCE INVESTMENT MANAGEMENT LLC**

**PROXY VOTING POLICY** 

**1. <u>Introduction</u>**

As a registered investment adviser, Confluence Investment Management LLC ("Confluence") has a fiduciary duty to act solely in the best interests of its clients. If the client is a registered investment company under the Investment Company Act of 1940 or the client requests Confluence to do so in writing, Confluence will vote proxy materials for its clients.

In cases where the discretionary client has delegated proxy voting responsibility and authority to Confluence, Confluence has adopted and implemented the following policies and procedures, which it believes are reasonably designed to ensure that proxies are voted in the best interests of its clients. In pursuing this policy, proxies should be voted in a manner that is intended to maximize value to the client. In situations where Confluence accepts such delegation and agrees to vote proxies, Confluence will do so in accordance with these Policies and Procedures. Confluence may delegate its responsibilities under these Policies and Procedures to a third party, provided that no such delegation shall relieve Confluence of its responsibilities hereunder and Confluence shall retain final authority and fiduciary responsibility for such proxy voting.

Investment advisers registered with the SEC, and which exercise voting authority with respect to client securities, are required by Rule 206(4)-6 of the Advisers Act to (a) adopt and implement written policies and procedures that are reasonably designed to ensure that client securities are voted in the best interests of clients, which must include how an adviser addresses material conflicts that may arise between an adviser's interests and those of its clients; (b) disclose to clients how they may obtain information from the adviser with respect to the voting of proxies for their securities; (c) describe to clients a summary of its proxy voting policies and procedures and, upon request, furnish a copy to its clients; and (d) maintain certain records relating to the adviser's proxy voting activities when the adviser does have proxy voting authority.

**2. <u>Voting Guidelines</u>**

Confluence has adopted the Broadridge Proxy Policies and Insights Shareholder Value ("Proxy Policies and Insights") to determine how each issue on proxy ballots is to be voted. The Proxy Policies and Insights is incorporated herein by this reference, and a copy of the Proxy Policies and Insights, as may be revised from time to time, is maintained with Confluence's proxy voting policy.

The Proxy Policies and Insights seeks to maximize shareholder value in proxy voting. While the Proxy Policies and Insights is created using voting trends of the top 10 fund families that also 2 seek to maximize shareholder value, Confluence seeks to review the template no less frequently than annually (and make revisions when necessary) to better enhance the shareholder's value maximization objective. Proxy statements will be voted in accordance with this template unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Confluence determines it has a conflict,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· Confluence investment team determines there is a valid reason not to follow the Proxy Policies and Insights
recommendation, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;· No recommendation is provided by Proxy Policies and Insights, in which case Confluence will independently
determine how a particular issue is to be voted and will document that determination for the record.

In the event proxy ballots are received with respect to debt securities, Confluence will vote on a case by case basis in a manner it believes to be in the best economic interest of clients.

Any decision to override the PPI on a particular ballot issue must receive approval by the relevant CIO or his/her delegate (typically a Director of Research). The reason for not following the Proxy Policies and Insights must be documented for recordkeeping purposes.

Confluence may determine not to vote a particular proxy, if the costs and burdens exceed the benefits of voting (e.g., when securities are subject to loan or to share blocking restrictions) or if a determination is made that not voting is in the best interest of the client.

**3. <u>Responsibility</u>**

Confluence utilizes Broadridge Financial Solutions, Inc. ("Broadridge"), an outsourcing provider to the global financial services industry, to coordinate, process, manage and maintain electronic records of Confluence proxy votes.

Confluence has adopted the Broadridge Proxy Policy and Insights. It is the responsibility of the Proxy Committee to at least annually, review the Proxy Policies and Insights for continued relevancy. Confluence is responsible for responding to any corporate actions as well as address any proxy ballot issues for which a recommendation is not provided by Proxy Policy and Insights.

Confluence compliance is responsible for maintaining this policy, reviewing it at least annually, and updating it as required.

All client accounts are to be directed to Broadridge in order for proxy ballots to be listed and voted on Broadridge's Proxy Edge system. Occasionally, however, proxy ballots are forwarded directly to Confluence, which must then vote the proxy ballots independent of the Proxy Edge 3 system. Confluence is not responsible for voting proxies it does not receive, but will make reasonable efforts to obtain missing proxies.

**4. <u>Registered Investment Companies</u>**

In cases in which the client is a registered investment company under the Investment Company Act of 1940 and the client delegates proxy voting, Confluence will vote proxies pursuant to this policy. Where Confluence acts as a sub-adviser of a closed-end fund that invests in other investment company securities, Confluence (as required) will vote such proxies in the same proportion as the vote of all other shareholders of the fund (i.e. "echo vote" or 'mirror vote"), unless otherwise required by law. When required by law, Confluence will also echo vote proxies of securities in unaffiliated investment vehicles. For example, section 12(d)(1)(F) of the Investment Company Act of 1940 requires echo voting of registered investment companies that sub-advise or manage securities of other registered investment companies.

**5. <u>Conflicts of Interest</u>**

In the event an employee determines that Confluence has a conflict of interest due to, for example, a relationship with a company or an affiliate of a company, or for any other reason which could influence the advice given, the employee will advise the Chief Compliance Officer and the Proxy Committee, and the Proxy Committee will decide whether Confluence should either (1) disclose to the client the conflict to enable the client to evaluate the advice in light of the conflict or (2) disclose to the client the conflict and decline to provide the advice.

Confluence shall use commercially reasonable efforts to determine whether a potential conflict may exist, and a potential conflict shall be deemed to exist only if one or more members of the Confluence Investment Committee (on which the Chief Investment Officer is a member) knows or should have known of the conflict. Confluence is sensitive to conflicts of interest that may arise in the proxy decision-making process and has identified the following potential conflicts of interest:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A principal of Confluence or any person involved in the proxy decision-making process currently
serves on the Board of the portfolio company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• An immediate family member of a principal of Confluence or any person involved in the proxy
decision-making process currently serves as a director or executive officer of the portfolio company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Confluence or any affiliate holds a material ownership interest in the portfolio company.

This list is not intended to be exclusive. All employees are obligated to disclose any potential conflict to Confluence's Chief Compliance Officer.

If a material conflict is identified, Confluence management may (i) disclose the potential conflict to the client and obtain consent; or (ii) establish an ethical wall or other informational barriers between the person(s) that are involved in the conflict and the persons making the voting decisions.

Confluence will resolve identified conflicts of interest in the best interest of the client.

**6. <u>Oversight of Third Parties</u>**

Annually, the Proxy Policies and Insights will be reviewed by the Proxy Committee. Annually, Confluence compliance will request documents necessary to evaluate Broadridge's continuing ability to adequately provide services to Confluence and its clients (e.g. SOC-1 report).

Confluence will perform periodic review of Broadridge through reports available on the Broadridge Proxy Edge site.

**7. <u>Client Requests for Information</u>**

All client requests for information regarding proxy votes, or policies and procedures, received by any employee should be forwarded to Confluence compliance. Confluence compliance will prepare a written response to the client with the information requested.

**8. <u>Disclosure</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Confluence will provide required disclosures in response to Item 17 of Form ADV Part 2A summarizing
this proxy voting policy and procedures, including a statement that clients may request information regarding how Confluence voted client's
proxies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Confluence will also disclose how clients may obtain a copy of the firm's proxy voting
policies and procedures, however Confluence will not disclose how proxies were voted to third-party non-clients, and;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Confluence shall make known its proxy voting policy in its advisory agreement or along with
its advisory agreement.

**9. <u>Recordkeeping</u>**

The Chief Compliance Officer or his/her designate is responsible for maintaining the following records, however Confluence may rely on its third-party service provider to retain certain records:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• proxy voting policies and procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• proxy statements (provided, however, that Confluence may rely on the Securities and Exchange Commission's EDGAR system if the issuer
filed its proxy statements via EDGAR or may rely on a third party as long as the third party has provided Confluence with a copy of the
proxy statement promptly upon request);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• records of electronic votes cast and abstentions; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any records prepared by Confluence that were material to a proxy voting decision or that memorialized a decision.

Policy: <br> Revised: 2019-12-31