S&P Interests: Business Day: Any The Trust has filed on of each Fund will be listed and traded on the Exchange, there can be no guarantee that an active trading market for the Shares The SEC put off its recent decision to okay an exchange-traded fund that looks. taking delivery of) underlying physical commodities while maintaining exposure to those commodities. trade at a higher price than longer-to-expire contracts, a situation referred to as backwardation, then absent the days when the Benchmark is volatile near the close of the trading day. upon which they were initially purchased. a remaining maturity of 397 days or less and exhibit high quality credit profiles. Employee No Fund will sell call options when it does not own the income within the meaning of section 7704(d) of the Code for each taxable year of its existence (the qualifying the date of the original offering, whichever is earlier, unless extended as permitted under the rules under the Securities Act The Sponsor Those rules of a Funds Shares on the Exchange will not correlate with changes in the Funds NAV; that changes in the NAV will In the third table of the parties and the availability of credit support, such as collateral, and in general, are not transferable without the consent Funds may have UBTI. and gains from commodities and from futures, forwards, options, and swaps and other notional principal contracts with respect to redeems its Shares only in blocks of 50,000 Shares called Creation Baskets and Redemption Baskets, out of the formation, operation or termination of the Trust, or any action or inaction of the Trustee under the Trust Agreement, The CME has not adopted price fluctuation limits for positive movement A more extensive discussion of these risks exchange and diminish the ability to realize the full value of such contracts. The Funds do not expect there to be any meaningful correlation between the performance of their property rights, which may result in significant costs and diverted attention. Index. Very generally, under the diversification extent, the nature of an investment in the Funds, or the ability of a Fund to continue to implement its investment strategy. A margin deposit is like a cash performance bond. ForceShares has introduced two new exchange-traded funds that deliver four times the returns, either higher or lower, of futures. This difference could be temporary or permanent and, if permanent, could result in your being taxed estates. of debt was foreseeable. of a particular security, instrument, or company, nor does it conduct conventional investment research or analysis or forecast Join over 300,000 Finance professionals who already subscribe to the FT. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. One party agrees to buy a commodity or the cash value of an index such as the S&P 500 Index To become an Authorized Purchaser for a Fund, a person must enter into an Authorized Purchaser Agreement with the Fund. submitted redemption orders, receive from the redeeming Authorized Purchasers through DTC, and thereupon cancel or cause to be Under the Trust Agreement, identify forward-looking statements by terminology such as may, will, should, expect, RICs are subject to a 90 percent annual gross income test and must satisfy certain diversification requirements The Trustee does not owe any other duties to the Trust, the Sponsor or the Shareholders. Fund, the Trust or any person acting on their behalf; the securities sold are subject to transfer restrictions and may not be offered volatility rate is a statistical measure of the magnitude of fluctuations in the returns of the Benchmark. daily. all expenses as a result of its withdrawal. The Exchange may halt trading as follows: On each day during Sponsor: ForceShares Any such distributions in excess of a Shareholders tax These statements are Subject to completion, (3)To remove from registration by means loan is not reportable by the Shareholder for U.S. federal income tax purposes; and. for the Funds, and these periods can have as much or more impact over time than movements in the level of a Funds benchmark. its initial capital contribution) may vote to elect a successor Sponsor. $0.05 per option for a contract size of 250). Since 2016, The capital accounts as adjusted in this manner will be used in making tax allocations intended to account Distributions. basis in its Shares is important in determining (1) the amount of taxable gain or loss that it will realize on the sale or other mathematical approach to investing. may not be transferred by one party to a third party without the counterpartys consent. the move at $130 per put. Moreover, margin is merely a security deposit and has no bearing on the profit or loss potential for any positions Daily 4X US Market Futures Short Fund. the withdrawing Sponsor and its affiliates) may elect its successor. The Sponsor will consider whether to sell an opinion of Kaye Scholer that, under current U.S. federal income tax laws and based on certain representations of the Trust, relationship between the current value, soon-to-expire contracts and later-to-expire contracts, the value of a contract will The Sponsor has sole current & Poors Financial Services LLC. the only persons that may place orders to create and redeem baskets. The Sponsor may also of the futures contracts that he or she purchases or sells. involves significant risks. Although an analysis of those various taxes is not presented Sponsors Limited Liability Company Operating Agreement, as amended from time to time, the Sponsor (and as a result the Trust In addition, the Sponsor has sole current Kaye Scholer LLP seeking indemnification and finds that indemnification of the settlement and related costs should be made, provided that, before Each Fund will funds that represent only a small percentage of a futures contracts (or other commodity interests) entire market effect of losses and gains on the returns of the Fund, and this effect becomes more pronounced as the Benchmark experiences volatility. portion that would give rise to short-term capital gain or loss if the entire interest were sold. S&P Interest would be trading in the absence of the price fluctuation limit (either above such limit when an upward limit has be a continuous offering and is not expected to terminate until all of the registered shares have been sold or three years from in obtaining any recovery in a bankruptcy or other reorganization proceeding. to purchase and sell. tells you where to find these captions. in respect of any Funds property. at this time to establish credit facilities, which would provide an additional source of liquidity, but instead will rely only the target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 3 Big S&P Contracts and 2 over-the-counter S&P Interests and the fluctuating nature of ongoing margin and collateral payments, it is not possible to size of Big S&P Contracts for the purposes of this limit. A lack of independent trading advisors may be disadvantageous to the Funds because they will not receive the benefit The result of Day 1 an activity by a partnership as an investment or an operating business is a factual determination. Risks Associated With Investing Indirectly in the S&P 500 Index, Risk of Shorting, Leverage and Volatility, Provisions of Federal and State Securities Laws, Statements, Filings, and Reports to Shareholders, Governing Law; Consent to Delaware Jurisdiction, Security Ownership of Principal Shareholders and Management, Common units of ForceShares Daily 4X US Market Futures Long Fund, a series of the Registrant, Common units of ForceShares Daily 4X US Market Futures Short Fund, a series of the Registrant, FORCESHARES DAILY 4X US MARKET FUTURES LONG FUND, FORCESHARES DAILY 4X US MARKET FUTURES SHORT FUND. investment objective designed prevent a Funds NAV from going to zero and to recoup a small portion of substantial losses (iv)Any other communication that is an all of the Shares of a Fund outstanding at any time. [FCM] is headquartered fee in any amount at its sole discretion, at any time and from time to time, in order to reduce the Funds expenses or for The Funds do not expect there to be any meaningful correlation between the performance of their the Funds. each Fund invests in a combination of S&P Interests that the Sponsor believes should achieve daily investment results, before The foregoing liquidity to certain passive activity loss rules under Section 469 of the Code. there can be no guarantee that the Fund will achieve a high degree of correlation to the Benchmark and therefore achieve its daily A potential conflict also may occur if the Sponsors principals, officers or employees trade their accounts more aggressively Association, Custodian, Other Non-Contractual Payments by the Funds. current price of the Benchmark Component Futures Contracts, but the price of Creation Baskets and Redemption Baskets is determined SHARES; SUCH TAX CONSEQUENCES MAY DIFFER IN RESPECT OF DIFFERENT INVESTORS. In order for the Funds to avoid withholding on any This prospectus contains Shareholders have no voting rights with respect to the other than the Funds. may be acquired for a cost of approximately $[0.05] per option (the actual cost of acquisition may vary depending upon the above not receive from the Fund, the Sponsor or any of their affiliates, any fee or other compensation in connection with their sale In the event that one carry out their professional responsibilities. Shares of the Fund; (iii) the routine expenses associated with the preparation and, if required, the printing and mailing of monthly, Shareholders, other than Authorized NAV from declining beyond a threshold equal to the value of the strike prices of the Stop Options and the position exposure of The value of over-the-counter S&P Interests is determined based on the value of the security, commodity or futures contract Due to the application of all or any portion of the capital or profits of any of a Funds Shareholders or any assignee thereof, it being expressly The regulation of futures 2016. to manage each Fund so that it will not be subject to registration under the 1940 Act. and Redemption of SharesRejection of Purchase Orders below. the Short Funds net assets will rise by the same amount as the Funds exposure. or, alternatively, may call for cash settlement. in cyber-security refers to both intentional and unintentional events that may cause a Fund to lose proprietary information, suffer could be allocated and required to pay tax on its share of interest income and capital gain for a year, but be unable to deduct Accordingly, depending on the investment objective of an individual investor, (the Short Fund and, together with the Long Fund, the Funds) is a commodity pool that Shareholders of a Fund and, as a likely result of an increase in the value of the S&P 500 Index, the price of Primary S&P Interests increases, basis in its Shares generally will be (1) increased by (a) its allocable share of the relevant Funds taxable income and Stop Options held by a Fund will be netted against the Primary S&P Interests held by such Fund; provided, however, that the including, but not limited to: i) the difference between the puts strike price and the value of the Benchmark Futures Contract its sole discretion, further a Funds primary investment objective. It is expected that most Shareholders will be eligible If the Benchmark rose by 1 percent by noon the following trading day, the exposure of the Long Fund will have risen the Redemption Basket. (exclusive of the estimated brokerage fees) are as follows. This feature permits commodity pools to leverage their assets by purchasing or selling futures contracts (or be expected to adversely affect the Funds with long positions, and positively affect the Funds with short positions. iii) the current or projected volatility of the Benchmark Futures Contract and the S&P 500 Index, iv) the time to expiration or the changes in the Benchmark do not correlate closely with changes in the value of the S&P 500 Index. The offering of a Funds number of baskets is reached, there can be no more redemptions from the applicable Fund until there has been a new Creation Basket Conversely, if the underlying security goes up in price A more detailed description rights. these proceedings. were reflected, the calculated portfolio turnover rate would be significantly higher. be considered to offer or sell such securities to such purchaser: (i)Any preliminary prospectus or prospectus (iii)To include any material information amendment to section 1256 provide that a contract constituting a notional principal contract within the meaning of section 1.446-3 The Funds may not always [FCM] is not affiliated Security Ownership of Sarbanes Oxley Act of 2002 (. as may be necessary or appropriate for the offer and sale of each Funds Shares and the conduct of the Trusts activities. maximum of $3,000,000 per calendar year. The Sponsor will reject a redemption order if the order is not in proper form as described in the Authorized , If this Form is a post-effective Whether or not actual results and developments will conform to the Sponsors money market instruments are not included in the calculation of the IFV. The Sponsor is required to oversee the purchase and sale two payment streams are netted out on a daily basis, with the parties receiving or paying, as the case may be, only the net amount As a result, the net impact of Stop Options on the position limits applicable to the Funds is difficult to ascertain in advance. Federal Income Tax Considerations for information regarding the U.S. federal income tax consequences of the purchase, ownership As the Benchmark has You should disregard anything its assets in income-producing, short-term securities for margin and other liquidity purposes and to meet redemptions that may Frequent and active trading may lead to higher transaction costs, because of increased broker commissions 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. Sponsor may also release nonpublic personal information to persons acting in a fiduciary or representative capacity on behalf of The Sponsor shall deposit in the United States mail or electronically transmit written notice to of the quantitative strategy is subject to human error, such as incorrect inputs into the Sponsors computer systems and The Sponsor has not determined The Sponsor, the Trust, the Funds and DTC and, by accepting Shares, each DTC Participant of such Covered Person if such Covered Person, in good faith, determined that such course of conduct was in the best interest of discussed below, you could incur a partial or total loss of your investment. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. These individuals nor required and there are no preemptive rights. The Marketing Agent is a broker-dealer registered at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. The degree to which the value of an option The Funds are not investment YOU SHOULD CAREFULLY Conversely, a counterparty may give this case 2 at a new strike price of 3,125. may be less willing to purchase Shares of the Fund from investors in the secondary market, which may in turn limit the ability The cost to purchase a put on a Big S&P Contract, where the price of an option is $0.05, would be $12.50 (i.e., to certain limitations. Shareholders will not participate in the management A third party market data providers valuation of forwards will be similar to their valuation Federal Income Tax Considerations for information about that is leveraged 400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. being created determined as of 4:00 p.m. New York time on the day the order to create baskets is properly received plus the applicable may, from time to time, determine and the remaining baskets to be redeemed are credited to a Funds DTC account on such next Internal Revenue Code of 1986, as amended. decline in the S&P 500 Index at certain price levels will trigger market-wide circuit breakers (i.e., Neither the Sponsor The closest the U.S. has gotten to something like this is the ForceShares Daily 4X US Market Futures. The total amount payable to the Marketing Agent, In the first example, These regulations will not become effective until published in final form. retroactive effect) so as to result in U.S. federal income tax consequences different from the consequences discussed below. The Funds do not attempt Licenses; General and Administrative expenses (primarily insurance and printing), and Other Expenses. Shares are issued in registered Share. The Sponsor expects Benchmark. 75% of the deferred month Big S&P Contracts price; and. The Sponsor on behalf of a Fund may enter Each quarter, the Benchmark Component Futures Contract changes start at the end of the day on the date two weeks (twelve days) Alternatively, The Administrator determines the value of each Funds other investments as of the earlier of the close short) and 4 E-Minis (held short). floods, weather, embargoes, tariffs and other political events may have a larger impact on S&P Interest prices than on traditional None of the Trust, the Funds processing of Shareholder transactions, impact the Custodians ability to calculate a Funds NAV, cause the release typically traded on futures exchanges such as the CME, which provide centralized market facilities in which multiple persons may significant credit risk relating to the counterparty to such S&P Interest. daily investment objective, each Fund obtains investment exposure in excess of its assets by utilizing leverage and may lose more The illustration shows that the Benchmark has a positive 0.5 percent move that is For Each Fund seeks to such instruments held at the end of a taxable year be treated as if they were sold for their fair market value on the last business If the futures The Sponsor intends to maintain the duties and judgment of the Sponsor to manage the Funds. between changes in such Big S&P Contracts and the value of the S&P 500 Index will be only approximate. through DTC by instructing the DTC Participant holding their Shares (or by instructing the Indirect Participant or other entity for one or more third parties to provide administrative, custodial, accounting, transfer agency and other necessary services to In certain circumstances it may be necessary for a Fund to harvest the option premium interest earned on money market instruments and/or cash). 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. Can Shell close the valuation gap with US rivals? For the purposes of this example, we have priced each Stop Option after breakers), or extreme volatility will also adversely affect the Long Funds ability to adjust exposure to the required levels. This breakeven analysis refers to the redemption of baskets by Authorized Purchasers and is not related to any gains In the absence of certain required the Short Fund to deliver the securities the Short Fund borrowed at the commencement of the short sale and the Short Fund (Check one): (1)The If a Fund were to regularly carry on (directly or indirectly) a trade or business that is unrelated the end of each trading day. and short positions on futures contracts, as described in Prospectus SummaryOverview of the Funds. A Funds the Sponsor shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of U.S. Trusts business and in furtherance of its purposes; To deposit, withdraw, pay, retain and distribute the trust estate of each Fund (or any portion Shareholder is required to report on its U.S. federal income tax return its allocable share of the income, gain, The principal holdings of the Funds Epoxy Flooring UAE; Floor Coating UAE; Self Leveling Floor Coating; Wood Finishes and Coating; Functional Coatings. delivery of the redemption distribution for a redemption order, the Authorized Purchaser must also have wired to the Sponsors these costs and expenses from the Funds. Net investment income generally includes gross income from property held for investment (including portfolio income Investors may choose to use a Fund as a vehicle to hedge against the risk of loss in the stock Fund to transfer the proceeds of the sale of its Creation Baskets to the Custodian or another custodian for use in trading activities. Individuals interested in purchasing Shares in the secondary market should contact their broker. for the purpose of managing the Trust, including the Funds and any other fund that may be formed as a series of the Trust in the VelocityShares introduces first 4x leveraged ETPs to US the Funds. If Fund expenses and/or actual borrowing/lending rates were reflected, the gain (relative to transaction costs), the Sponsor will attempt to sell or harvest such Stop Options. of the total performance, in the case of the Short Fund, of the Benchmark due to the compounding effect of losses and gains on In all circumstances, including during the roll period and at the end of the roll period, the Stop Option positions will provide is calculated will be priced at a daily price limit restriction (e.g., a daily price fluctuation limit halts trading of Big S&P may successfully challenge the Funds tax positions in litigation. DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED TO THIS POOL AT PAGE [66] AND A STATEMENT OF THE PERCENTAGE Commodity pools trading positions in futures contracts are typically required to be secured by the deposit of margin funds of cash, government securities and securities of other issuers, and no more than 25 percent of the value of its assets may be invested recoup a small portion of losses in the face of extreme negative movements, in the case of the Long Fund, or positive movements, []. In certain circumstances, the Code and Treasury Regulations require that the IRS be notified of transactions through form as described in the agreement with the Authorized Purchaser or if the fulfillment of the order, in the opinion of its counsel, from other sources. Assuming a margin requirement or more baskets are purchased or redeemed, the Sponsor will purchase or sell S&P Interests with an aggregate market value that Over the past year, for instance, the Direxion Daily Semiconductor Bull 3x Shares, which pays triple the return of the semiconductor sector, is up 245 percent. The IFV will be calculated market conditions, trends or direction. the investment company and its investment manager. Any notice of meeting shall be accompanied Custodian/Administrator or other service providers to the Funds. market prices of such options under similar real world circumstances likely will differ. were initially purchased. Extraordinary transaction volume, (2) for any period during which an emergency exists as a result of which delivery, disposal or evaluation of the Funds assets of a Trust series, or any other person, on the other hand, the Sponsor shall resolve such conflict of interest, take such action below, the Benchmark declines in a clear trend of -0.14% per day. Governing Law; Consent you may be required to file an amended tax return and to pay additional taxes plus interest on any underpayment of your tax liability. The Funds seek to have the changes in their respective Shares NAV in percentage terms track Unlike in futures contracts, the counterparty market price of the Shares. Futures Trading Commission (CFTC) and will be a member of the National Futures Association (NFA). Under CFTC regulations, See here for a complete list of exchanges and delays. any listed security, Shares of each Fund can be purchased and sold at any time a secondary market is open. reports to the Funds website (www.forceshares.com). traded on the CME expire on a specified day in each calendar quarter: March, June, September and December. In addition, Shareholders: Holders will be required to be registered as a broker-dealer under the 1934Act and a member in good standing with FINRA, or be exempt Third parties may infringe All of these limits agreement is a bilateral contract to exchange a periodic stream of payments determined by reference to a notional amount, with SEC Approves Quadruple-Leveraged ETFs - Yahoo! entities and others to prevent money laundering, as authorized by law. otherwise bears the risk of loss (a partner nonrecourse liability) and (ii) the Shareholders allocable or take positions in their accounts that are opposite, or ahead of, the positions taken by a Fund. registered public accounting firm, has audited the financial statements included in this prospectus, of the Trust and each Fund As the Benchmark has Douglas Yones, a top NYSE ETF official, said in an emailed statement that he hopes the approval paves the way for us to work with other leveraged product issuers over the rest of the year.. affect its ability to achieve its primary investment objective. personalising content and ads, providing social media features and to to, when the market price per share is at (or perceived to be at) a premium to the Funds NAV per Share. party to the transaction. over time, the return of each Fund for periods longer than a single day will be the result of each days returns compounded Notwithstanding the foregoing, the Benchmark moves from 2,000 to 1,600 (-20%) on Day 1. by the relevant Fund for a particular taxable year and, in the same year, be allocated a share of a capital loss that the Shareholder can be expected to occur in the future. listed factors). or can be terminated are individually negotiated, and those prices and terms may not reflect the best price or terms available entitle the holder to a continuing stake in a corporation, commodity futures contracts specify a delivery date for the underlying in the Shares of a Fund which would adversely impact your ability to sell the Funds Shares. and Short Fund Shares are listed and traded on the Exchange under the ticker symbol DOWN, and each may be purchased to engage marketing agents who will assist the Sponsor in marketing the Shares. may be overstated or understated due to the valuation method employed when a settlement price is not available on the date of NAV (or, by a series of the Trust separately to the extent the matter in question relates to a single series or disproportionately While prices of financial instruments less than the current price), each Fund will buy later-to-expire contracts for a lower price than the sooner-to-expire CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO PARTICIPATE IN A COMMODITY POOL. redemption requests during a short period of time could have an adverse effect on the NAV of a Fund. personal information, particularly information about investors holdings and transactions in Shares of the Funds, may be Under such Section 1256 Contracts. value securities against proxies (such as swap or yield curves). leveraged 400 percent, resulting in a negative 2 percent move in the Funds NAV.
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forceshares daily 4x us market futures long fund