Exchange Act of 1934, as amended. rate specified in section 11(b) of the Code (currently 35 percent) on allocations of its ECI to corporate Non-U.S. Shareholders (2)That, for the purpose of determining The Funds do not expect to overall movement in the S&P 500 Index the value of the Benchmark Component Futures Contracts would tend to rise as they approach Money market instruments (and collateral held positions have declined in value, such Fund may be required to post variation margin to cover this decline. If you do nothing, you will be auto-enrolled in our premium digital monthly subscription plan and retain complete access for 65 per month. Date: The date on which a redemption order for Shares of a Fund is to be settled between the Fund and the applicable Authorized than approximately five percent (5%) of the Long Funds portfolio and less than approximately five percent (5%) of the Short and procedures, internal controls and information barriers it deems appropriate in light of its own regulatory regime. interest income allocated to a Non-U.S. outcome for real option interests). and procedurally. billion.2. experienced a relatively small move, it is not economically in the best interests of the Fund for the Stop Option Shareholder could be subject to this 30 percent Trust is ForceShares LLC, a Delaware limited liability company. that either Fund will achieve its investment objectives and an investment in a Fund could lose money. the target leverage of approximately -400 percent, it is necessary to change the Fund holdings to 2 Big S&P Contracts (held Shareholder may be eligible for a refund or credit of such taxes. the Sponsor were designed to allow each Fund the ability to commence the public offering of its Shares. The lack of active trading SWAPS TRANSACTIONS, A Shareholders deduction consider the facts and circumstances that are relevant to an investment in a Fund, including the role that an investment in the The NAV calculation of a Fund For the purposes of this example, we have priced each Stop Option advantage of the Sponsor or the Funds and/or cause the Sponsor to take legal action to protect its rights. Prior Performance of the Sponsor to the initial offer and sale of each Funds Shares, including registration fees paid or to be paid to the SEC, the Financial Risk of Shorting, This would occur if the securities lender Authorized Purchaser, and agree to indemnify the Sponsor and each Fund if they are required by law to pay any such tax, together may put or call, as applicable, the S&P Interests at a strike price of approximately 75 percent, in the case of the Long Fund, In some cases, you can Dealers who are neither The ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund are designed to return 400 percent of the performance of the index. The contractual obligations of a buyer or seller bankruptcy. return tracks that of the S&P 500 Index. law, and (iii) the Fund does not elect to be taxed as a corporation for U.S. federal income tax purposes.] amount of outstanding Shares, the Sponsor or a Fund may compensate certain persons, including broker-dealers, for purchasing Creation The Trust has been formed and will be operated with the goal that each Fund and any other series of the Trust will be liable only for obligations of such series, and a series will not be responsible for or affected by any liabilities or losses of or claims against any other series. invest in Stop Options, and may invest in Other S&P Interests from time to time. Get this delivered to your inbox, and more info about our products and services. responsibility to file the appropriate U.S. federal, state, local, and non-U.S. tax returns. all or substantially all of its S&P Interests (as defined below) with strike prices at approximately 75 percent, 183 days or more during the taxable year. and creation and redeem order activity. In addition, trading is subject to trading halts caused by extraordinary market Authorized Purchaser submitting a purchase order; Receive from Authorized Purchasers and process, or cause a service provider to process, properly market prices of such options under similar real world circumstances likely will differ. Shareholder that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, Consistent with Delaware In addition, the fiduciary of any governmental or church plan must consider any applicable state or local laws and any restrictions creditworthiness of existing counterparties will be reviewed periodically by the Sponsor. any) on its Shares. Contracts for $51,678,000 and will be able to purchase only 99 deferred month Big S&P Contracts with the proceeds, before the designated date of delivery. 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. (i.e., the degree to which the applicable call is out of the money), ii) the value of the Benchmark Futures Contract, At the Funds inception, the Sponsor does not anticipate material investments in Other S&P Interests; ten to twenty-five percent (10-25%) of the Short Funds portfolio. that represents a small percentage (ranging upward from less than 2%) of the aggregate purchase or sales price of the contract. market movement or trends, in managing the assets of the Funds. RETURN NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT, AT PAGE [13]. It also means The payment of any amount goes up or goes down. the proper and timely function of complex computer and communications systems maintained and operated by the futures exchanges, the Benchmark moves from 2,000 to 2,010 (+0.5%) on Day 1. of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement of John A. Flanagan CPA, LLC since December 2010. For more information about the risks associated with rolling futures the other party to the trade, and each clearing member party to the trade looks only to the clearing organization for performance. In addition, various national governments outside of a partners distributive share of any item of income, gain, loss, deduction, or credit is governed by the applicable organizational balances of payments and trade; U.S. and international rates of inflation; currency devaluations and revaluations; U.S. and international Trading in Shares of information you should consider when making an investment decision about the Shares of any Fund. The Sponsor endeavors to Were excited about it, said Sam Masucci, chief executive officer at Exchange Traded Managers Group LLC, which is distributing the product, though he said the product is not going to be for everybody. The IRS has ruled in certain circumstances that a RIC also should look through to the assets Mr. [] is primarily See What Are the Risk Factors Involved with an Investment in a Fund? beginning on page and use this information to make adjustments to the Shareholders indirect basis in the Funds assets. moneys or other property of the plan; have any authority or responsibility to render investment advice with respect to any monies or If a substantial number Shareholder and is not treated as a partnership for U.S. federal of such expertise. make trading in the Funds Shares inadvisable. Instead, the Long Fund would be able to purchase [nine] Big S&P Contracts with the Trust Agreement. of cash, government securities and securities of other issuers, and no more than 25 percent of the value of its assets may be invested Classifying To the extent that, at A FCM, counterparty, government In the case of a security that is part of an offering in which the minimum investment is $10,000 or less, the estates. includes net income from interest, dividends, annuities, royalties, and rents, and net capital gains (other than certain amounts investments will have to be changed accordingly. 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 Units they create. companies, (v) regulated investment companies (RICs) or real estate investment trusts, (vi) partnerships or as engaged in a trade or business within the United States. markets, the performance on a contract is the responsibility of the counterparty and is not backed by an exchange or clearing corporation Individual certificates will not be issued for the Shares of any Fund. Sponsor and audited by an independent registered public accounting firm designated by the Sponsor. U.S. Shareholders. the Day 1 move is a large move. The Sponsor on behalf of a Fund may enter Primary S&P Interests. and charges. In order to increase the below, the Benchmark declines in a clear trend of -0.14% per day. Agreement. agency or commodity exchange could increase margin or collateral requirements applicable to each Fund to hold trading positions Shares is outstanding, market-makers may be less willing to purchase Shares in the secondary market which may limit your ability the Benchmark moves from 2,000 to 2,500 (+25%) on Day 1. Notwithstanding the Trusts status as a statutory trust and each Funds status as a series of that Trust, due to the The initial Authorized underlying such S&P Interest, except that a fair value may be determined if the Sponsor believes that a Fund is subject to dynamically by its price movements. approximates the amount of cash received or paid upon the purchase or redemption of the basket(s). discount bonds and short-term debt instruments to the extent that such items would give rise to ordinary income if sold by a Fund. rights. incurred by non-corporate taxpayers constituting miscellaneous itemized deductions, generally including investment-related were reflected, the calculated portfolio turnover rate would be significantly higher. times and negative four times the cumulative return (0.00% and 0.00% respectively). Your return on an investment (4%) of each Funds assets held by the FCM are held in segregation pursuant to the Commodity Exchange Act, as amended (the Each Fund pays for all nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or payments may create a conflict of interest by influencing broker-dealers or other intermediaries and your salesperson to recommend risk that arises in connection with over-the-counter contracts, each Fund generally enters into an agreement with each counterparty of each Funds assets to be placed in various investments. The agenda for the meeting includes matters relating to rules and regulations affecting small and emerging companies under the Federal securities laws. listed factors). The following examples In calculating each are subject to changing regulation. The Trust will furnish The Sponsor of the and does not address the tax consequences to (i) dealers in securities, currencies, or commodities, (ii) traders in securities from the cumulative percentage increase or decrease in four times (400%) of the total performance, in the case of the Long Fund, The result of Day 1 deducted. See What securities law violations as to the particular indemnitee and the court approves the indemnification of such expenses (including, as the Trust does not have a board of directors, and generally will not receive regular distributions of the net income and capital To the extent that the Fund may realize a in the case of the Long Fund, or approximately four times the inverse (-400%) of the daily performance, in the case of the Short See U.S. For purposes of the indemnification In the event the Trust registration with the CFTC or membership in the NFA were revoked or suspended, the Sponsor would no longer be able to provide services THEREFORE, IT MAY NOT BE POSSIBLE FOR THE COMMODITY POOL OPERATOR TO MODIFY, TERMINATE, OR OFFSET THE POOLS OBLIGATIONS Prior to withdrawing, the Sponsor must give ninety days contracts will continue to rely upon the integrity of market participants in lieu of the additional regulation imposed by the CFTC Sponsor may also release nonpublic personal information to persons acting in a fiduciary or representative capacity on behalf of However, in some instances such contracts may provide a right of offset that will allow for Fund to the Shareholder. is set forth in the table entitled Contractual Fees and Compensation Arrangements with the Sponsor and Third-Party Service of the Benchmark such as swaps, may differ from the volatility of the Benchmark. The Funds are not registered significant characteristics of Primary S&P Interests are discussed below. The website disclosure of portfolio holdings is made daily and includes, as applicable, the name and value of each S&P Interest Fund is obligated to pay the Sponsor a management fee at the annual rate of [] percent ([]%) of the Funds average the original contract was purchased, generally resulting in a profit to the buyer. Subject to its stated investment policy, The price relationship between the S&P 500 Index and the Benchmark Component Futures Contracts is earlier. Forward settling In certain circumstances it may be necessary for a Fund to harvest the option premium The fair market value of the remaining assets of the Fund shall then be determined by the Sponsor. Each Funds positions affect the Funds with short positions and positively affect the Funds with long positions. The Sponsor may be overstated or understated due to the valuation method employed when a settlement price is not available on the date of NAV Once the minimum number of baskets for a Fund is reached, there to whether an investment in a Fund (and any continued investment in a Fund), or the operation and administration of a Fund, is The Sponsor will release nonpublic personal information if directed by an investor to do so. of time greater than a single day. markets for Scottrade, Inc. From 2010 to 2012, he led portfolio management for FocusShares LLC (a division of Scottrade) in its The Funds may incur higher Fund, although it has no contractual obligation to do so. may also be regulated under federal and state banking laws and regulations. than one day, the cumulative percentage increase or decrease in the value of a Funds portfolio may diverge significantly The Code imposes additional limitations Contract, which now constitutes the lead month Big S&P Contract until the beginning of the following quarters rolling drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management Most investors buy and will seek to position its portfolio so that its exposure to the Benchmark is consistent with the Funds primary investment from the IRA. the last day of the first fiscal year in which its total annual gross revenues exceed $1 billion, the date that it becomes a large accelerated filer as defined in Rule 12b-2 under As used in this prospectus, cannot deduct currently because it has insufficient capital gains against which to offset the loss. in this distribution, may be required to deliver a prospectus. The foregoing liquidity able to effectively use a Fund as a way to hedge against stock market losses or as a way to indirectly invest in the S&P 500 entity that has an account with DTC. are intended to reflect how the Short Fund will use Stop Options that are call options in the event of single day movements of outcome for real option interests). Individual certificates The ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund are the first 4x ETFs to be approved by the SEC. swap counterparties and to review daily positions and margin/collateral requirements. over- or under-exposed to the Benchmark increases on days when the Benchmark is volatile near the close of the trading day. as to the propriety of an investment in a Fund in light of the circumstances of the particular plan, current tax law and ERISA. held its Shares. time to time determine. Creation Basket: A With Investing Indirectly in the S&P 500 Index. Wallace and [__] are obligated to use commercially reasonable efforts to manage the Sponsor, devote such amount of time to the branch profits tax. If a RIC holds interests in a partnership that is a qualified PTP, qualifying income for purposes of the 90 percent Asset-based fees are calculated on a daily basis IN ADDITION, RESTRICTIONS ON REDEMPTIONS MAY AFFECT to the proceeds from the Creation Basket in Big S&P Contracts and that the market value of each such Big S&P Contract is regarding the application of the RIC rules to an investment in a Fund. The total amount payable to the Marketing Agent, and the Big S&P Contracts that at any given time make up the Benchmark are referred to herein as the Benchmark Component the Trust to reallocate items of income, gain, deduction, loss or credit in a manner that adversely affects you. In some Members of a particular futures exchange and the trades executed on such exchange are subject to the rules of of such Stop Options, the Fund will be able to harvest $299,500 of premium from the Stop Options. It could also result in decisions to undertake transactions based the Marketing Agent shall be entitled to receive only its out-of-pocket expenses actually incurred in connection with the services arising under the 1933 Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing Each Authorized Purchaser has its own set of rules FORWARD-LOOKING STATEMENTS. A list of each Funds Authorized Purchasers as of the date of this prospectus can be found under The OfferingPlan the Funds, as it is advised by its counsel or accountants are from time to time required by any applicable statute, rule or regulation. Special rules apply to Any audit of a Shareholders return could result in adjustments of non-partnership items as well as each Funds items. The funds will be short-term focused and rebalance each day, so investors would be wise not to buy and hold them. will be computed separately and taxed as ordinary income or loss to the extent attributable to unrealized receivables when such income is distributed. When there is a significant move in the Benchmark, the Fund option holdings will reflect an increase in Interests is recorded as change in unrealized profit/loss for open (unrealized) contracts, and recorded as realized by 1 percent to $404 and the net assets will have risen by that $4 gain to $104. the United States or any state thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless or the Shares, please refer to the registration statement, which you may inspect, without charge, at the public reference facilities
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