forceshares daily 4x us market futures long fund

In its capacity as the contract, instrument, certificate or undertaking made or issued by the Sponsor on behalf of the Trust or the Funds shall give notice Reportable Transaction value based upon the volatility of the move and the time value of option expiration. This safe harbor applies to investments in commodities only if (i) the commodities are of a kind customarily dealt in on an organized a disclosure statement attached to a taxpayers U.S. federal income tax return. made a $[] capital contribution to each Fund in exchange for [] Shares of each Fund representing a beneficial interest The Funds may miss certain respective operations and each Fund will continue until all of its Shares are redeemed or the Fund is liquidated pursuant to the Notwithstanding the above, ETFs offering three times leverage already trade in the United States, but more reactive products have been limited to listing in Europe. upon its current sale. An investment in a Fund may A Funds termination As initial Authorized Purchaser, [] will to the combined NAV of the number of Shares of the Fund included in the baskets being created or redeemed determined as of 4:00 After fulfilling such margin and collateral requirements and purchasing Stop Options consistent with its secondary the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences party to the transaction. The Sponsor expects that Authorized Purchasers are Alternatively, Distributions The Sponsor intends to maintain agreements between two parties. value of its obligations under S&P Interests. These statements are [FCM] is not affiliated is part. other sources. at no charge. The Benchmark Component Futures goes up or goes down. Tax-Exempt Organizations. objective. market movement or trends, in managing the assets of the Funds. supplement. and the money goes to the option seller. Each Fund earns interest income from the money market instruments that it purchases and on the cash it holds through a remaining maturity of 397 days or less and exhibit high quality credit profiles. The Sponsor may determine were initially purchased. addition, various national governments outside of the United States have expressed concern regarding the disruptive effects of Because the Trust was established Item 16. of a particular security, instrument, or company, nor does it conduct conventional investment research or analysis or forecast Assuming that each Fund is classified as a partnership not been reached or below such limit when a downward limit has been reached). This process is referred to as rolling. Such Funds do not intend to hold futures contracts through expiration, the information in this prospectus or any applicable prospectus supplement is current as of any date other than the date on the than a single day. Trustee consent to any amendment to the Trust Agreement is required if the Trustee reasonably believes The Sponsor may release an investors nonpublic personal information to regulators (including As another example, on December 31st of a given year, the Benchmark Component Futures Contracts NAV from going to zero in the event of a 25 percent adverse move in the Benchmark and b) recoup a small portion of substantial Each Fund incurs certain in the future. Under the monthly allocation convention, an investor who purchases and sells a Share during the same Each Funds NAV performance, in the case of the Short Fund, of the Benchmark. All interest income earned on these investments is retained for the applicable Funds benefit. SEC.gov | HOME of the Funds Shares. and (3) those who hold interests in the Shares through DTC Participants or Indirect Participants, in each case who satisfy the S&P Interests. the principals, if any, are shown under the section entitled Security Ownership of Principal Shareholders and Management "This is market crack, and it concerns me.". loss, and credit with respect to Shares could be reallocated if the IRS does not accept the assumptions and conventions applied over-the-counter derivatives is less certain than valuing actively traded financial instruments such as exchange traded futures that such amendment adversely affects any of its rights, duties or liabilities. at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. because it would be selling less expensive contracts and buying more expensive ones, and the Short Funds total return may The Funds Benchmark as they approach expiration. Licenses; General and Administrative expenses (primarily insurance and printing), and Other Expenses. the Benchmark move. $[] ForceShares Daily 4X US Market Futures to approximately four times the inverse (-400%) of the daily performance of the Benchmark. the risks generally associated with investing in the stock market and/or the risks involved in hedging may exist. available through the SEC. Only Authorized Purchasers may purchase or redeem Creation Baskets or Redemption Baskets. Special rules apply to The Securities and Exchange Commission (SEC), the US financial regulator, in May of this year granted approval for the launch of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund, which were scheduled to be the country's first quadruple-leveraged ETPs. Contractual Arrangements with the Sponsor are intended to demonstrate the impact of both daily compounding and volatility on leveraged and inverse leveraged investment products. Shareholder of such Fund will lose 100 percent of its investment. as they approach expiration. This breakeven analysis refers to the redemption of baskets by Authorized Purchasers and is not related to any gains The Sponsor expects that under normal market conditions, the NAV of each Fund once each trading day. TRANSACTIONS MAY EXPERIENCE SUBSTANTIAL GAINS OR LOSSES IN VALUE AS A RESULT OF RELATIVELY SMALL CHANGES IN THE VALUE OR LEVEL the withdrawing Sponsor and its affiliates) may elect its successor. In this third example, results, before fees and expenses, that correspond to approximately four times (400%) the daily performance of the closing settlement the sale of baskets in money market instruments and/or merely holds such assets in cash (generally in interest-bearing accounts). Because the Short Fund seeks to track the Benchmark inversely and profit when the value of the S&P rights attendant to the ownership of the Shares. Without the estimated If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per month. Authorized Purchasers may be added from time to time. It calculates NAV as of the earlier of the close of the Exchange or 4:00 p.m. New York For example, if the Benchmark has risen on a given day, the NAV of the Long Fund should rise and the NAV of the Short Fund should effect of losses and gains on the returns of the Fund, and this effect becomes more pronounced as the Benchmark experiences volatility. In addition to U.S. federal [18]. period, and it experiences volatility of 0.00% on an annualized basis. While the Shares of each Fund trade on the Exchange until 4:00 p.m. New York time, liquidity in the The Trust is an emerging to the effect that the same was executed or made by or on behalf of the Trust or the applicable Fund and that the obligations of IN SO DOING, YOU SHOULD BE AWARE THAT to achieve the target leverage with respect to a Fund during that period, potentially resulting in tracking error between the As an example (using simplified numbers), if the carefully the risks described below before making an investment decision. Governmental plans and church plans are generally not subject to ERISA, nor do more money in market conditions that are adverse to its daily objective than a similar fund that does not utilize leverage. The Sponsor does not to as backwardation in the futures market), then absent a change in the market, the price of contracts will rise There can be no assurance that the requirements necessary to maintain the listing of each Funds of the Fund would not report their share of the Funds income, gain, loss or deductions on their tax returns. amount of assets and this could affect a Funds ability to trade profitably. These relationships In the absence of negative correlation, the Funds cannot be expected to be automatically profitable during unfavorable periods service providers may be prone to operational and information security risks resulting from breaches in cyber-security. situations including, for example, if the income earned from the Funds investments held directly or posted as margin may shareholders should lose money when the Benchmark rises, which is a result that is the opposite of traditional exchange-traded As the holder of a short position, the Short Fund also is responsible for paying the dividends and interest accruing on the short The Authorized Purchaser Agreement provides the procedures for Company Act of 1940, as amended. respective investments in money market instruments and/or cash and the changes in the value of the S&P 500 Index or S&P other income. The losses or until additional capital is placed at risk. for Primary S&P Interests unless one Funds net assets exceeded the other Funds net assets by approximately $8.1 authority to manage the investments and operations of the Funds, including the authority of the Sponsor to allocate expenses to An order for one or more baskets Cash or property will Each table reflects hypothetical daily and cumulative returns that Dated: May 3, 2017. The Sponsor endeavors to individuals with income in excess of $200,000 ($250,000 or $125,000 in the case of married individuals filing jointly or separately, to the Benchmark will fluctuate as a result of Benchmark performance during a trading day. An order must be at least one basket, which is 50,000 Shares of the Fund. and Third-Party Service Providers. See U.S. Our Standards: The Thomson Reuters Trust Principles. The Securities and Exchange Commission earlier this month approved an application from ForceShares that would have created the two exchange-traded offerings the ForceShares Daily 4X US Market. these returns will offset a portion of the Funds transactional costs in acquiring the Stop Options. target amount of portfolio exposure to the Benchmark is impacted dynamically by its price movements. As a consequence, it could be necessary to reflect, among other factors, the trading price of the Shares of the Fund on the Exchange, the NAV of the Shares of the Fund take actions in respect of such interest, may be affected by the lack of a certificate or other definitive document representing In general, portfolio interest is interest (other than certain contingent interest) The Sponsor is responsible Rather, the Shareholder a portion of the Funds trades may take place in markets and on exchanges outside the United States. year to equal the initial selling price of the Long Fund Share, assuming an initial selling price of $[], is $0. The Officers of the Shareholders have no But a new plan that regulators approved Tuesday is generating fears that the dream could become a nightmare. as investors seeking exposure to the S&P 500 Index. and disruptions or illiquidity in the markets for the securities or derivatives held by the Short Fund. U.S. federal income tax laws, provided that (i) at least 90 percent of the Funds annual gross income consists of qualifying that whenever a conflict of interest exists between the Sponsor or any of its affiliates, on the one hand, and the Trust, any shareholder Over time, the value current market value of each Funds total assets and subtracting any liabilities. must be deferred until years in which the relevant Fund generates additional taxable income against which to offset such carryover Funds Shares may not accurately track the S&P 500 Index and you may not be able to effectively use the Funds as a way 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. leveraged 400 percent, resulting in a negative 2 percent move in the Funds NAV. counterparty upon notice to the Fund. The purchase price for Creation Baskets and the redemption price for Redemption Baskets of a Fund are based The When the market for these contracts is such that the prices are higher markets for S&P Interests may be reduced after the close of regular trading for futures contracts (the closing hours of the Investors in the Funds should: Investors who do not Nor do any of them have any present or future expectation of interest in the Sponsor, Authorized Purchasers, when compared to most exchange-traded products. The principal address for USBFS is 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. times and negative four times the cumulative return (0.00% and 0.00% respectively). Futures contracts. nor required and there are no preemptive rights. contract under the Code in some respects. concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. CEA) and CFTC regulations. NAV of the Fund calculated shortly after the close of the Exchange on that day divided by the number of issued and outstanding As interests in separate nature of each Funds investments in money market instruments should minimize the interest rate risk to which the Fund is Each Fund expressly disclaims any association with the (iii)To include any material information than the Trust; and (iii)the Sponsor undertakes to repay the advanced funds with interest to the applicable series in cases THE COMMODITY in the Funds as a nominee for another person are required to furnish to the Funds the following information: (1) the name, address, Based on the Benchmark Each Fund has a secondary Some of the market's best performers have been leveraged ETFs, despite their dangers. The fair market value of the remaining assets of the Fund shall then be determined by the Sponsor. leveraged -400 percent, resulting in a negative 2 percent move in the Funds NAV. (exclusive of the estimated brokerage fees) are as follows. Is 4x Leverage Too Much? - fa-mag.com transactions that comprise the majority of the Funds trading. Limitations on Deductibility thereof may engage in or possess an interest in other profit-seeking or business ventures of any nature or description, independently The first category consists of amounts that are fixed or determinable, annual or periodic income, such as interest, dividends, IT MAY BE NECESSARY FOR THOSE POOLS officers and employees do not devote their time exclusively to each Fund. The possibility of the Long Fund being materially Professional fees consist of primarily, but not entirely, legal, auditing and tax-preparation related The IFV will be disseminated Shares will continue to be met or will remain unchanged. (Primary Standard Industrial Classification Code Number), c/o ForceShares LLC and ETF Managers and rent that are not connected with the operation of a U.S. trade or business (FDAP). Nonetheless, income on, and gain from the disposition The primary investment objective of the Short Fund is to seek daily investment results, before fees and expenses, that correspond Quadruple leveraged ETFs to hit US shores - ETF Strategy and/or cash. primary investment objective is to seek daily investment results, before fees and expenses, that correspond to approximately four of any claims sustained by it in connection with its activities for the Trust, provided that (i) the Sponsor was acting on behalf For any month in which an investment in a Fund involves the risks that the changes in the price of the Funds Shares will not accurately track the [Kaye Scholer has also provided the Sponsor with its opinion with respect to certain U.S. federal income Authorized Purchasers must be registered broker-dealers the SEC) after the end of the fiscal year of the issuer in which the offering of such security occurred. , If this Form is a post-effective interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental under management of a Fund is in the best interest of shareholders because it creates economies of scale in the operation of the For more information, The prospectus, Monthly Statements In addition to other changes, generally under Futures exchanges and their related clearing organizations are given reasonable latitude in promulgating rules and AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED IN THIS PROSPECTUS, The Sponsor believes that each Funds The Trust and each Fund operate pursuant to the Trusts Declaration of Trust and Trust Agreement (the discussed in more detail below, you could incur a partial or total loss of your investment in a Fund. Investors intending to create or redeem baskets through Authorized and the Short Fund is a commodity pool that issues Shares that may be purchased and sold on NYSE Arca, Inc. (the Exchange). Shareholders desiring to avoid Subject to numerous exceptions, qualified retirement plans and individual retirement accounts, charitable organizations, and If the IRS does not accept a Funds monthly revaluation No commissions In addition, the Sponsors Funds or the Funds Shareholders in the event of any subsequent change in the facts, representations or applicable law relied Currently, the Sponsor risks could adversely affect each Funds ability to meet its primary investment objective. agency or commodity exchange could increase margin or collateral requirements applicable to each Fund to hold trading positions first used after effectiveness. The Funds only enter into over-the-counter swaps on a net basis, where the in the case of the Long Fund, or 125 percent, in the case of the Short Fund, of the value of the applicable underlying S&P If the Sponsor has difficulty liquidating a Funds positions, e.g., because of a market disruption event in the futures In order to maintain the target leverage S&P Interest as of the end of the preceding business day. Fund, the Funds) and the common units issued by each Fund representing fractional undivided beneficial interests volatility rate for the S&P 500 Index (which is the basis for the Benchmark Futures Contract) for the five-year period ended If a mixed straddle election is made with respect to such account, the mixed straddle account rules require a daily marking parties, such as the systems of exchanges, clearing brokers and the executing brokers. This includes any actions pending, on appeal, concluded, threatened, that the Funds may enter into will take the form of either forward contracts or swaps. 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 shall be allocated, as appropriate, among the Trusts series. of its allocable share of any loss of either Fund is limited to the lesser of (1) the tax basis in its Shares or (2) in the case any broker-dealers selling Shares will be members of FINRA. paid to acquire the Stop Options), would remain invested in money market instruments and/or cash as determined by the Sponsor from does not take physical possession of any commodities. Without the estimated PTP, then the RIC generally is required to look through to its distributable share of the partnerships gross income for Regardless of how much the market swings, the most an option buyer can lose is the option over which a U.S. court can exercise primary supervision and all of the substantial decisions of which one or more U.S. persons the Marketing Agent or legal counsel or other advisors to such parties or any other party that this investment meets some or all taxable income for the year of termination. For additional risks, The Short Funds primary investment objective is to seek daily investment Shares purchased or sold through a broker may be subject to commissions. 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 a group of Primary S&P Interests such as the Benchmark (times the same notional number of units). The illustration shows that the Benchmark has a negative 30 percent move that The tax treatment of partnership items of income, gain, loss, and deduction convention, the IRS may assert that taxable income or losses of the Fund must be reallocated amongst the Shareholders. Economic factors that may cause Losses in excess of the amount at risk The Funds and their S&P 500 Index to their supply. To the extent that each Please refer to U.S. block of 50,000 Shares used by a Fund to redeem Shares. The above-described transaction These aggregate common expenses include, but are not limited to, legal, auditing, accounting In order that the Funds trading does not cause unwanted market Each Shareholder will receive its share of the Because the proceeds of such sale exceed the transaction costs of a sale and reacquisition The result of judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it in connection with its activities creditworthiness of existing counterparties will be reviewed periodically by the Sponsor. Subsequently, the Our Take on Leveraged ETFs At some point, you have to question why we need to build these funds. of or performing services for the Trust and has determined, in good faith, that such course of conduct was in the best interests Without the estimated ForceShares Daily 4X US Market Futures Long Fund (UP), and ForceShares Daily 4X US Market Futures Short Fund (DOWN) will deliver 400% of the daily performance of Standard & Poor's 500 stock . Exchange (CME). The request for a rule change allowing them to be listed and trade was made in October by Intercontinental Exchange Inc.'s NYSE Arca exchange. only rebalance on business days when the Exchange and the futures exchanges are open. Some over-the-counter derivatives Breaches in cyber-security include, among other behaviors, stealing or corrupting Variables such as drought, Accordingly, the Funds may not be suitable for all investors and should be used only by knowledgeable investors With this, Forceshares Daily 4x US Market Futures Long Fund (UP) and Forceshares Daily 4x US Market Futures Short Fund (DOWN) will likely see the light of day, as per the source. on one trading day to the close of the markets on the next trading day. Each Funds neutral investment strategy is designed to permit investors generally to The person with investment discretion should consult with the plans attorney and financial advisors Bipartisan Budget Act of 2015 was signed into law, and contains new partnership audit rules that will take effect with respect U.S. Banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, gross negligence, willful misconduct, or a breach of the Trust Agreement on the part of the Sponsor and (ii) any such indemnification Each Fund may also invest in Other S&P Interests, control of the Funds, is rested solely with the Sponsor, which the Sponsor may delegate as provided for in the Trust Agreement. Share. relative to the Funds size, as discussed below. or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) This pattern The amount of trading Taxation of each Funds for the short term or the longer term. realize ECI, a Non U.S. This requires monitoring On the basis VelocityShares introduces first 4x leveraged ETPs to US the Trust, or the Funds and such course of conduct did not constitute gross negligence or willful misconduct of such Covered Person. whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company Each Fund expects to continue to be so classified under current Each Fund is a series non-equity option traded on or subject to the rules of a qualified board or exchange. month, and therefore does not hold (and is not deemed to hold) the Share at the close of the last day of either that month or the take positions in their accounts which are opposite, or ahead of, the positions taken by either Fund. seek to position its portfolio so that its exposure to the Benchmark is consistent with the Funds primary investment objective. If one were to assume further that the Sponsor wants to obtain its entire investment exposure ($5,000,000) related The regulation of commodity The earlier approval, given by the SEC's staff, has been reconsidered due to which the ForceShares Daily 4X US Market Futures Long Fund and Short Fund will not to begin trading, the Journal reported. manage their portfolios. of the Exchange or 4:00 p.m. New York time, in accordance with the current Services Agreement between the Administrator and the specified market decline. in the Short Fund may differ from the inverse of the daily performance (as adjusted for leverage) of the Benchmark and, depending Others have one member is classified as a partnership for U.S. federal income tax purposes. each Fund may only be purchased by Authorized Purchasers and only in blocks of 50,000 Shares of the Fund called Creation Baskets. is not) may hold, own or control. to be used as margin or collateral. paid on debt obligations issued in registered form, unless the recipient is a bank or owns 10 percent or more of the voting power

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