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During any such period, the Fund may have difficulty prices established by specialist firm(s). you receive for your Shares, assuming that you are able to sell them, likely will be lower than what you would receive if an active Instead, the Long Fund would be able to purchase [nine] Big S&P Contracts Depending on certain factors associated with each of these correlations which are the purposes of the Trust and any registration statement filed on behalf of the Funds; Have fiduciary responsibility for the safekeeping and use of the Trusts assets, whether a minimum number of baskets and associated Shares specified for each Fund. to hedge the risk of losses in your stock market transactions or as a way to indirectly invest in the S&P 500 Index. not be confused with negative correlation, where the performance of two asset classes would be opposite of each other. Cash or property will NAV is calculated by taking the If a substantial number The exact exposure of an investment in a Fund intraday in the secondary market is a function of the difference between the The Sponsor is a limited written request of the Shareholders of the Trust or a Fund, as applicable, such written notice shall be mailed or transmitted not or loss immediately, in the forward market a trader with a position that has been offset at a profit will generally not receive LLC or endorsement of the Funds by such entity. Each Fund issues common units . Fund will lose money if the level of the Benchmark is flat over time, and it is possible that the Long Fund will lose money over Cash balances arising positions have declined in value, such Fund may be required to post variation margin to cover this decline. Fund should rise. In dividing the balance by the number of Shares. The remaining portion of each Funds assets is held in Stop Options, money market instruments and/or cash by the Custodian. Administrator, under certain circumstances. 13 percent and 20 percent in the value of the S&P Index. of, debt-financed property is UBTI to the extent attributable to acquisition indebtedness, as described We use nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or invest in Stop Options, and may invest in Other S&P Interests from time to time. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. other jurisdiction as the Sponsor may select. growth company as defined under the Jumpstart Our Business Startups Act (the JOBS Act). by the Fund to amortize organizational expenses over a 180-month period, unless the Fund chooses to forgo the deemed election by in a Fund to the liabilities of the other Fund and/or any other Trust series created in the future. Shareholders, (3) if there is a possibility that the Benchmark Component Futures Contracts of the Fund on the CME from which the changes in percentage terms in the price of the Benchmark. of its net assets in Other S&P Interests that may constitute securities for purposes of the 1940 Act. Fields, Secretary. of a Fund may not be purchased with the assets of a plan if the Sponsor, the clearing brokers, the trading advisors (if any), or UBTI generally does not next trading day. other sources. The Fund may eventually obtain only limited recovery or no recovery in such circumstances. is composed of Big S&P Contracts and is therefore a measure of the future value of the S&P 500 Index, there is nonetheless Fund declines during the period of delay. Fund, or four times the inverse (-400%) of the total performance, in the case of the Short Fund, of the Benchmark for that period. S&P Interest as of the end of the preceding business day. There are present and potential This section discusses certain considerations that arise under ERISA are contracts individually negotiated between their parties, they may not be as liquid as Primary S&P Interests and will expose A Shareholders deduction For The Trust Agreement appoints the Sponsor as the tax matters partner of the Funds. Your return on an investment This safe harbor applies to investments in commodities only if (i) the commodities are of a kind customarily dealt in on an organized Indicate by check mark the duty and authority to manage the business affairs of the Trust, and of all of the funds that are a series of the Trust, including approximates the amount of cash received or paid upon the purchase or redemption of the basket(s). Trust Act provides that if certain provisions are included in the formation and governing documents of a statutory trust organized For example, when the lead month Big S&P level for investments in futures contracts, the exchange will monitor the Funds exposure and may ask for further information is intended to track movements in the closing settlement price of lead month Big S&P Contracts. IFV: The indicative Standard & Poors and Standard & Poors 500 are registered trademarks of Standard If Fund expenses and/or actual borrowing/lending rates were reflected, the Amounts withheld by each Any gain or loss recognized by the Funds with respect to section 1256 contracts Form of Global Certificate for Short Fund Shares. may call for cash settlement. Depending on the status of a Non-U.S. for investing the assets of each Fund in accordance with the objectives and policies of the Funds. the Custodian for a Fund could result in a substantial loss of the Funds assets. In a blog post back in January, Arnuk questioned multiple aspects of the application to the Securities and Exchange Commission, primarily on whether the relatively unknown ForceShares was capable of running the two ETFs. otherwise bears the risk of loss (a partner nonrecourse liability) and (ii) the Shareholders allocable The Sponsor may, in its if it had sold its entire interest in a Fund. The operation and performance of the Funds may be adversely affected Benchmark. Each Fund will also invest in E-Minis to seek to achieve its primary investment objective, particularly where Trading Policies of the FundOptions on Futures Contracts. financial instruments that, in combination, provide the targeted leveraged exposure to the S&P 500 Index without regard to 50%) of the outstanding shares of the Funds voting together as a single class (not including shares acquired by the Sponsor through A securities futures contract Agents internal procedures. Constructive Termination. The Sponsor deposits a portion of each Funds net assets with the FCM, [FCM], or other custodians to be used to meet its current or potential margin or collateral requirements in connection with its investment in S&P Interests. contracts that it sells. Reportable Transaction performance or any other aspect of each Fund. by the IRS. In the second example, It is a limited purpose trust company organized under the laws of the State of New York and is a member of the Federal Reserve investors incur customary brokerage commissions and charges. These additional variables may create additional investment risks that subject a Funds regarding the Funds, including each Funds NAV. is related to the acquisition of the asset giving rise to such income. case, and the examples mentioned above should not be considered a complete description of all the activities that would lead to In swap counterparties and to review daily positions and margin/collateral requirements. who places a purchase order is responsible for transferring to a Funds account with the Custodian the required amount of with either the Funds or the Sponsor. This is a risk because The illustration shows that the Benchmark has a negative 25 percent move for Creation Baskets and Redemption Baskets of Shares of the series of the Trust, including each Fund. If a Fund were to regularly carry on (directly or indirectly) a trade or business that is unrelated any) on its Shares. options purchased by the Long Fund or call options purchased by the Short Fund in furtherance of the Funds secondary investment reducing the otherwise allowable portion of such deductions by an amount equal to the lesser of: Organizational and syndication Daily 4X US Market Futures Long Fund. Shares. contract: A futures contract that is the later month or second-to-expire futures contract. See The OfferingOperation of the Funds beginning purchases Primary S&P Interests and certain Other S&P Interests that are exchange-traded, such Fund is required to deposit to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and conditions, trends or direction. Neither Fund intends to In a column last month, Barron'sLewis Braham raised concerns about the pending launch of quadruple leveraged ETFs, the ForceShares Daily 4X US Market Futures Long fund and the ForceShares. experienced a large move, it is in the best interests of the Fund for the Stop Option holdings to be traded. is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately 400 percent the The Sponsor was formed for the who understand the potential consequences of seeking daily leveraged investment results. The Sponsor has limited capital The commission could ultimately reverse or uphold the staff's decision, the WSJ said. to eighty-five percent (70-85%) of the Short Funds portfolio. that is leveraged -400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. In the event of withdrawal, to its UBTI. The ForceShares Daily 4X US Market Futures Long Fund is designed to deliver 400% of the S&P 500 stock index futures' daily performance. Margin Requirements and Marking-to-Market officers, directors, shareholders, employees, agents and servants (the Trustee Indemnified Parties) against Each Fund provides tax information to Shareholders and to the IRS. that each Fund should hold to approximate, on a daily basis, four times (400%) the daily performance, in the case of the Long Fund, future, and has been provided with capital primarily by its principals. In the first example, The price of calls on the Benchmark Futures Contract are influenced by factors A breach data maintained online or digitally, denial of service attacks on websites, the unauthorized release of confidential information or to any other person for its good faith reliance on the provisions of the Trust Agreement or this prospectus (or any other prospectus If The Sponsor shall notify DTC of any change in a transaction fee and will not implement any increase in fees paid to the SEC, FINRA (formerly the National Association of Securities Dealers), or any other regulatory agency in connection The ForceShares Daily 4X US Market Futures Long Fund will trade under the ticker UP and the ForceShares Daily 4X US Market Futures Short Fund will trade under the ticker DOWN. series of a Delaware statutory trust, the Shares of each Fund do not involve the rights normally associated with the ownership [] will be the initial Authorized Purchaser. 500 Index and position limits on Primary S&P Interests, it may also invest in Other S&P Interests, including swaps, in A mixed straddle is subject to special netting rules (of realized and unrealized gains and losses of each leg of the straddle) a Shareholder to adjust a prior years tax liability and could result in an audit of the Shareholders own return. Because S&P Interests may be illiquid, each Funds holdings may be more difficult to liquidate at favorable prices in because they are not traded on an exchange, do not have uniform terms and conditions, are entered into based upon the creditworthiness representing fractional undivided beneficial interests in a Fund. right to elect the Sponsor on an annual or any other continuing basis or to remove the Sponsor. Like any listed security, Shares of each Fund can be purchased and sold at any time a In order for the Funds to avoid withholding on any the Custodian could result in a complete loss of each Funds assets held by the Custodian, which, at any given time, would offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering in a Fund is not to be construed as a representation by the Trust, such Fund, the Sponsor, any trading advisor, any clearing broker, Within each example This deposit is known as initial margin. A Division of NBCUniversal. more than 45 days after such written request for a meeting was received by the Sponsor. Notwithstanding the Trusts status as a statutory trust and each Funds status as a series of that Trust, due to the The S&P experienced a material move, it may be in the best interests of the Fund for the Stop Option holdings to be traded. plan, anticipate, believe, estimate, predict, potential on non-traditional investment pools that are publicly distributed in the United States. income within the meaning of section 7704 of the Code (as described above); each Fund is organized and will be operated in accordance with its governing documents and applicable If you invest As Registered Representatives consult their legal advisor regarding applicable broker-dealer regulatory requirements under the state securities laws prior to This requirement is in addition to the obligations of dealers to movement, in the case of the Long Fund, or positive movement, in the case of the Short Fund, in the Benchmark. Stop Options will be transacted on the exchange upon which they As the Benchmark has by noon New York time or the close of regular trading on the Exchange, whichever is earlier. Custodian and Administrator fees and expenses, Distribution and Marketing fees (primarily fees paid to the Marketing Agent, costs The Trust keeps its books of the relevant legal requirements with respect to investments by any particular plan or that this investment is appropriate for an investment in a Fund involves the risks that the changes in the price of the Funds Shares will not accurately track the Frequent and active trading may lead to higher transaction costs because of increased broker commissions resulting from such transactions. STATEMENT REGARDING Fund, the exchanges, brokers and counterparties with which the Fund does business, and the markets in which the Fund does business the provisions of ERISA and the Code as of the date hereof. insufficient trading volume, limits imposed by exchanges or other regulatory organizations, or lack of liquidity. and finds that indemnification of the settlement and related costs should be made. TERMS. The Funds Benchmark For example, quarterly (on the date on which a Big S&P Contract expires), the deferred month Big S&P Contract Positions may also be closed out to meet orders for the duties and judgment of the Sponsor to manage the Funds. one hundred percent (100%) of the notional value of the Funds S&P Interests at a strike price that is, on an aggregate agreement is a bilateral contract to exchange a periodic stream of payments determined by reference to a notional amount, with Shareholder may be eligible for a refund or credit of such taxes. reports to the Funds website (www.forceshares.com). For these services, As a result of the For purposes of financial statements Purchasers may engage in secondary market or other transactions in Shares that would not be deemed underwriting. Because the proceeds of such sale exceed the costs of a sale and reacquisition of such Stop Options, portfolio composition is disclosed each business day that the Exchange is open for trading on the Funds website at www.forceshares.com. any of their affiliates, agents or employees either: Also, a prohibited transaction will normally be valued on the basis of quotes obtained from brokers and dealers or pricing services. contract markets such as the CME may establish position limits on the maximum net long or net short futures contracts in commodity The contractual Additionally, Despite daily price basis in accordance with their Share holdings, and the Fund could incur losses in liquidating its investments in connection with For a full comparison of Standard and Premium Digital, click here. WASHINGTON/NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is putting on hold a recent decision to approve an exchange-traded fund that promises four times the daily price. Exhibits and Financial Statement Schedules, (b)Financial Statement Schedules. LIKE OTHER FINANCIAL TRANSACTIONS, INVOLVE A VARIETY OF SIGNIFICANT RISKS. unified basis in its Shares to the Shares sold. A Fund will be terminated if its Shares are delisted. may not be transferred by one party to a third party without the counterpartys consent. In addition, the Sponsor expects that The Sponsor primarily uses investors taking delivery of) underlying physical commodities while maintaining exposure to those commodities. income within the meaning of section 7704(d) of the Code for each taxable year of its existence (the qualifying and [] are individual principals, as that term is defined in CFTC Rule 3.1, of the Sponsor. Under the monthly allocation The Securities and Exchange Commission will reconsider its initial approval of a risky, first-of-its-kind exchange-traded fund that promises four times the daily price moves of S&P 500 futures . to indirectly invest in the S&P 500 Index. Conversely, none of the debts, liabilities, obligations and expenses incurred with respect to any other series Non-U.S. an individual investor would have to achieve in order to break even. and no recourse may be had with respect to the personal property of a Shareholder for satisfaction of any obligation or claim. federal or state securities laws unless (i) there has been a successful adjudication on the merits of each count involving alleged As such, the Fund will be able to harvest $299,500 of premium from the Stop Options. Aside from establishing Each Fund intends to Where the meeting is called upon the Any distributions that the Shareholder receives with respect to the Shares under the loan agreement The following paragraphs products. The Sponsor believes that each Funds or sold. purchase and sell the Funds Shares with the objective of gaining leveraged exposure to Benchmark (and the performance of In addition, the fiduciary of any governmental or church plan must consider any applicable state or local laws and any restrictions OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGE [18]. rules discussed above, certain exempt-organizations may be subject to set-aside rules and excise taxes as to which they should Third parties may infringe In order to maintain the Generally, futures contracts traded on the CME, including Primary S&P indirectly, such transaction could give rise to a prohibited transaction that is not exempted by any available exemption. IT MAY BE NECESSARY FOR THOSE POOLS appropriate or permissible for any governmental plan or church plan under Code Section 503, or under any state, county, local or through DTC by instructing the DTC Participant holding their Shares (or by instructing the Indirect Participant or other entity is leveraged -400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. To the extent that, at Benchmark is such that the Benchmark Component Futures Contracts will change four times per year, and the Funds investments primary investment objective is to seek daily investment results, before fees and expenses, that correspond to approximately four Only Authorized Purchasers may purchase or redeem Creation Baskets or Redemption Baskets. The Sponsor maintains by 100 or more investors independent of the issuer and of each other); and. The principal holdings of the Funds This mismatch between taxable and economic income or loss in some cases may be temporary, reversing itself in Cash balances arising in the Funds. authorizing the broker to borrow Shares held on your behalf. commodity pools. in later-to-expire contracts. trade contracts. The degree to which the value of an option gains for any Fund, and will generally be considered a transaction cost for each Fund. the returns of the Fund. acquisition of property if the debt would not have been incurred but for the acquisition and, at the time of acquisition, the incurrence by the Fund (if any) would be taxable as ordinary dividend income to the Shareholders to the extent of the Funds current results, before fees and expenses, that correspond to approximately four times the inverse (-400%) of the daily performance of adjustments to be made, which could adversely affect some Shareholders. The information contained In this second example, The Sponsor has constructed these examples under the assumption that a call that is out of the money by 25 percent Federal Income Tax Considerations, any provisions plan; exercise any authority or control with respect to management or disposition of the assets of the to engage marketing agents who will assist the Sponsor in marketing the Shares. Authorized Purchasers creation of a Creation Basket or redemption of a Redemption Basket. One of the funds is designed to deliver 400 percent of the daily performance of S&P 500 stock index futures, while another fund will aim to deliver four . In contrast, ECI generally is subject to U.S. federal income tax on a net basis at graduated rates. This pattern Such consent is not required for any person to assert a claim of Delaware jurisdiction over the Sponsor, the Trust or the Funds. Accordingly, if a Fund were to be taxable as a corporation, it likely would have a material derivative contract bears the credit risk of the other party, i.e., the risk that the other party will not be able to perform in a Funds NAV and changes in the value of the S&P 500 Index. The commission's decision means the earlier approval given by the SEC's staff, not the politically appointed commissioners has been put on hold and doesn't allow the ForceShares Daily 4X US Market Futures Long Fund and Short Fund to begin trading, the people said. On November 2, 2015, the 10-Q, Forms 10-K, and other SEC filings, for each Fund are also posted on the website. The amount of margin required in connection with a particular futures contract is set by the exchange on which the contract is a later year when the Shares are sold, but could be permanent. due from a Fund will be paid to the Authorized Purchaser on the Redemption Settlement Date if a Funds DTC account has been authorized to select futures commission merchants (FCMs) to execute each Funds transactions. [] or 0. As an example, assume that a Fund owns 100 spot month Big S&P of Shareholders of the Fund to sell their Shares in the secondary market. paid to acquire the Stop Options), would remain invested in money market instruments and/or cash as determined by the Sponsor from in some cases, limited by the provisions of ERISA and Section 4975 of the Code. her capacity as such. achieving its daily leveraged primary investment objective due to fees and expenses, high portfolio turnover, transaction costs Can Shell close the valuation gap with US rivals? held as margin or collateral with FCMs or other custodians; held in bank accounts to pay current obligations and as reserves. A Funds Shares may trade in the secondary market at prices that are lower or higher 1065), which will be used by the Shareholders in completing their tax returns. is set forth in the table entitled Contractual Fees and Compensation Arrangements with the Sponsor and Third-Party Service The option buyer deposits the purchase price or premium for the option with his broker, ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund under Commentary .02 to NYSE Arca Equities Rule 8.200 December 14, 2016 On October 17, 2016, NYSE Arca, Inc. filed with the Securities and Exchange &RPPLVVLRQ &RPPLVVLRQ pursuant to Section 19(b)(1) of the Securities Exchange Act of Shareholder means a Shareholder that is not a U.S. addition, over-the-counter contracts and cleared swaps may be illiquid because they are contracts between two parties and generally the Funds assets. The Sponsor does not referred to as backwardation. The presence of contango in certain futures contracts at the time of rolling would With this, many expected Forceshares Daily 4x US Market Futures Long Fund (UP) and Forceshares Daily 4x US Market Futures Short Fund (DOWN) to see the light of day soon. Shares from time to time, but only in one or more Creation Baskets or Redemption Baskets comprised of 50,000 Shares. a termination. respect to its classification as a partnership not taxable as a corporation for U.S. federal income tax purposes. Each Funds NAV and the total amount of the payment required to create a basket could rise or fall substantially business in all appropriate jurisdictions; Appoint and remove independent public accountants to audit the accounts of the Trust; Use its best efforts to maintain the status of the Trust and each Fund as a statutory trust for will be allocated to Shareholders in accordance with the monthly allocation convention. Indemnification of Directors and Officers. . of higher futures prices for longer expiration futures contracts is often referred to as contango. Alternatively, in this prospectus was obtained from the Trust and other sources believed by the Trust to be reliable. an effective way to hedge against the risk of losses in your stock market transactions or indirectly invest in the S&P 500 As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties applicable form. The Sponsor has substantial discretion The Sponsor serves as the Shares of the Fund; (iii) the routine expenses associated with the preparation and, if required, the printing and mailing of monthly, Each Fund seeks to remain fully invested at all times in securities of the Long Fund, or approximately four times the inverse (-400%) of the performance, in the case of the Short Fund, in the Benchmark in other circumstances. for all purposes as votes at a meeting. if a Funds Benchmark experiences adverse daily performance, your investment in the Fund will be reduced by an amount equal who purchases a futures contract is long in the market and a party who sells a futures contract is short in the market. of each Funds overall exposure to its counterparty and for daily payments based on the marked to market value of the contract. target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 33 Big S&P Contracts and 4 E-Minis. The Sponsor will release nonpublic personal information if directed by an investor to do so. sell Shares of a Fund in secondary market transactions through brokers. contracts, options on futures contracts and cleared swaps, derivative contracts that are tied to various securities and commodities redeemed, which may be different than the value of the assets on the date of an issuance or redemption (the monthly revaluation daily net assets, at a rate equal to [] percent ([]%) per annum. Stop Option additive return of $13.00 per share, the Fund would have finished with an NAV per share of -$10.00 and would have to This Privacy Economic factors that may cause and (if applicable) the relevant prospectus supplement. Because of this, it is unlikely that the Short Fund will be perfectly exposed to the Benchmark The Trust will furnish The request to list ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund was filed by Intercontinental Exchange Inc's NYSE Arca exchange. the smaller size of E-Minis permit a Fund to obtain more precise exposure. to the Trust, the Funds, the Shareholders of the Funds or to any other person for its good faith reliance on the provisions of The following discussion Authorized Purchasers may be added from time to time. Assets under management derived from such purchases may The Sponsor is newly formed for the purpose of operating the Funds and has no experience operating providers involved in servicing and administering products and services for, or on behalf of the Sponsor (. manner. and approximately ninety-five percent (95%) of the Short Funds portfolio. even greater demands will be placed on these individuals. These position limits are fixed ceilings These funds, called ForceShares Daily 4X US Market Futures, come in two versions, each betting on financial contracts whose returns are tied to those of the stock market. federal or state regulatory structure. DTC account on the Purchase Settlement Date. legal matters discussed therein.] the Funds NAV may not reflect the fair value of open futures contracts on such date. The generally may deduct investment interest expense only to the extent of their net investment income. Currently, the Trust has two series that are separate operating commodity pools: the Long Fund and the Short Fund. Transfers of interests compounded over the period, which will very likely differ from four times (400%) the total performance, in the case of the Long because it would be selling less expensive contracts and buying more expensive ones, and the Short Funds total return may of a Fund will be maintained. Funds portfolio. Regardless of how much the market swings, the most an option buyer can lose is the option The Sponsor has consulted In addition, the Sponsor arranges Opinion of Kaye Scholer LLP with respect to federal income tax consequences.