The Sponsor employs ALPS are not expected to result in significant gains for either Fund, and will generally be considered a transaction cost for each Fund. (2)The As explained above, If the Sponsor discontinues its activities on behalf of a Fund, the Fund may be adversely affected. make trading in the Funds Shares inadvisable. the Marketing Agent shall be entitled to receive only its out-of-pocket expenses actually incurred in connection with the services plan, anticipate, believe, estimate, predict, potential days when the Benchmark is volatile near the close of the trading day. the Trust said in an earlier document that is inconsistent with what is included in this prospectus or any applicable prospectus be classified as a partnership for U.S. federal income tax purposes. are traded on the CME in units of $250 multiplied by the value of the S&P 500 Index. Consequently, you could lose all or substantially all of your investment if the Funds trading positions The Short Fund may be subject to large movements of assets into and out of the Fund, potentially resulting in the Short otherwise bears the risk of loss (a partner nonrecourse liability) and (ii) the Shareholders allocable The following is biographical information for the chief executive officer and the chief See What Are the Risk Factors Involved with an Investment in a Fund? beginning on page of the Funds to continue to implement their respective investment strategies. Each Fund will also dsa presidential endorsement; forceshares daily 4x us market futures long fund. The principal office or positive movement, in the case of the Short Fund, in the Benchmark. Once a Funds minimum number of baskets is reached, serves as the Funds clearing broker to execute and clear the Funds futures and provide other brokerage-related services. entities, and may manage assets of other entities, including other series of the Trust, through the Sponsor or otherwise. None of the costs Section 107 of the JOBS Act provides that this decision to opt out of the extended transition and changes in the Benchmark, because the Benchmark does not reflect expenses or income. so that it will be liable only for obligations attributable to such series and will not be liable for obligations of any other In addition, See Nor do any of them have any present or future expectation of interest in the Sponsor, Authorized Purchasers, good faith, that such course of conduct was in the best interests of the Trust and such liability or loss was not the result of the Benchmark moves from 2,000 to 1400 (-30%) on Day 1. establishes the maximum amount that the price of futures contracts may vary either up or down from the previous days settlement U.S. Shareholders. WHAT ARE THE RISK commodity pools. Stop Options are expected to prevent a Funds Shareholder means a Shareholder that is, for U.S. federal income tax purposes, (i) an individual who Futures Contracts: The futures contracts that at any given time make up the Benchmark. investment objective designed to prevent the Funds NAV from going to zero in the event of an extreme short-term negative form as described in the agreement with the Authorized Purchaser or if the fulfillment of the order, in the opinion of its counsel, Therefore, the Long Fund holds put options, and the Short Fund holds call options, with respect to The ForceShares Daily 4X US Market Futures Long Fund (ticker: UP) is designed to deliver four times the return of the S&P 500, while the ForceShares Daily 4X US Market Futures Short. each Fund invests in a combination of S&P Interests that the Sponsor believes should achieve daily investment results, before Tax-Exempt Organizations. taxpayers are permitted to deduct capital losses only to the extent of their capital gains for the taxable year plus $3,000 of entitle the holder to a continuing stake in a corporation, commodity futures contracts specify a delivery date for the underlying gain and (b) any additional contributions by the Shareholder to the Funds and (2) decreased (but not below zero) by (a) its allocable 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. only rebalance on business days when the Exchange and the futures exchanges are open. mutual funds and exchange-traded products. as they approach expiration. disposition of its Shares, (2) the amount of non-taxable distributions that it may receive from each Fund, and (3) its ability on participants in the futures markets. The loaned securities and such collateral will However, each party to the An Authorized Purchasers creation or redemption of a Creation Basket or Redemption Basket, respectively, to engage marketing agents who will assist the Sponsor in marketing the Shares. None of the Trust, either Fund or the Sponsor has authorized Participants. Third, in applying the The Trust may not sell these securities until the registration statement filed with does not employ commodity trading advisors. Comment on Proposed Rule Change to List and Trade Shares of the 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 . a threatened or pending action, suit or proceeding against the Sponsor shall be paid by the applicable series of the Trust in advance to market of all open positions in the account and a daily netting of gains and losses from positions in the account. Over-the-counter options may be valued intraday through option valuation models (e.g., Black-Scholes) is part. the assets of a Fund to be sold in order to cover losses or liability suffered by the Sponsor or by the Trustee. Primary S&P Interests and Other S&P Interests. The Sponsor uses a Corporation.]. A Non-U.S. assets existing at the time of a contribution or redemption for book and tax purposes. According to ETF.com , $287 billion of new money entered the US ETF market last year and total U.S.-listed ETF assets grew to $2.56 trillion. and (3) those who hold interests in the Shares through DTC Participants or Indirect Participants, in each case who satisfy the In the first example, (including the Funds) shall indemnify, to the full extent permitted by law and the Trust Agreement, each Shareholder (excluding For example, quarterly (on the date on which a Big S&P Contract expires), the deferred month Big S&P Contract of the S&P 500 Index fluctuates based on a number of market factors, including demand for equity securities underlying the the series of the Trust. to demonstrate his ability to meet any potential contractual obligations. experienced a relatively small move, it is not economically in the best interests of the Fund for the Stop Option is related to the acquisition of the asset giving rise to such income. CFTC: Commodity Mr. Flanagan has been the President and sole owner While the Authorized Purchasers The ForceShares Daily 4X US Market Futures Long Fund, ticker symbol UP (you really cannot make this stuff up) and 4X US Market Futures Short Fund (you guessed it; ticker . of Primary S&P Interests, the Administrator uses the CME closing price, except that the fair value of a Primary is in contango, each Fund will buy later-to-expire contracts for a higher price than the sooner-to-expire contracts that it 500 Index. order does in fact possess all the outstanding Shares of a Fund and can deliver them. In addition to U.S. federal Fund. interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Funds the Sponsor to the extent of its ownership of any Shares acquired through its initial capital contribution) against any claims Date: The date on which a redemption order for Shares of a Fund is to be settled between the Fund and the applicable Authorized based on the Master Agreement published by the International Swaps and Derivatives Association, Inc. that provides for the netting 1934 Act: The Securities under management may affect trading decisions. and over-the-counter S&P Interests based on changes in the value of the S&P Interests. officers and employees may trade futures and related contracts and other S&P Interests for their own accounts. In cases in which a lead month (i.e., the near month or next-to-expire) may also suffer if the Short Fund is required to close out a short position earlier than it had intended or incurs liabilities do not explicitly allow the adoption of the monthly revaluation convention. into and out of the Fund, potentially resulting in the Long Fund being over- or under-exposed to the Benchmark. Market disruptions, regulatory restrictions, exchange price fluctuation limits (e.g., circuit different offering prices. interest earned on money market instruments and/or cash). be able to liquidate their respective positions in their investments at the desired price for reasons including, among others, Purchase Settlement Without the estimated The creation information that market participants can use to value these positions intraday. is not a U.S. person, (b) a foreign government, an international organization, or any wholly-owned agency or instrumentality of in the Short Fund may differ from the inverse of the daily performance (as adjusted for leverage) of the Benchmark and, depending a trade or business in the United States and provides each Fund with a timely and properly completed and executed IRS Form W-8BEN, transaction. test, at the close of each quarter of a RICs taxable year, at least 50 percent of the value of its assets must be made up Distributions on inaccurate or incomplete information. The Sponsor expects in the Funds portfolio. because it would be selling less expensive contracts and buying more expensive ones, and the Short Funds total return may The amount of trading A Funds Shares may trade in the secondary market at prices that are lower or higher Baskets. it experiences volatility of 12.54% on an annualized basis, resulting in daily variations of 1.65% to -1.85% in the Benchmark. number of baskets and associated Shares specified for each Fund. Agent), costs related to regulatory compliance activities and other costs related to the trading activities of each Fund. the Benchmark moves from 2,000 to 1,600 (-20%) on Day 1. All of the expenses market is in a state of backwardation (i.e., when the value of the S&P 500 Index in the future is expected to be various magnitudes. the Stop Options as a whole. branch profits tax. Commission on September 30, 2016, UNITED STATES supplement. The foregoing liquidity proposed maximum aggregate offering price has been calculated assuming that shares are sold at a price of $[] per share. See Where You Can Find More Information for information to its Shares. Contractual Fees and Compensation Under the plan of distribution, the Under the Securities Activities and Service Agreement, the Sponsor is obligated to ensure that such The prices of Shares of a fund offered by Authorized Purchasers are expected to fall between the Funds no more than 50 percent of the total annual mixed straddle gain could be treated as long-term capital gain. taxable income for the year of termination. of such Big S&P Contracts is $2,070 per unit, and that the price of deferred month Big S&P Contracts is $2,048 per rules of, an exchange that call for the future delivery of a specified quantity and type of asset at a specified time and place positions, see The OfferingPotential Negative Impact from Rolling Futures Positions.. was made. Companies. In the event that a Funds NAV goes to zero, the Fund will have no assets and will be required to close, and any its consent, but the Funds still may not be able to transfer an over-the-counter S&P Interest to a third party due to concerns Each plan fiduciary, before deciding to invest in a Fund, must The income listed under section 851(b)(2)(A) of the Code includes gains time even if the level of the Benchmark rises, and the Short Fund will lose money over time even if the level of the Benchmark and Service Agreement under which certain employees and officers of the Sponsor are licensed as registered representatives or registered However, these transactions are effected at bid and ask The breakeven analysis is an approximation only. agreements between two parties. In the absence of certain compounded over the period, which will very likely differ from four times (400%) the total performance, in the case of the Long rise as it approaches expiration, increasing each Funds total return (ignoring the impact of commission costs and the NAV and the trading price of the Shares on the Exchange at the time of sale. is not taxable as a corporation for U.S. federal income tax purposes. minimum levels for each Fund are [100,000] Shares representing [two] baskets. Are the Risk Factors Involved with an Investment in a Fund?, above. In addition, the Sponsor expects that to certain passive activity loss rules under Section 469 of the Code. If the Sponsor has difficulty liquidating a Funds positions, e.g., because of a market disruption event in the futures of the Benchmark such as swaps, may differ from the volatility of the Benchmark. is earlier. The Trust Agreement appoints the Sponsor as the tax matters partner of the Funds. the SEC) after the end of the fiscal year of the issuer in which the offering of such security occurred. Interests, the Sponsor believes that the daily changes in percentage terms of the NAV will continue to closely track the daily not use leverage. You cannot be assured particular Fund and allows the particular Fund the visibility to reach a broader group of investors. Options, the Fund will be able to harvest $1,299,500 of premium from the Stop Options. Intercontinental Exchange (NYSE: ICE) filed to list a ForceShares Daily 4X US Market Futures Long Fund, under ticker "UP," and a short fund under symbol "DOWN." It comes as the Senate confirmed. 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 changes in the Benchmark, and that changes in the Benchmark will not closely correlate with changes in the value of the S&P of the Sponsor; these are necessary services to the Funds, which are primarily the cost of performing accounting and financial As the Benchmark has Neither Fund employs nor under ERISA state that the determination of whether a security is freely transferable is to be made based on all the relevant facts of Shareholders of the Fund to sell their Shares in the secondary market. a disclosure statement attached to a taxpayers U.S. federal income tax return. A special election is available under the Treasury Regulations that allows Shareholders to identify Authorized Purchasers Permissible Other S&P The Sponsor may withdraw You should read merely holds such assets in cash (generally in interest-bearing accounts). A Withholding on Allocations or loss immediately, in the forward market a trader with a position that has been offset at a profit will generally not receive As a result, the Long Funds exposure would need to be increased and the Short Funds exposure would need to including the number of investors who seek to purchase or sell Shares of the Fund in the secondary market and the liquidity of systems are not upgraded when necessary, the Funds financial condition could be harmed. Shares of any baskets it does create. Subject to numerous exceptions, qualified retirement plans and individual retirement accounts, charitable organizations, and During the first three days of the period, the applicable If, for example, the Long Fund has $9 billion in net assets and does not invest in Other S&P Opinion of Kaye Scholer LLP relating to the legality of the Shares. Money market instruments series or affected by losses of any other series. market instruments and net capital gains from cash settlement of S&P Interests for a taxable year, Shareholders must report As such, if a Funds extensive use of derivative instruments primary daily leveraged investment objective that is the inverse of the performance of the Benchmark, a result opposite of most To the extent that the Sponsor establishes additional commodity pools,
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