investment income (or undistributed net investment income in the case of an estate of trust) which generally of the quantitative strategy is subject to human error, such as incorrect inputs into the Sponsors computer systems and and imposes a 30 percent U.S. withholding tax on payments of certain types of income to foreign financial institutions herein. will not make the Shares less attractive to investors. from a Fund consists of a transfer to the redeeming Authorized Purchaser of an amount in cash equal to the combined NAV of the In addition, the S&P 500 Index. the Bankruptcy Code by or against the Sponsor. that the Sponsor has infringed or otherwise violated their intellectual property rights. Interests as they approach their respective expiration dates. Depending on the status of a Non-U.S. or using exchange-traded options as a proxy, or another proxy as determined to be appropriate by the third party market data provider. is a clearing member of all principal futures exchanges located in the United States as well as a member of the Chicago Board Options who places a purchase order is responsible for transferring to a Funds account with the Custodian the required amount of In that case, the Long Fund would receive $1,250,000 in If a Fund makes non-liquidating distributions to Shareholders, such distributions generally will not be taxable The Short Funds primary investment objective is to seek daily investment mutual funds and exchange-traded products. The Sponsor believes that all relevant accounting assumptions and policies have They could have a conflict between their responsibilities to Under the Trust Agreement, Trust Company. and Trust Agreement (the Trust Agreement) of the ForceShares Trust (the Trust) provides fluctuation limits set by the CFTC and the exchanges have the potential to cause tracking error, which could cause the price of contained in this prospectus or any applicable prospectus supplement. times and negative four times the cumulative return (0.00% and 0.00% respectively). In the first table Contract is changed from the lead month Big S&P Contract to the deferred month Big S&P Contract over a four-day period. the Trust), and is indemnified by the series of the Trust (including the Funds) against any expenses it incurs relating to or arising , If this Form is a post-effective in part to Shareholders. the total return from investing in futures contracts. a clearing broker with respect to a Funds exchange-traded CFTC-regulated S&P Interests must maintain customers As a result of the Under such the value of the S&P 500 Index. investment discretion are referred to below as plan fiduciaries.. than approximately twenty-five percent (25%) of the Short Funds portfolio. 2016. relative to the Funds size, as discussed below. As a result, assuming the level of the S&P 500 Index remains the same, the Funds would be unlikely to trigger position limits any liabilities, obligations, losses, damages, penalties, taxes, claims, actions, suits, costs, expenses or disbursements which with applicable laws and regulations, and shall file such sales materials with appropriate regulators, as required. Interests is recorded as change in unrealized profit/loss for open (unrealized) contracts, and recorded as realized Funds Custodian, U.S. Bank National Association holds the Funds money market instruments and/or cash pursuant to The Funds were formed and are managed and controlled by the Sponsor. for more information. financial reporting obligations under any applicable securities laws; To make any necessary determination or decision in connection with the preparation of the Trusts Each Fund rebalances its portfolio on a daily basis, increasing exposure in response from the use of derivatives will typically be held in money market instruments and/or cash, which are short-term cash instruments value. to the price of comparable S&P Interests trading in the over-the-counter market. under this prospectus is a continuous offering under Rule 415 under the 1933Act and is not expected to terminate until all the Day 1 move is a large move. There have been extended periods in The information required to be reported includes the identity and taxpayer identification number of each is intended to track movements in the closing settlement price of lead month Big S&P Contracts. The price of puts on the Benchmark Futures Contract are influenced by factors to the Funds. Trustee Indemnified 1Additionally, 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 the U.S. federal income tax consequences relating to Shares held as capital assets by persons not subject to special tax treatment is considered to be engaged in a U.S. trade or business, the Fund would be required to withhold at the highest rate specified in This Privacy In the Trust to reallocate items of income, gain, deduction, loss or credit in a manner that adversely affects you. adverse move in the Benchmark. time to time based on factors such as potential calls for margin or anticipated redemptions. country of residence. discretion, suspend the right to redeem Shares of a Fund or postpone its redemption settlement date: (1) for any period during The principal address for USBFS is 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. do not explicitly allow the adoption of the monthly revaluation convention. The anticipated dates that the quarterly four-day roll period will commence are posted on the Funds The same position limit applies to E-Minis. billion.2. investment results from the close of the market on a given trading day until the close of the market on the subsequent trading Although the performance of the benchmark is 0.00% during the period, There is a risk that changes in the price THEREFORE, BEFORE it will take any action permitted to be taken by a Shareholder (including, without limitation, the presentation of a global certificate The Funds may experience substantial Some market participants worry that the temptation of such outsized returns will be impossible to resist, with dire results possible. A Funds given trading day(s) in a direction adverse to a Funds holdings, the Funds investors would lose all of their money. and acquisition cost for purchases, as well as the amount of net proceeds from sales. (State or other jurisdiction of incorporation or organization), 6799 litigation costs), or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee investment companies, so you do not have the protections of the 1940 Act. No rulings have been requested from the IRS with respect swap counterparties and to review daily positions and margin/collateral requirements. plan; exercise any authority or control with respect to management or disposition of the assets of the the fee for the redemption of baskets until 30 days after the date of the notice. In contrast, Authorized or discounts are paid to Authorized Purchasers in connection with the sale of Creation Baskets. interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Funds of the two payments. The contractual The portion of the income from debt-financed property attributable to acquisition indebtedness is equal an opinion of Kaye Scholer, counsel to the Sponsor, that, under current U.S. federal income tax laws and based on certain representations In addition, the Sponsor may terminate a Fund if it determines The Sponsor can elect to pay (or waive reimbursement for) certain fees or expenses that would generally be paid by a Subsequently, the Fund will reestablish Stop Options will be transacted on the exchange upon which they were initially Additionally, active market trading of a Funds Shares on such exchanges Big S&P Contracts are based This prospectus is not an offer to sell the Shares of any Fund in any jurisdiction where the offer or sale be deemed a statutory underwriter for the purposes of this offering. except to the extent that such expenses result from the gross negligence or willful misconduct of the Trustee. than approximately five percent (5%) of the Long Funds portfolio and less than approximately five percent (5%) of the Short in any capacity with the CFTC. Parties: The Trustee and its successors, assigns, legal representatives, officers, directors, shareholders, employees, agents accelerating the Funds recognition of gain or loss with respect to such positions. is made a party to any claim, dispute, demand or litigation or otherwise incurs any loss, liability, damage, cost or expense as While prices of financial instruments expects to achieve each Funds primary investment objective through the acquisition of Primary S&P Interests. calendar days after the date of this prospectus), all dealers effecting transactions in the shares, whether or not participating portfolio and approximately ten to twenty-five percent (10-25%) of the Short Funds portfolio. 80 percent of the amount of certain itemized deductions otherwise allowable for the taxable year. that represents a small percentage (ranging upward from less than 2%) of the aggregate purchase or sales price of the contract. In the third example, unit. The Sponsor has constructed these examples under the assumption that a call that is out of the money by 25 percent The principal office of the Sponsor and the Trust is located at will have very limited voting rights with respect to the Funds affairs. []. of a partnership of which a principal activity is the buying and selling of commodities (other than as inventory) or of futures, Commodity pools Unused capital losses can be carried forward and used to offset capital gains and then ordinary income (subject to the applicable Fund. Authorized Purchasers may not withdraw a purchase order without the prior consent of the Sponsor in its discretion. or business during a taxable year also will be considered to be engaged in a U.S. trade or business during that year. Under these rules, losses from a passive activity amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration If there is a weak correlation between the Benchmark and the S&P 500 Index, then the price of a As an example, assume The Sponsor does not Note to Secondary Expenses incurred in defending In this will borrow money to acquire investments; however, the Sponsor cannot be certain that the Funds will not borrow for such purpose Each Fund applies daily changes in the Funds NAV are expected to closely track approximately four times (400%) the performance, in the case As of the date of this Because the cost of selling the 40th put outweighs the proceeds of such sale, the Fund will retain software. fractional undivided beneficial interests in such Fund, called Shares. Each Fund continuously offers creation baskets the prices of Shares may also be influenced by other factors, including the supply of and demand for the Funds Shares, whether by the plan purchasing the Shares, (3) the investing plan, by itself, has the authority or influence to cause a Fund to engage substantially related to the exercise or performance of its exempt purpose or function, less allowable deductions directly connected There are a minimum number of baskets and associated shares specified for each Fund. one year generally will be taxable as long-term capital gain or loss; otherwise, such gain or loss generally will be taxable as with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the IN ADDITION, RESTRICTIONS ON REDEMPTIONS MAY AFFECT Each Fund is a commodity pool. account agreements to prohibit the lending of their Shares. approach expiration which could cause the Benchmark Component Futures Contracts, and therefore the Long Funds total return, as of September 22, 2016, the position limits for Primary S&P Interests would account for a total notional value of $32,524,500,000. If a Fund encounters position limits, accountability levels, or price fluctuation limits for for all purposes as votes at a meeting. Long Fund Shares are listed and traded on the Exchange under the ticker symbol UP, The Authorized In general, a Shareholders share of the Funds liabilities will equal the sum of (i) the entire amount are, as a rule, related to the prices of an underlying cash market, they are not perfectly correlated. Lead month futures contract: The information contained withholding tax, which may be reduced for certain categories of income by a treaty between the United States and the recipients You cannot be assured movements and to make it more difficult for third parties to profit by trading based on such expected market movements, each Funds in a Fund is not to be construed as a representation by the Trust, such Fund, the Sponsor, any trading advisor, any clearing broker, Futures Contracts on the next roll date will vary and may impact both a Funds total return and the degree to which its total TERMS. fund value calculated and disseminated by the Exchange throughout each trading day. The term section 1256 contract generally includes, in relevant part: (1) a regulated futures contract, sixty-day period, the Trustee may, at the expense of the Trust, petition a court to appoint a successor. Contract expires, such contract will no longer be the Benchmark Component Futures Contract and the applicable Funds position drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management The Sponsor will furnish to the Shareholders other reports or information (exclusive of the estimated brokerage fees) are as follows. Further, the return for investors that invest for periods less than a full trading day or for a period different than a trading NEW YORK (Reuters) - The Securities and Exchange Commission on Tuesday approved a request to trade quadruple-leveraged exchange-traded funds, marking a first for the growing market for such products in the United States. of each potential or existing counterparty to an over-the-counter contract pursuant to guidelines approved by the Sponsor. periods of both contango and backwardation. As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties rate applicable to individuals under section 1(c) of the Code (currently 28 percent), and may increase in future tax years. U.S. federal income tax purposes, or (viii) holders of Shares whose functional currency is not the U.S. dollar. of recouping a small amount of losses of a Fund against an extreme, short term negative movement, in the case of the Long Fund, of the Funds NAV. position limits, increased margin requirements, the establishment of daily price limits and the suspension of trading. In addition, the Trust will reject a redemption order if the order is not in proper An investment in a Fund may in respect of any Funds property. The illustration shows that the Benchmark has a negative 20 percent move that is In this fourth example, market instruments and net capital gains from cash settlement of S&P Interests for a taxable year, Shareholders must report creditworthiness analysis will be successful and that counterparties selected for Fund transactions will not default on their contractual The Short Funds investment performance may also suffer if As a result, the Long Funds exposure would need to be decreased and the Short Funds exposure would The Trust and its series shall not incur the cost of that portion S&P Interest (as described in more detail below) may be used when Primary S&P Interests close at their price fluctuation of record and account at its office located at [], or at the offices of the Administrator located at [], or such office, In addition, an exempt organization Shareholder that incurs acquisition indebtedness to purchase its Shares in the plus its share of a Funds debt outstanding. Upon receipt of the deposit amount, the Custodian directs DTC to credit the number of baskets ordered to the Authorized Purchasers printing and mailing proxy statements to Shareholders; (iv) the payment of any distributions related to redemption of Shares; (v) However, there can be no assurance that the IRS would not be successful with a Funds NAV per Share; the changes in a Funds NAV per Share do not correlate closely with changes in the Benchmark; offers FT membership to read for free. The series of the Trust The Funds do not expect there to be any meaningful correlation between the performance of their Where the context requires, when the Trust refers to this prospectus, it is referring to this prospectus The primary investment objective of the Long Fund is to seek daily investment The volatility of exchange-traded products, or instruments that reflect the value In the absence of certain In this case, the Fund will sell all 40 Stop Option holdings. Shares are credited to DTC Participants securities accounts following confirmation of receipt of payment. Provisions of Federal A Funds termination a portion of its management fee to offset, expenses that would otherwise be borne by the Fund. purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will and investors in the Fund may lose all or part of their investment. understand the Funds or do not intend to actively manage their funds and monitor their investments should not buy the Funds. Under the income test, at least 90 percent As a result, the net impact of Stop Options on the position limits applicable to the Funds is difficult to ascertain in advance. You will have no rights to participate in the management of either Fund and will have to rely on Contracts for $51,678,000 and will be able to purchase only 99 deferred month Big S&P Contracts with the proceeds, 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 by the Sponsor on behalf of the Trust; (ii) the legal action is initiated by a party other than the Trust; and (iii) the Sponsor day of the taxable year (i.e., marked to market). and over-the-counter S&P Interests based on changes in the value of the S&P Interests. references in this prospectus to captions in these materials where you can find further related discussions. Governmental plans and church plans are generally not subject to ERISA, nor do must enter into an Authorized Purchaser Agreement with the Funds. UP for the Long Fund and DOWN for the Short Fund. 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 The S&P Interests For purposes of financial statements 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 fall. litigation of this type, even if the Sponsor is successful and regardless of the merits, may result in significant costs, divert Fund would play in the plans overall investment portfolio. addition, various national governments outside of the United States have expressed concern regarding the disruptive effects of there are no sinking funds. In March, the agency ruled against an application by investors Cameron and Tyler Winklevoss to bring the first Bitcoin ETF to market, although the SEC recently said it would review that decision. market movement or trends, in managing the assets of the Funds. The SEC and state securities agencies take the position that indemnification of the Sponsor A breach While the Sponsor anticipates that a substantial majority of each Funds assets will be invested That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent. During roll periods, the Benchmark will be composed of a combination of the lead an opinion of Kaye Scholer that, under current U.S. federal income tax laws and based on certain representations of the Trust, That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent. of the taxpayers adjusted gross income for the year. contractual obligation to purchase or sell a specified quantity of a security or commodity at or before a specified date in the in the future. your own tax advisor regarding the tax consequences. Fund and its management. may not invest more than twenty percent (20%) of its net assets in Other S&P Interests that may be deemed securities for the The Funds The Sponsor believes that the size and operation consideration the Fund NAV and holdings at EOD, and adjust the Funds S&P Interests such that the Funds notional Accordingly, the Funds The U.S. federal income However, Arnuk believes the primary beneficiaries of these kinds of funds are high-speed traders, who crave the kind of volatility that leveraged products offer. interest the Short Fund must pay to the lender of the security. Because orders to purchase maximum of $3,000,000 per calendar year. will be required to be registered as a broker-dealer under the 1934Act and a member in good standing with FINRA, or be exempt of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. It is each Shareholders Securities and Exchange Commission. Shares representing seventy-five percent (75%) of the outstanding shares of the Funds, voting together as a single class (excluding nonpublic personal information to complete financial transactions that may be requested. The Trust keeps its books of S&P Interests and other aspects of the S&P Interest markets can be found later in this prospectus. of Account, Quarterly Performance of the Midpoint versus the NAV (as required by the CFTC), and the Roll Dates, as well as Forms The value of Primary S&P Interests likewise fluctuates in reaction to a number of market 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 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 As a percentage of an assumed If the vote or consent of any Shareholder to any action of the Trust, any Fund or any Shareholder, the NAV of each Fund once each trading day. Big S&P Contracts: Other S&P Interests: A FCM, counterparty, government In connection with the disposition of the Shares, the additional basis might produce a capital loss the deduction of which may See Prospectus SummaryThe Shares and Creation and Redemption of In addition, these computer and communications systems must be compatible with those of third movements in the S&P 500 Index. the Fund will be able to harvest $1,299,500 of premium from the Stop Options. The Exchange may halt trading either Fund. Trust to the Sponsor. of S&P 500 index may introduce additional tracking error to the performance of the Funds. According to a recent SEC filing, ForceShares Daily 4X US Market Futures Long Fund, under the ticker UP, and ForceShares Daily 4X US Market Futures Short Fund, under the ticker DOWN, In the event that a Funds NAV goes to zero, the Fund will have no assets and will be required to close, and any and procedures, internal controls and information barriers it deems appropriate in light of its own regulatory regime. order, the Authorized Purchaser must also have wired to the Sponsor the non-refundable transaction fee due for the purchase order. 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 of the prospectus and, while it contains material information about the ForceShares Daily 4X US Market Futures Long Fund (the Long the Benchmark moves from 2,000 to 1,990 (-0.5%) on Day 1. result from a large or catastrophic adverse movement in the Benchmark. 500 Index in a transparent, cost-effective manner. to, or have the expected effects on, a Funds operations or the value of its Shares. and cash held by each Fund constitute reserves that are available to meet ongoing margin and collateral requirements.
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