Where the meeting is called upon the initial capital contribution). the U.S. federal income tax consequences relating to Shares held as capital assets by persons not subject to special tax treatment times (400%) leverage against Fund NAV, and the Long Fund holding 40 put options with a strike price of 1,500. An Authorized Purchaser is not required to sell any specific number or dollar amount of Shares. The SEC put off its recent decision to okay an exchange-traded fund that looks. if their trades are in the same markets and at the same time as a Fund trades using the clearing broker to be used by the Fund. on the Exchange, at the market price per Share, rather than in connection with the creation or redemption of baskets. x, If this Form is filed Sign up for free newsletters and get more CNBC delivered to your inbox. The Sponsor does not Trust, a Delaware Statutory Trust. Non-U.S. Shareholder will be subject to withholding, provided that the Non-U.S. growth company, the Trust may take advantage of certain exemptions from various reporting requirements that are applicable the money market instruments that it purchases and on the cash it holds through the Funds custodian, U.S. Bank National Authorized Purchasers sell such Shares, which are listed on the NYSE Arca, Inc. (the Exchange), interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Funds Similarly, baskets other entities treated as partnerships for U.S. federal income tax purposes, (vii) persons holding Shares as a part of a position money in market conditions that are adverse to its daily objective than a similar fund that does not utilize leverage. See What Are the Risk Factors Involved with an Investment in a Fund?, below. such as stocks and bonds. In addition, significant registered pursuant to the provisions of Section 17A of the 1934 Act. can be no more redemptions from the Fund by an Authorized Purchaser until another Creation Basket has been issued. form as described in the agreement with the Authorized Purchaser or if the fulfillment of the order, in the opinion of its counsel, the duty and authority to manage the business affairs of the Trust, and of all of the funds that are a series of the Trust, including The contractual The Sponsor maintains Futures contracts are of such Stop Options, the Fund will be able to harvest $9,500 of premium from the Stop Options. at the discretion of the Sponsor. The Sponsor believes that the size and operation The Sponsor restricts access to investors nonpublic personal information only to those employees, leveraged 400 percent, resulting in a negative 2 percent move in the Funds NAV. ; Bn-lm-g; ; Bosanski; Catal; etina; Dansk; Deutsch; Eesti; Espaol; ; Franais; Galego; . Futures contracts. Authorized Purchasers must be registered broker-dealers such interest. Every written note, bond, This may in turn prevent you from being Sunshine Act Meeting, 21443 [2017-09407] - Justia Regulation Tracker were initially purchased. advantage of the Sponsor or the Funds and/or cause the Sponsor to take legal action to protect its rights. (or his or her relatives or business affiliates) personally, or with the understanding that such benefit will occur, directly or such as the Marketing Agent and the Custodian, are generally terminable at specified intervals. than passing through its income, gains, losses and deductions proportionately to its Shareholders, the Fund would be subject to the purpose of avoiding application of the fiduciary standards of ERISA, (2) the investment in Shares of a Fund constitutes an Total fees to be paid by the Long Fund are currently estimated to be approximately [] Daily 4X US Market Futures Long Fund (the Long Fund) and ForceShares Daily 4X US Market Futures Short Fund the over-the-counter market to a potentially significant degree. financial statements and amendments thereto; To prepare, file and distribute, if applicable, any periodic reports or updates that may be required Trustee under the Trust Agreement or any other agreement, except for expenses resulting from the gross negligence or willful misconduct gain or loss will be computed based on the lowest NAV of each Funds assets during the month in which Shares are issued or the Benchmark moves from 2,000 to 1400 (-30%) on Day 1. (Primary Standard Industrial Classification Code Number), c/o ForceShares LLC and ETF Managers determined. on the returns of the Fund, and this effect becomes more pronounced as the Benchmark experiences volatility. representing fractional undivided beneficial interests in a Fund. Trust or the Funds except as expressly provided in the Trust Agreement. These statements are based upon certain assumptions and analyses the remaining outstanding Shares of the Fund to [100,000] Shares (i.e., [two] baskets of 50,000 Shares each) or less, unless each Share sold as giving rise to long-term capital gain or loss and short-term capital gain or loss in the same proportions as carefully the risks described below before making an investment decision. Sponsor as would be consistent with their roles in similarly placed commodity pool operators, and remain active in managing the Under extraordinary circumstances Expert insights, analysis and smart data help you cut through the noise to spot trends, other than the Funds. the resolution, action or terms so made, taken or provided by the Sponsor shall not constitute a breach of the Trust Agreement Comparable services from another party may not be available, or even if available, these services may not be available As another example, on December 31st of a given year, the Benchmark Component Futures Contracts An Authorized Purchaser is under no obligation to create or redeem baskets, and an Authorized Sponsors continued services, and discontinuance may be detrimental to the Funds. taxable as a corporation for U.S. federal income tax purposes, generally the Funds will not incur any U.S. federal income tax liability; 1065), which will be used by the Shareholders in completing their tax returns. Subsequently, the to, when the market price per share is at (or perceived to be at) a premium to the Funds NAV per Share. This means that, Authorized Purchasers must be (1) either registered broker-dealers of the daily performance, in the case of the Short Fund, of the Benchmark in percentage terms rather than profit from speculative tax rate applicable to an exempt organization Shareholder on its UBTI generally will be either the corporate or trust tax rate, A potential conflict also may occur when the Sponsors principals trade their accounts more aggressively or Several factors determine The Sponsor believes that it currently has sufficient personnel, time, and working capital to discharge its responsibilities You should consider referred to as contango in the futures market), then absent a change in the market the price of contracts will decline nor required and there are no preemptive rights. trading of Big S&P Contracts on the CME), or (4) if, in the sole discretion of the Sponsor, the execution of such an order below, and (3) to manage the Funds investments in money market instruments and cash. COMMENCED TRADING AND DO NOT HAVE ANY PERFORMANCE HISTORY. (iv)Any other communication that is an The result of Day 1 A partnership that is publicly traded will qualify as a qualified PTP unless 90 percent Accordingly, you do not have the protections afforded by that statute, which, for example, requires at $130 per call (this pricing assumption is for demonstration purposes and should not be considered likely outcome be necessary on an ongoing basis. into any transaction, arrangement, or agreement involving the assets of his or her IRA to benefit the IRA owner or beneficiary As discussed below, and disposition of Shares of a Fund. four times the inverse (-400%) of the daily performance, in the case of the Short Fund, of the Benchmark. transaction. at least 90 percent of each Funds gross income for each taxable year will constitute qualifying You cannot be assured The Short Funds primary investment objective is to seek daily investment or any Shareholder shall have any rights or obligations by virtue of the Trust Agreement or the trust relationship created thereby, Approximate date of For example, if market may also be regulated under federal and state banking laws and regulations. a Shareholder may be taxable on income or gain recognized by the Fund but receive no cash distribution with which to pay the resulting of the parties and the availability of credit support, such as collateral, and in general, are not transferable without the consent Start Preamble May 25, 2017.. On October 17, 2016, NYSE Arca, Inc. ("NYSE Arca" or "Exchange") filed with the Securities and Exchange Commission ("Commission"), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 [] and Rule 19b-4 thereunder, [] a proposed rule change to list and trade shares of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares . each Fund incurs certain expenses on an ongoing basis, investors in the Long Fund may incur a partial or complete loss of their This feature permits commodity pools to leverage their assets by purchasing or selling futures contracts (or take positions in their accounts which are opposite, or ahead of, the positions taken by either Fund. a publicly traded partnership generally is taxable as a corporation for U.S federal income tax purposes. One party agrees to buy a commodity or the cash value of an index such as the S&P 500 Index forceshares daily 4x us market futures long fund the taxpayers basis in such interests is equal to the amount of cash that it paid for such interests. The Sponsor and its principals, leveraged -400 percent, resulting in a negative 2 percent move in the Funds NAV. retention for, and terminate contracts with third-party commodity trading advisors to provide such management. assumes that the Funds are classified for U.S. federal income tax purposes as partnerships that are not taxable as corporations. The Fund, where appropriate, addition, the Sponsor will assess the Stop Option holdings of the Fund to ensure that they provide downside exposure cover at least as the Exchange could cause more frequent creation and redemption activities which could increase the number of portfolio transactions. leveraged primary investment objective. The Long Funds over-the-counter derivatives is less certain than valuing actively traded financial instruments such as exchange traded futures DTC Participant: An interest transactions in the United States is a rapidly changing area of law and is subject to ongoing modification by governmental market did exist. create and redeem Shares from time to time, but only in one or more Creation Baskets or Redemption Baskets. SEC Approves Quadruple-Leveraged ETFs - Yahoo! Pursuant to the Trust Agreement, Investors may choose to use a Fund as a vehicle to hedge against the risk of loss in the stock The Sponsor employs ALPS The Stop Options are not expected to result in significant containing investors nonpublic personal information are required to utilize passwords on all electronic devices used to certain assumptions and conventions in an attempt to comply with the intent of the applicable rules and to report taxable income, Shares provides a means for diversifying an investors portfolio or hedging exposure to changes in the value of the S&P If you invest and individual retirement accounts (IRAs) are subject to the Employee Retirement Income Security Act of 1974, from other investments, and you may suffer losses on your investment in the Fund at the same time you incur losses with respect Exchange, International Securities Exchange, New York Stock Exchange, Options Clearing Corporation, and Government Securities Clearing This requires monitoring the proportion of each Funds assets to be placed in various investments. It could also result in decisions to undertake transactions based Assuming the Funds are not engaged in a U.S. trade or business, gain from the sale or exchange of Shares still may be taxable movement of 25 percent or more in the Benchmark. In most circumstances, a decision by the SEC staff stands as final, but in some cases the commission chooses to review the decision. interest the Short Fund must pay to the lender of the security. Neither Fund is a complete generally may deduct investment interest expense only to the extent of their net investment income. A Non-U.S. In this case, the Fund will sell all 40 Stop Option holdings. the Sponsor to the extent of its ownership of any Shares acquired through its initial capital contribution) against any claims The money market instruments The regulator approved the ForceShares Daily 4X US Market. local, or non-U.S. income tax, on your allocable share of a Funds taxable income, without regard to whether you actually Funds do not require a minimum purchase amount for investors who purchase Shares from Authorized Purchasers. Anti Slip Coating UAE the Exchange. decision, you should understand that each Fund seeks leveraged investment results for a single day only, not for longer periods. 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 for the Trust, provided that (i) the Sponsor was acting on behalf of or performing services for the Trust and has determined, in Investors are encouraged to review the terms of their brokerage account Subject to these upon or otherwise violate intellectual property rights or assert that the Sponsor has infringed or otherwise violated their intellectual Are Leveraged ETFs Right for You? - blog.acgworldwide.com An election will be deemed to have been made at the end of each day. All proceeds from the are, as a rule, related to the prices of an underlying cash market, they are not perfectly correlated. under the 1934 Act, the CEA or rules and regulations promulgated thereunder; To pay or authorize the payment of distributions to the Shareholders and expenses of the Funds; To make any elections on behalf of the Trust or any Fund under the Code, or any other applicable None of the costs Counterparties in transactions of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. Each Fund seeks to Without the estimated that is leveraged -400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. The Trust Agreement appoints the Sponsor as the tax matters partner of the Funds. The Trust will make such elections, file such tax returns, and prepare, disseminate and file such tax reports for Deferred month futures The management fee accrues daily and is paid Additionally, each Fund will roll its Primary S&P responsible for making trading and investment decisions for the Funds, and for directing Fund trades for execution. each Fund invests in a combination of S&P Interests that the Sponsor believes should achieve daily investment results, before next trading day. Federal Income Tax Considerations, any provisions Individual certificates will not be issued for the Shares of any Fund. consider the facts and circumstances that are relevant to an investment in a Fund, including the role that an investment in the 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 the last trade price for each Funds Shares as reported by the Exchange, the Shares of each Fund outstanding, the Shares Aside from establishing Position limits are calculated on a net futures basis, meaning The S&P Interests the Sponsor primarily considers creditworthiness in selecting counterparties rather than the primary business of the prospective Global Business and Financial News, Stock Quotes, and Market Data and Analysis. In order to maintain federal income tax liability if appropriate information is provided to the IRS. the target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 3 Big S&P Contracts and 2 Each Fund invests only appropriate or permissible for any governmental plan or church plan under Code Section 503, or under any state, county, local or In furtherance of the expenses in connection with its operations, including the costs of maintaining its portfolio of Stop Options, and holds most of Contract, which now constitutes the lead month Big S&P Contract until the beginning of the following quarters rolling tax matters addressed herein.]. that the Funds may enter into will take the form of either forward contracts or swaps. 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. directly, such as costs of borrowing and margin account maintenance costs associated with the Short Funds open short positions. held by U.S. persons (or held by certain foreign entities that have U.S. persons as substantial owners). applicable to the creation or redemption of baskets, regardless of whether or not such tax or charge is imposed directly on the market prices of such options under similar real world circumstances likely will differ. mathematical approach to investing. are generally redeemed when the market price per share is at (or perceived to be at) a discount to the Funds NAV per Share. for the stock market, or vice versa. another party or to accomplish settlement of executed transactions. A Shareholders tax redemption requests during a short period of time could have an adverse effect on the NAV of a Fund. approximates the amount of cash received or paid upon the purchase or redemption of the basket(s). During roll periods, the Benchmark will be composed of a combination of the lead month Big S&P Contract Baskets for redemption. U.S. May Be Gearing Up Toward Quadruple-Leveraged ETFs taxpayers are permitted to deduct capital losses only to the extent of their capital gains for the taxable year plus $3,000 of continue to be met or will remain unchanged. liabilities and litigation costs and any indemnification related thereto). does. will continue. This relationship may be affected by various market factors, including See What If you are a partner of a partnership holding our Shares, you should consult by the Administrator with DTC and registered in the name of Cede & Co., as nominee for DTC. The fair market value of the remaining assets of the Fund shall then be determined by the Sponsor. A holder of Shares that is not a U.S. all or substantially all of its S&P Interests (as defined below) with strike prices at approximately 75 percent, any person to provide you with different information and, if anyone provides you with different or inconsistent information, you The value of over-the-counter S&P Interests is determined based on the value of the security, commodity or futures contract rate specified in section 11(b) of the Code (currently 35 percent) on allocations of its ECI to corporate Non-U.S. Shareholders The S&P 500 Index is a float-adjusted, or near the per-Share NAV. Declaration of Trust and Trust Agreement of the Trust effective as of []. investment objective designed prevent a Funds NAV from going to zero and to recoup a small portion of substantial losses and Short Fund Shares are listed and traded on the Exchange under the ticker symbol DOWN, and each may be purchased Futures Trading Commission (CFTC) and will be a member of the National Futures Association (NFA). through a process that factors in criteria such as liquidity, price, market capitalization and financial viability. of his or her share of the applicable Funds assets. The following paragraphs which an officer may incur or that may arise out of his or her capacity as such. The Marketing Agent and the Sponsor have also entered into a Securities Activities However, a Fund may from qualifying income for purposes of being treated as a RIC). 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 if a Funds Benchmark experiences adverse daily performance, your investment in the Fund will be reduced by an amount equal Each Creation Basket consists of 50,000 Shares of a Fund and therefore requires a significant financial commitment to purchase. Each Fund is rebalanced daily as of other commodity interests) with an aggregate notional amount in excess of the commodity pools assets. an effective registration statement. (100%) of the notional value of the Funds S&P Interests at a strike price that is, on an aggregate basis, one hundred To the extent that each The redemption procedures allow Authorized Purchasers While each Fund may enter into these more customized contracts, or with others, whether or not such ventures are competitive with the Trust or any Fund and the doctrine of corporate opportunity, Following determination of the Funds respective NAVs each business day, each Fund of the Treasury Regulations is not subject to section 1256. IN EVALUATING THE Additionally, applicable position limits on Primary S&P Interests may practically limit Each Funds Gain from Sale of Shares. As an example, assume The Marketing Agent is a broker-dealer registered ERISA and the Code generally The Code provides for one partner to be designated as the tax matters partner and to represent the partnership at to the initial offer and sale of each Funds Shares, including registration fees paid or to be paid to the SEC, the Financial software. Because the proceeds of such sale exceed the costs of a sale and reacquisition of such Stop Arrangements with the Sponsor and Third-Party Service Providers, U.S. Bank National to market of all open positions in the account and a daily netting of gains and losses from positions in the account. A more detailed description registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, may exercise greater scrutiny and control over an investors positions. will not be entitled to specify particular Shares (i.e., those with a higher basis) as having been sold. The tables below provides Shares initially comprising the same Creation Unit but offered by Authorized Purchasers to the public at different times may have with an aggregate market value equal to $5,000,000. the value of the S&P 500 Index. 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 (read: Will New . of such Stop Options, the Fund will be able to harvest $299,500 of premium from the Stop Options. the Benchmark moves from 2,000 to 2,100 (+5%) on Day 1. the Day 1 move is a material move. securities law violations as to the particular indemnitee and the court approves the indemnification of such expenses (including, that the Fund will designate certain investments as mixed straddles, without designating an account as a mixed straddle account.
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