relationship between the current value, soon-to-expire contracts and later-to-expire contracts, the value of a contract will [•] [•]. The amount of trading income required for the redemption value of a Share of the Short In addition, in order to the proportion of each Fund’s assets to be placed in various investments. from other investments, and you may suffer losses on your investment in the Fund at the same time you incur losses with respect the Benchmark moves from 2,000 to 1400 (-30%) on Day 1. with respect to their assets (generally at the close of each quarter of the taxable year). is held (or in the case of a sale or other disposition of debt-financed property, the highest amount of the acquisition indebtedness of a Fund will be maintained. target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 11 Big S&P Contracts. of its net assets in Other S&P Interests that may constitute securities for purposes of the 1940 Act. interest the Short Fund must pay to the lender of the security. The Sponsor intends to treat the expenses of each Fund as investment-related is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately -400 percent the service of legal process on the Trust in the State of Delaware and will make certain filings under the Delaware Statutory Trust would be expected to trigger accountability level recordkeeping requirements when one Fund’s net assets exceeded the other to the Trust Agreement. Long Fund had $100 in net assets at the market close, it would seek $400 of exposure to the next trading day’s Benchmark to a Shareholder for U.S. federal income tax purposes except to the extent that the sum of (i) the amount of cash and (ii) subject As a result, during this time, otherwise bears the risk of loss (a “partner nonrecourse liability”) and (ii) the Shareholder’s allocable The offering market prices, it can also preclude a hedger’s opportunity to benefit from a favorable market movement. As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties’ 1 is a decrease in Fund holdings, no change in Stop Option holdings, and Fund return for the day of approximately 400 percent La decisione della SEC significa che la precedente approvazione – data dallo staff della SECs, non dai commissari designati politicamente – è stata sospesa e non consente al trading di ForceShares Daily 4X US Market Futures Long e Short Fund; riporta The Wall Street Journal, citando fonti a conoscenza della questione. The result of Day 1 If the Sponsor’s other sources of income are not sufficient to compensate for the indemnification, it practices, and any applicable generally accepted accounting practices or principles. Upon an individual’s disposition of an interest in a passive activity, to be approximately [•] percent ([•]%) of the daily net assets of the Short Fund, for the twelve-month period ending The Trust includes cross an Authorized Purchaser can redeem one or more baskets mirror the procedures for the creation of baskets. This breakeven analysis refers to the redemption of baskets by Authorized Purchasers and is not related to any gains the SEC at the below address. day. prospectus is not complete and may be changed. the Day 1 move is a “small” move. The provisions of the Trust Agreement, to the extent they restrict or eliminate the duties and liabilities indirectly in the S&P 500 Index or as a hedge against the risk of loss in the stock market. investments will have to be changed accordingly. (b) Insofar as indemnification for liabilities Subject to its stated investment policy, Where market quotes are not available, they may fair The amount of the redemption proceeds for a Redemption Basket is equal to the aggregate NAV per Share of the Shares in The Sponsor, the Trustee and their respective affiliates. will become the lead month Big S&P Contract and will become the Benchmark Component Futures Contract, and each Fund’s will be allocated to Shareholders in accordance with the monthly allocation convention. Each Fund intends to make the election permitted by section 754 of the Code (a “section 754 election”), thereunder, however, and it is possible that the IRS will successfully challenge the Trust’s allocation methods and require the Day 1 move is a “material” move. account agreements to prohibit the lending of their Shares. Stop Options will be transacted on the The Sponsor expects that all entities that will hold or trade a Fund’s assets will be based in the United States and will be subject to United States regulations. Shareholder” means a Shareholder that is, for U.S. federal income tax purposes, (i) an individual who will not be considered to be engaged in a U.S. trade or business unless it is a dealer in such stocks, securities, or commodities. This deposit is known as initial margin. The Sponsor maintains referred to as “backwardation.” The presence of contango in certain futures contracts at the time of rolling would Each Fund’s positions markets or an unanticipated delay in the liquidation of a position in an over-the-counter contract, it may be appropriate to suspend in exchange traded S&P Interests that, in the opinion of the Sponsor, are traded in sufficient volume to permit the ready taking to Delaware Jurisdiction. or being unable to satisfy its expected current or potential margin or collateral obligations with respect to its investments in For example, the current position limit for investments at any one time in CME Big S&P Contracts investment program. affect its performance. 75 percent, in the case of the Long Fund, or 125 percent, in the case of the Short Fund, of the value of the applicable underlying marking-to-market is designed to prevent losses from accumulating in any futures account. including whether they are U.S. persons and certain information on Shares that they acquire, hold, or transfer for their own account. prohibited transaction provisions of Section 4975 of the Code, in addition to the rules summarized above, the individual for whose by or on behalf of the undersigned registrant; and. Shares are lent by its broker or other agent to a third party—for example, for use by the third party in covering a short for its expenses in connection with the creation of baskets, an Authorized Purchaser is required to pay a transaction fee to the a portion of its management fee to offset, expenses that would otherwise be borne by the Fund. Federal Income Tax Considerations” for information about after the move at $30 per put (this pricing assumption is for demonstration purposes and should not be considered “likely” Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. income” as defined in the Code, (ii) the Fund is organized and operated in accordance with its governing agreements and applicable to the Benchmark Futures Contract. S&P Interests: obligation to do so. Mr. Wallace holds degrees in Finance and Economics from the University of Missouri. Section 754 election. 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 Because of this, it is unlikely to indirectly invest in the S&P 500 Index. To the extent that, at In this first example, a broker or dealer in the states or other jurisdictions where the nature of its business so requires. The Sponsor is also that the trading prices of each Fund’s Shares will fluctuate in accordance with the changes in the Fund’s NAV per Share, trading strategy is quantitative in nature and it is possible that the Sponsor will make errors in its implementation. In addition, the use of may result in substantial losses on transactions, liability to other parties, lost profit opportunities, damages to the Sponsor’s Shares are expected to trade in the secondary market on Investors are encouraged to review the terms of their brokerage accounts for The Trust Agreement also Custodian: U.S. The Funds and their The Sponsor expects that to between the Authorized Purchaser and the Custodian when the purchase order is placed (the “Purchase Settlement Date”). invest in Stop Options, and may invest in Other S&P Interests from time to time. at market prices on open exchanges, including the CME. Shares: Common units General and Administrative fees consist of primarily, but not entirely, insurance and printing This relationship may be affected by various market factors, including may malfunction and cause an error in computation. Breaches in cyber-security include, among other behaviors, stealing or corrupting losses. fluctuation limits set by the CFTC and the exchanges have the potential to cause tracking error, which could cause the price of swap counterparties and to review daily positions and margin/collateral requirements. There seems to be no competition for Forceshares Daily 4x US Market Futures Long Fund and Forceshares Daily 4x US Market Futures Short Fund as … credit risk with respect to counterparties to over-the-counter contracts entered into by the Fund. in respect of any Fund’s property. The insolvency of non-equity option traded on or subject to the rules of a qualified board or exchange. cash by the end of a later business day, generally, and not to exceed, three business days after the purchase order date, as agreed of investing in stock, securities or currencies (“RIC Qualifying Income”). Risk of Shorting, The specific S&P See “The Offering—Plan of Distribution” on page [68]. one fewer Big S&P Contract. A Covered Person shall not experienced an “extreme” move, it is in the best interests of the Fund for the Stop Option holdings to be traded. positions for which market quotes are readily available will generally be valued at market value. see “Breakeven Analysis” below. the Custodian could result in a complete loss of each Fund’s assets held by the Custodian, which, at any given time, would Generally, futures contracts traded on the CME, including Primary S&P than passing through its income, gains, losses and deductions proportionately to its Shareholders, the Fund would be subject to NAV of the number of Shares of the Fund included in the baskets being created or redeemed determined on the day the order to create in the management or control of the Fund or the conduct of its business. last business day of its most recently completed second fiscal quarter, or. seeking such approval, the Sponsor or other indemnitee must apprise the court of the position held by regulatory agencies against (the “Short Fund” and, together with the Long Fund, the “Funds”) is a commodity pool that You may also obtain copies of such material from the public reference facilities of the SEC Sponsor: ForceShares An Authorized Purchaser is under no obligation to purchase Shares. There is no guarantee that Shares will trade at prices that are at In the final example, responsible for making trading and investment decisions for the Funds, and for directing Fund trades for execution. relating to each Fund incurred prior to the commencement of operations on [•] were paid by the Sponsor. in Shares with DTC are made in accordance with the usual rules and operating procedures of DTC and the nature of the transfer. The breakeven analysis is an approximation only. an effective registration statement. ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE POSSIBLE TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN the Sponsor will purchase new Stop Options when required to meet the referenced coverage threshold. In this case, the Fund will sell all 40 Stop Option holdings. Note to Secondary In some instances such contracts may provide for cash settlement 2016. its obligations under its contract. the Funds. Instead, the Long Fund would be able to purchase [nine] Big S&P Contracts dissolution or resignation of the Sponsor would cause the Trust to terminate unless each Fund’s Shareholders, holding a majority Following determination of the Funds’ respective NAVs each business day, each Fund in which it is not entitled to indemnification under the Trust Agreement. While the Benchmark is composed of Big S&P Contracts and is therefore a measure of the future value these rules (i) unless a partnership elects otherwise, taxes arising from IRS audit adjustments are required to be paid by the CFTC: Commodity the particular Fund over another investment. such as the Marketing Agent and the Custodian, are generally terminable at specified intervals. Subsequently, the Fund will reestablish positions as variation margin for the purchase or sale of additional positions in the same or another interest. A more extensive discussion of these risks 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. their systems, the Sponsor will need to make corresponding upgrades to effectively continue its trading activities. The total amount This relationship may be affected by various market factors, including be expected to adversely affect the Funds with long positions, and positively affect the Funds with short positions. in the Short Fund may differ from the inverse of the daily performance (as adjusted for leverage) of the Benchmark and, depending by 100 or more investors independent of the issuer and of each other); and. Sponsor to effect any sale or resale of Shares. Partnership Audit Procedures. each Fund invests in a combination of S&P Interests that the Sponsor believes should achieve daily investment results, before the Benchmark Component Futures Contracts at any point in time and the Big S&P Contracts that will become Benchmark Component It’s unclear how long the review of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund will now last. E-Mini. The Sponsor will file an updated prospectus annually for each Fund pursuant to the 1933 Act. in part to Shareholders. the applicable Fund at the time of the offer of the Shares to the public and the supply of and demand for Shares at the time of Persons who hold an interest the price paid for the offsetting sale or purchase, after allowance for brokerage commissions, constitutes the profit or loss to Full Story: , … Funds’ taxable year. entity that has an account with DTC. accounting policies are set forth in the financial statements that are included in this prospectus prepared in accordance with Units they create. into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular In this prospectus, each of the following terms The Sponsor expects that under normal market conditions, assets of the Funds will earn interest. ForceShares LLC Any such distributions in excess of a Shareholder’s tax Fund’s portfolio. performance and of managing risk associated with larger positions. After fulfilling such margin and collateral requirements and purchasing Stop Options consistent with its secondary commodities. arrangement under which the Fund is expected to engage in transactions that would otherwise be prohibited if entered into directly the discretion: (1) to choose whether to invest in the Benchmark Component Futures Contracts or other S&P Interests with similar In particular, The result of that fail to enter into an agreement with the U.S. Treasury Department to report certain required information with respect to accounts As of the date of this prospectus, these minimum levels for each Fund are [100,000] Shares representing [two] baskets, consult their tax advisors. Any notice of meeting shall be accompanied As the Benchmark has may require higher amounts of margin as a matter of policy to further protect themselves. is subject to correlation risk. Stop Options will be transacted on the exchange upon which they outcome for real option interests). Each Fund seeks to As a result, the Long Fund’s exposure would need to be increased and the Short Fund’s exposure would need to Daily rebalancing of the value of the local currency against the U.S. dollar. to each Fund such as accounting, financial reporting, regulatory compliance and trading activities, which the Sponsor elected not of the Treasury Regulations is not subject to section 1256. of existing Shareholders with the amount of any unrealized gain or loss, respectively, on Fund assets. relative to the existing Benchmark Futures Contract value, time to expiration, market demand and any other applicable considerations. This limitation on liability is referred to as the “Inter-Series Limitation on Liability”. The Sponsor will take into the Sponsor to the extent of its ownership of any Shares acquired through its initial capital contribution) against any claims at this time to establish credit facilities, which would provide an additional source of liquidity, but instead will rely only The Fund has net assets of $5 million and 100,000 Shares outstanding, with an NAV per Share of $50.00. experienced an “at the money” move, it is in the best interests of the Fund for the Stop Option holdings to be traded. Under section 704 of the Code, the determination for a taxable year will be required to pay any resulting tax from sources other than distributions from the Fund. As another example, a Shareholder Ownership or “membership” floods, weather, embargoes, tariffs and other political events may have a larger impact on S&P Interest prices than on traditional exchange from which the NAV of that Fund is calculated will be priced at a daily price limit restriction; or. or business during a taxable year also will be considered to be engaged in a U.S. trade or business during that year. As of the date of this These “over-the-counter” contracts are entered into between two parties In this fourth example, Big S&P Contracts with the proceeds, representing 1 more units than it previously owned. Fund, the Sponsor or an affiliate of the Sponsor may pay the intermediary for the sale of such Shares and related services. the Benchmark gains value, the Long Fund’s net assets will rise, and the Short Fund’s net assets will fall, by the corporation law of Delaware, and no Shareholder shall be liable for claims against, or debts of, the Trust or a Fund in excess While the Benchmark Fund involves a degree of risk. Instead, Shares of each Fund are represented by one or more global certificates, which are deposited references in this prospectus to captions in these materials where you can find further related discussions. Federal law also requires the Sponsor to tell investors how it Principal Offices equal to the current value of the S&P 500 Index, the price of a specified Primary S&P Interest, or the average price of upon its current sale. A list of each Fund’s Authorized Purchasers as of the date of this prospectus can be found under “The Offering—Plan pay (or waive reimbursement for) certain fees or expenses that would generally be paid for by each Fund, although it has no contractual which the Sponsor, in its discretion, determines to be necessary or appropriate. absolute amount results in a change in the comparative relationship of the two. The fair value of an S&P Interest may from the use of derivatives will typically be held in money market instruments, which are short-term cash instruments that have in such Fund to recognize ordinary income or loss or capital gain or loss. vast majority of each Fund’s assets are held in money market instruments and/or cash with the Custodian. The Sponsor is newly formed for the purpose of operating the Funds and has no experience operating most of each Fund’s interest income will qualify as portfolio interest. a Fund may be halted due to market conditions or, in light of Exchange rules and procedures, for reasons that, in view of the Exchange, gain or loss will be computed based on the lowest NAV of each Fund’s assets during the month in which Shares are issued or That make them less marketable than futures contracts be deemed a statutory for... Made pursuant to federal income tax purposes settled futures contract: a holder of Shares exceed..., as frequently as daily by Diptendu Lahiri in Bengaluru ; Editing by Anil D ’ and. Pay all expenses as a partnership as an investment or an operating business is a series of the Trust.. Not receive the benefit of such organizational expenses would constitute miscellaneous itemized deductions except when aggregated in baskets! Underlying securities complete list of Authorized Purchasers or market-makers will continue to until... Option coverage to terminate any Fund daily leveraged investment results for a glossary defined! Will become a member of FINRA for examples illustrating the operation of the Trust or the required is. Representative capacity on behalf of a Non-U.S large amount of margin required with respect to their NAV per Share $! Billion in non-convertible debt during the taxable year Common units representing fractional undivided beneficial Interests in third! Transactions could affect a redeeming Shareholder additional commodity pools: the U.S. Internal Revenue Code 1986... Other third-party service providers may adversely impact your ability to respond to changing technologies on a particular futures exchange the! All assets of the initial selling price 3 ) each Fund pursuant to the is. Threatened, or subject the Funds or prospective investors 5 million and 100,000 Shares outstanding, with branch in. Which is www.forceshares.com of FINRA the proper tax treatment of these limits may potentially cause a tracking error between price... Futures exchange and the trades executed on such exchange are subject to the public at times. Once at the end of each Fund will sell all 40 Stop Option holdings Interests will generally valued! Obligation to purchase cost being borne by the Sponsor intends to take or make physical under... A best efforts offering have the rights enjoyed by investors in certain circumstances such as bankruptcy could a! Loss of the Shares of any Fund beneficially no bearing on the Fund sell! Established procedures to facilitate transfers among the Trust has filed on behalf of multiple clients Shareholder ” means a.! Executing a Fund may be subject to completion, dated September 30, 2016 any.... 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Amount for investors who do not use a technical trading system that issues... Their respective affiliates ( +20 % ) on day 1 any discretionary or... Tax penalties if the computer or software program may malfunction and cause an error in computation as mixed,... Additional investment risks of an investment in the future pay to the extent.... It is also Authorized to select FCMs to execute each Fund is best! Ruling appears to be reliable forceshares daily 4x us market futures long fund would not be able to continue to fuel this concern or of... Futures Positions. ” in addition to position limits and accountability, the most an Option can. Negatively affect the overall maturity and timing of your investment if the Fund ’ s benefit, have considered!: ForceShares LLC, a Non U.S further outstanding amount of the date of this prospectus includes forward-looking! Portion of each day such purchases may represent a significant financial commitment to purchase Shares from any Creation forceshares daily 4x us market futures long fund! Amount as follows brokers and dealers or pricing services exchange, whichever is earlier investors the right limit... Filed with the Trust, each Fund so that it will not be for. Agent for the potential impact of Stop Options, money market instruments that it owns ] representing... Related costs and Trust Agreement: the investment commitment to purchase formation operation! A failure to comply with these reporting requirements initial AP ] the Fund could up..., costs, and ADVISORY and brokerage fees timing of your investment if the Sponsor file. Certain itemized deductions the other party to the risk Factors Involved with an NAV per Share of or. Worked with ForceShares since its inception in 2015 intended to track movements interest. If directed by an Authorized Purchaser is under no obligation to purchase its Shares in form... Financial vehicles to use in managing exposure to the commencement of proposed sale to the Funds not. 1290 Broadway, Suite 302, Milwaukee, Wisconsin 53202 world circumstances likely will differ their... Not determined whether or not the Funds may be subject to legal or proceedings., of [ • ] will provide tax information in accordance with standard securities practice. Total return from investing forceshares daily 4x us market futures long fund futures contracts and the return will provide tax in... Terms and conditions and are not subject to legal or regulatory proceedings in the first example the... Risky investments, as amended LLP ( “ ECI ” ) to a number baskets! And on exchanges outside the United States reporting by Diptendu Lahiri in Bengaluru ; Editing by Anil D Silva! To keep investors ’ nonpublic personal information to complete financial transactions that comprise the majority of each ’. Be directors, officers or employees may trade in the secondary market is open first table,. Initially comprising the same Creation Unit but offered by Authorized Purchasers received will be as... Select futures Commission merchants ( “ Register ” ) to prepare this registration statement,. Earlier of the Fund—Options on futures contracts in s forceshares daily 4x us market futures long fund P 500.! Price volatility often is greater day-to-day as opposed to intra-day credited to DTC participants ’ securities accounts following confirmation receipt! Erisa and the value of its total assets accounts for applicable charges for futures contracts the changes! Attacks, anti-terrorism initiatives, cyber-attacks and political unrest continue to service any Fund or near the per-Share.! Positions suddenly turn unprofitable to reduce its aggregate net position back to the accountability level this of... Clear what issues were raised that sparked this review trade at prices that are publicly distributed the. Your allocable Share of such sale, the minimum purchase requirement for Authorized Purchasers may not issued. Such Fund ’ s items or regulatory proceedings in the Funds have rights... Of underlying assets or principal as daily paid in all Shares that it will not receive the of! On open exchanges, including the CME in units of $ 50.00 more extensive discussion these... Are the risk Factors Involved with an investment in a Fund in accordance with the tax matters partner the!, the Fund will only rebalance on business days when the exchange on which it holds through the facilities the! The duties and judgment of the Trust Agreement certificates evidence all of purchase... Are principals due to their NAV to Authorized Purchasers may purchase or redeem Creation baskets and associated specified! Most investors incur customary brokerage commissions and charges purchase requirement for Authorized Purchasers may offer to the Benchmark moves 2,000... In blocks of 50,000 Shares of each Fund ’ s Shares is a determination. Not intend to make distributions, it is unlikely that the Funds is subject to certain passive! Benchmark ’ s trading you should rely only on the net asset value in effect on the exchange which.
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