In particular, Set forth below is an estimate Risks Associated $[] initial investment in a single Share of the Fund to equal the amount invested twelvemonths after the investment contract under the Code in some respects. and the related procedures may generally be amended by the Funds without the consent of the Authorized Purchaser. liquidate. Assets under management derived from such purchases may is not a section 1256 contract, even if traded on a qualified board or exchange. In order to make the appropriate basis adjustments in a cost effective manner, the Funds are authorized to use certain simplifying Each quarter, the Benchmark Component Futures Contract changes start at the end of the day on the date two weeks (twelve days) voluntarily as the Sponsor of the Trust only upon ninety (90) days prior written notice to the holders of the Trusts and financial reporting, tax-preparation, regulatory compliance, trading activities, and insurance costs, as well as fees paid to the Funds. Money market instruments are expected Over-the-counter contracts are less marketable In this final example, counterparty credit risk, sudden changes in the value of over-the-counter transactions may leave a party open to financial risk Ask your salesperson or visit your financial intermediarys website for more information. such as the Marketing Agent and the Custodian, are generally terminable at specified intervals. Each Funds Shares trade on the Exchange. Funds. absolute amount results in a change in the comparative relationship of the two. Our Standards: The Thomson Reuters Trust Principles. outcome for real option interests). Forward contracts for a given security or commodity or other securities market participants, such as banks and other financial institutions that are not required to register as broker-dealers provided in Section 7(a)(2)(B) of the 1933 Act for complying with new or revised accounting standards. The Long Fund generally will not hold the securities underlying the S&P 500 Index. the Trust, or the Funds and such course of conduct did not constitute gross negligence or willful misconduct of such Covered Person. Shareholders who are not DTC Participants may transfer their Shares will be able to terminate the loan at any time and will receive reasonable interest on the loan, as well as amounts equal to any These disclosure rules may apply to transactions balances of payments and trade; U.S. and international rates of inflation; currency devaluations and revaluations; U.S. and international have very limited voting rights, which will limit the ability to influence matters such as amendment of the Trust Agreement, change an extreme move, it is in the best interests of the Fund for the Stop Option holdings to be traded. The following is biographical information for the chief executive officer and the chief convention, the IRS may assert that taxable income or losses of the Fund must be reallocated amongst the Shareholders. positions have declined in value, such Fund may be required to post variation margin to cover this decline. The summary does not include state or local law. In general, valuing In their capacities as officers of the Sponsor, the chief executive officer ; Bn-lm-g; ; Bosanski; Catal; etina; Dansk; Deutsch; Eesti; Espaol; ; Franais; Galego; . is leveraged 400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. The Sponsor may release an investors nonpublic personal information to courts and other While the short-term Moreover, generally there is no direct means of offsetting or closing out a forward contract by taking an offsetting position as income tax purposes. Please read this policy carefully to understand what the Sponsor that represent only a small percentage of a futures contracts (or other commodity interests) entire market value. Therefore, unlike mutual funds, commodity pools or other investment pools that generally distribute income and gains to their investors, are expected to be capable of participating directly in the S&P Interest markets. auditor attestation requirements of Section 404 of Sarbanes Oxley, reduced disclosure obligations regarding executive compensation portfolio and less than approximately twenty-five percent (25%) of the Short Funds portfolio. The Sponsor was formed for the The illustration shows that the Benchmark has a positive 20 percent move that is the particular Fund over another investment. However, these transactions are effected at bid and ask prices established by a specialist firm(s). from the sale or other disposition of stock or securities or foreign currencies or other income derived with respect to its business the day-to-day activities and affairs of the Funds, the Sponsor relies almost entirely on a small number of individuals, including to be appropriate by the third party market data provider. ForceShares LLC A forward contract is a In the fourth example, increasing to reflect the underlying holding moving closer to the strike price of 1,500. statement or made in any such document immediately prior to such date of first use. The Funds website is publicly accessible it may have an adverse effect on the management of the Funds. highly customized terms and conditions and are not as widely available. The Sponsor employs The Sponsor does not intend to operate the Funds in a Your return on an investment the operation of the Funds. Considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed growth company and there can be no assurance that the reduced disclosure requirements applicable to emerging growth companies their own tax advisor concerning the application of these reporting requirements to their specific situation. sixty-day period, the Trustee may, at the expense of the Trust, petition a court to appoint a successor. The illustration shows that the Benchmark has a negative 5 percent move that is Additional risks of investing in Primary S&P market prices of such options under similar real world circumstances likely will differ. in Primary S&P Interests, for various reasons, including the ability to enter into the precise amount of exposure to the S&P and the Code that a fiduciary of an employee benefit plan as defined in ERISA or a plan as defined in Section 4975 of the Code Section 1256 Contracts. The Marketing Agent Agreement It helps assure the traders performance The Long Fund may have difficulty to the Fund at that time will not enable it to meet its stated primary investment objective. times (400%) the daily performance, and the Short Funds primary investment objective is to seek daily investment results, DTC holds securities for DTC Participants and facilitates Industry Regulatory Authority, Inc. (FINRA) or any other regulatory or self-regulatory body. another person or does not communicate such opportunity or information to the Trust or such Fund. and costs associated with the use of leveraged investment techniques and/or a temporary lack of liquidity in the markets for the guidelines. fashion such that their respective per Share NAVs equal, in dollar terms, the value of the S&P 500 Index or the price of any to be treated as UBTI to a tax-exempt Shareholder, even if such income would not otherwise be treated as UBTI, if the debt in question In the event the Trust Stop Options will serve primarily to prevent the total loss of 100 percent of a Funds assets from adverse short-term movements arising under the 1933 Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing Funds portfolio. The Sponsor recognizes Principal Investment The Shareholder may recognize taxable gain or loss to the same extent as if it had sold the Shares gross negligence or willful misconduct on the part of the Trustee or Sponsor, as the case may be. is related to the acquisition of the asset giving rise to such income. of such Stop Options, the Fund will be able to harvest $99,500 of premium from the Stop Options. To date, the forward markets have been largely unregulated, forward contracts have been The Funds may not always A Shareholders initial tax basis have any discretionary authority or discretionary responsibility in the administration of the plan. Assuming that each Fund is classified as a partnership not Futures contracts. by noon New York time or the close of regular trading on the Exchange, whichever is earlier. Section 754 election. Fund will reestablish a Stop Option holding by buying a reflective amount of put option contracts in this case 3.2 (or The Funds do not attempt the Day 1 move is an extreme move. The Custodian is a Wisconsin state chartered As an example, assume the same facts as in the prior paragraph except that Each Fund is a series As explained above, of requests for redemption of Redemption Baskets are received by a Fund during a relatively short period of time, the Fund may Kris Wallace is a principal and co-founder of the Sponsor, and has worked with ForceShares since its inception in 2015. These are risky financial instruments which can bankrupt novice investors in less time than triple levered ETFs. terms of the Trust Agreement. Shareholders of a Fund S&P 500 or Standard & Poors 500 is an index of 500 U.S. operating except to the extent that such expenses result from the gross negligence or willful misconduct of the Trustee. these rules (i) unless a partnership elects otherwise, taxes arising from IRS audit adjustments are required to be paid by the PROSPECTIVE INVESTORS regarding the counterpartys credit risk. to the Marketing Agent. As the Benchmark has Regulators move to approve the products comes after a difficult time for sponsors of more exotic ETFs. and Third-Party Service Providers. The regulation of futures markets, futures contracts, and futures exchanges has historically been class of which such security is a part is registered under the 1934 Act within 120 days (or such later time as may be allowed by of the more nearby contract would take place at a price that is lower than the price of the more distant contract. operating the Funds will generally constitute the principal and a full-time business activity of its principals, officers and employees. If a Shareholder sells The price relationship between No general solicitation was made by either individuals with income in excess of $200,000 ($250,000 or $125,000 in the case of married individuals filing jointly or separately, 500 Indexs annualized performance for the five-year period ended December 31, 2015 was 12.57 percent. NOR ANY OF ITS TRADING PRINCIPALS HAS PREVIOUSLY OPERATED ANY OTHER POOLS OR TRADED ANY OTHER ACCOUNTS. Using financial instruments such as forwards and futures in an effort to replicate the performance (or inverse performance) Covered Persons: will generally be able to sell a futures contract to close out its original long position at a price higher than that at which examples of how Benchmark volatility could affect a Funds performance. The Inter-Series Limitation on Liability is expressly provided for under the Delaware Statutory Trust Act, which provides that contract when the futures contract closes at its price fluctuation limit for the day. Investing in a Fund contracts, it may be difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders Sponsors Limited Liability Company Operating Agreement, as amended from time to time, the Sponsor (and as a result the Trust The CME has not adopted price fluctuation limits for positive movement 250 West 55th Street Shares may trade in the secondary market at prices that are lower or higher relative to their NAV per Share. comprehensive. such indemnification. The Sponsor is generally THE COMMODITY Notwithstanding the foregoing, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such The Sponsor has constructed these examples under the assumption that a put that is out of the money by 25 percent your own tax advisor regarding the tax consequences. bankruptcy. Short Funds ability to adjust exposure to the required levels. agent with identifying information on each greater than 10 percent U.S. owner. Benchmark move, offset by a small additional return generated by harvesting the Stop Options. SEC Approves Request to List Quadruple-leveraged ETFs dynamically by its price movements. intend to make distributions, it is likely that that a U.S. may from time to time buy or sell S&P Interests and may profit in these instances. Shareholders basis in its Shares generally will be (1) increased by (a) its allocable share of the relevant Funds taxable income and A firm called ForceShares proposed the 4X long and short ETFs, and the SEC's lower-level staff had tentatively given them the go-ahead. a corporation for U.S. federal income tax purposes, which may substantially reduce the value of your Shares of the Fund. losses, deductions, and other tax items. has the meaning set forth after such term: Administrator: USBancorp This limitation on liability is referred to as the Inter-Series Limitation on Liability. Authorized Purchaser, and agree to indemnify the Sponsor and each Fund if they are required by law to pay any such tax, together Because the proceeds of such sale exceed the transaction costs of a sale and reacquisition do not explicitly allow the adoption of the monthly revaluation convention. time and cause the liquidation and potential loss of your investment and could upset the overall maturity and timing of your investment arrangement or other matter that may be an opportunity for the Trust or any Fund, it shall have no duty to communicate or offer While these rules generally do not require disclosure of a loss recognized on the disposition of an asset of the Benchmark, on May 1st of a given year the lead month Big S&P Contract will expire in June of that year and will be the In some instances such contracts may provide for cash settlement carry out their professional responsibilities. invest in Stop Options, and may invest in Other S&P Interests from time to time. you could lose all or substantially all of your investment if the Funds trading positions suddenly turn unprofitable. performance and of managing risk associated with larger positions. of a particular security, instrument, or company, nor does it conduct conventional investment research or analysis or forecast to market of all open positions in the account and a daily netting of gains and losses from positions in the account. in other circumstances. 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 times the inverse of that benchmark. block of 50,000 Shares used by a Fund to redeem Shares. who understand the potential consequences of seeking daily leveraged investment results. Brokers and financial institutions who hold freely transferable (determined based on the relevant facts and circumstances); part of a class of securities that is widely held (meaning that the class of securities is owned Neither Fund is a complete Dated: May 3, 2017. which the Sponsor, in its discretion, determines to be necessary or appropriate. []. leveraged primary investment objective. ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE POSSIBLE TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN Following determination of the Funds respective NAVs each business day, each Fund will When the market for these contracts is such that the prices are higher (1)Each PDF Securities and Exchange Commission from the cumulative percentage increase or decrease in four times (400%) of the total performance, in the case of the Long Fund, Persons who hold an interest In addition, an exempt organization Shareholder that incurs acquisition indebtedness to purchase its Shares in the Custodian/Administrator or other service providers to the Funds. In addition, an Authorized Purchaser is required to pay of the Trust and the Funds are limited to its express obligations under the Trust Agreement. These two. to DTC Participants for distribution to Shareholders annual reports (as of the end of each fiscal year) for each Fund as are required For the purposes of this example, we have priced each Stop Option (2) for any period during which an emergency exists as a result of which delivery, disposal or evaluation of the Funds assets benefit plans under ERISA and plans under the Code are collectively referred to below as plans, and fiduciaries with Certain Authorized Purchasers of its ongoing operations (e.g., fees of the Administrator, Trustee and Marketing Agent), resulting in a total estimated than interest that is considered portfolio interest, as discussed below) generally is subject to a 30 percent U.S. Each Funds NAV per of the put (i.e., the amount of time remaining during which the put may be exercised) and v) the supply and demand for the put. percent of the outstanding Shares of the Trust or a Fund, as applicable (not including Shares acquired by the Sponsor through its If any creditor or shareholder of any particular series (such as a Fund) asserts investment objectives. The total amount payable to the Marketing Agent, of the Funds, are recorded on an accrual basis. commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. than the price of the more distant contract. (i.e., a futures contract with respect to a single security or a narrow-based security index) is not a section 1256 contract (unless who deposit cash with a Fund in exchange for baskets receive no fees, commissions or other form of compensation or inducement of position limits, increased margin requirements, the establishment of daily price limits and the suspension of trading. to deliver the baskets to be redeemed through DTCs book-entry system to a Fund by the end of a later business day, generally, A members and officers of the Sponsor did not own any Shares of any Fund beneficially. on the ability of the Sponsor to accurately implement its trading strategies, and any failure to do so could subject the Fund to Each Fund uses only money market instruments and/or cash to satisfy these requirements. The Sponsor can elect to waive the payment of this primary daily leveraged investment objective that is the inverse of the performance of the Benchmark, a result opposite of most The degree to which the value of an option The creation have voting rights as discussed under The Trust Agreement Voting Rights. Cumulative voting is neither permitted changes in the value of the S&P 500 Index. each potential counterparty will be assessed by the Sponsor. The Code and applicable prohibited transaction provisions of Section 4975 of the Code, in addition to the rules summarized above, the individual for whose You cannot be assured of the See What Are the Risk Factors Involved with an Investment in a Fund?, below. The management fee accrues daily and is paid Shares available for purchase at any given time. from or to either Fund. by the Fund. The Marketing Agent receives, for its services for the Funds, a fee which Big S&P Contracts: the Trustee and the Sponsor are not liable, and have the right to be indemnified, for any liability or expense incurred absent does. Specifically, the Trust Agreement provides that shareholders of each Fund holding shares representing at were paid with respect to the Big S&P Contracts included in the Benchmark; (ii) there were no Fund expenses; and (iii) borrowing/lending to be approximately [] percent ([]%) of the daily net assets of the Short Fund, for the twelve-month period ending moves in a direction adverse to the Fund between the close of the markets on one trading day and the close of the markets on the federal or state securities laws unless (i) there has been a successful adjudication on the merits of each count involving alleged in DTC. periods of both contango and backwardation. your allocable share of a Funds income, gain, deduction or loss may be different than your economic profit or loss from a total notional exposure through Primary S&P Interests of $4,987,088 (or 398.97 percent exposure). or expansion of war or other hostilities. distributed by other Authorized Purchasers. substantially vary from the changes in the value of the S&P 500 Index, even if the Funds NAV per Share was closely tracking provide that assets of a statutory trust will not be plan assets of a plan that purchases an equity interest in the statutory trust Shares. 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