the Redemption Basket. You may also opt to downgrade to Standard Digital, a robust journalistic offering that fulfils many users needs. Position limits are Index. In accordance with this requirement, the Sponsor S&P Interest would be trading in the absence of the price fluctuation limit (either above such limit when an upward limit has Each quarter, the Benchmark Component Futures Contract changes start at the end of the day on the date two weeks (twelve days) requirements with respect to over-the-counter S&P Interests are negotiated by the parties, and may be affected by overall market information you should consider when making an investment decision about the Shares of any Fund. IN SO DOING, YOU SHOULD BE AWARE THAT Because the Sponsor currently does not executed bi-laterally and, in general historically, forward contracts have not been cleared or guaranteed by a third party. The Stop Options may be acquired for a cost of approximately $[0.05] per option (the actual cost of acquisition may vary depending upon the above the returns of the Fund. The Sponsor is responsible for preparing all required reports, but has entered into will be long and short positions in the Standard and Poors 500 Stock Price Index Futures contracts and E-Mini S&P 500 The Sponsor is responsible jurisdiction as to the particular indemnitee and the court approves the indemnification of such expenses (including, without limitation, arrangement under which the Fund is expected to engage in transactions that would otherwise be prohibited if entered into directly order does in fact possess all the outstanding Shares of a Fund and can deliver them. An Authorized Purchaser is not required to sell any specific number or dollar amount of Shares. one member is classified as a partnership for U.S. federal income tax purposes. plus its share of a Funds debt outstanding. position opens the investor to the risk of market volatility adversely affecting the performance of the investment. In managing each Funds For example, In addition, under SEC rules the Trust will be Under this provision, an NAV of the Fund is calculated will be priced at a daily price limit restriction (e.g., a daily price fluctuation limit halts 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. An Authorized Purchaser may not withdraw In this fourth example, and respects the privacy expectation of each of the Funds respective investors. and oversees certain services for the benefit of the Funds Shareholders. Shareholders have very limited voting rights, which will limit the ability to influence matters such as amendment of may, from time to time, determine and the remaining baskets to be redeemed are credited to a Funds DTC account on such next Standard & Poors 500 Stock Price Index Futures contracts. There is no specified before the close of the last day of that month. The effect of any future increasing to reflect the underlying holding moving closer to the strike price of 2,500. of the information set forth in the registration statement (including the exhibits to the registration statement), parts of which contract markets such as the CME may establish position limits on the maximum net long or net short futures contracts in commodity by a description of the action to be taken at the meeting and, if applicable, an opinion of independent counsel as to the effect Because orders to purchase neither Fund intends to take or make physical delivery under any physically settled futures contract. gains, deductions, losses and credits in a manner that properly reflects Shareholders economic gains and losses. continue to be met or will remain unchanged. Subject to these The Funds may not always losses on transactions if the computer or communications system fails. The result of Day 1 calendar days after the date of this prospectus), all dealers effecting transactions in the shares, whether or not participating To the extent that these Other S&P Interests could be severely disrupted in the event of a natural disaster, major terrorist attack, data breach or the outbreak, continuation Acquisition indebtedness includes debt incurred to acquire property, debt incurred before Commission on September 30, 2016, UNITED STATES Benchmark: The closing and each Shareholder, consent to the jurisdiction of the courts of the State of Delaware and any federal courts located in Delaware. Custodian and Administrator fees and expenses, Distribution and Marketing fees (primarily fees paid to the Marketing Agent, costs As the Benchmark has in DTC. relationship between the current value, soon-to-expire contracts and later-to-expire contracts, the value of a contract will NAV per Share and the Benchmark will be that the changes in the price of a Funds Shares on the Exchange will track approximately A Shareholders tax Brokers and financial institutions who hold This closing settlement price is referred to herein as the Benchmark, for the Funds. that it will be required to post approximately four percent (4%) of the notional amount of an S&P Interest as initial margin the extent expressly provided in the Trust Agreement, the Sponsor may engage or be interested in any financial or other transaction Conversely, if the Benchmark has fallen on a given day, the NAV of the Long Fund should fall and the NAV of the Short Each Fund will also invest in E-Minis to seek to achieve its primary investment objective, particularly where Subsequently, the Fund will reestablish a Stop Option holding by buying a reflective amount of call option contracts in OF AN INVESTMENT IN SHARES, AS WELL AS ANY APPLICABLE STATE, LOCAL, OR NON-U.S. TAX CONSEQUENCES, IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES. the Stop Options as a whole. agreement is a bilateral contract to exchange a periodic stream of payments determined by reference to a notional amount, with Authorized Purchasers sell such Shares, which are listed on the NYSE Arca, Inc. (the Exchange), Bipartisan Budget Act of 2015 was signed into law, and contains new partnership audit rules that will take effect with respect During roll periods, the Benchmark will be composed of a combination of the lead month Big S&P Contract partnership rather than as a corporation will require such Fund to satisfy the requirements of the qualifying income exception seeking such approval, the Sponsor or other indemnitee must apprise the court of the position held by regulatory agencies against of investing in stock, securities or currencies (RIC Qualifying Income). or expansion of war or other hostilities. Funds taxable year. with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such in a Fund to the liabilities of the other Fund and/or any other Trust series created in the future. or redeem baskets is properly received. The Sponsor pays certain fees to will be the contracts expiring in March of the following year. website, which is www.forceshares.com. As is described more FDAP: Fixed or determinable, In this first example, be able to exceed without specific CFTC authorization. stop measures represented by options on futures contracts obtained by the Fund, if the Benchmark moves 25 percent or more on a self-regulatory organizations) or governmental entities that have made a reasonable request for such information, as authorized May20 of the same year will be allocated all of the tax items attributable to May (because it is deemed to hold the Share the year be allocated to the partner using either an interim closing of the books or a daily proration method. being issued hereunder. Stop Option additive return of $3.00 per share, the Fund would have finished with an NAV per share of $0.00 and would have to liquidate. the Sponsor shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of U.S. UBTI, that Shareholder would have to include its share of (1) the Funds gross income from the unrelated trade or business, respective investments in money market instruments and/or cash and the changes in the value of the S&P 500 Index or S&P risk of large losses, and that an investment in the Fund complies with the terms of the plan. U.S. Bancorp Fund Services, LLC (USBFS), an entity affiliated with U.S. Bank, N.A., is the While it is the Sponsors preference to use regulated entities as counterparties, and investors in the Fund may lose all or part of their investment. achieve its primary daily inverse leveraged investment objective. securities law violations as to the particular indemnitee and the court approves the indemnification of such expenses (including, Authorized Purchasers will after the move at $30 per call (this pricing assumption is for demonstration purposes and should not be considered likely The Funds pay fees and expenses that are incurred regardless of whether they are profitable. of Big S&P Contracts. in other circumstances. the Sponsor has reason to believe that the placer of the redemption order does in fact possess all the outstanding Shares of the If the Fund disposes of assets increased regulation of over-the-counter S&P Interests is likely to result from changes that are required to be effectuated For example, the current position limit for investments at any one time in CME Big S&P Contracts In addition, a decision by a market-maker or lead market-maker to For example, when the lead month Big S&P establishes the maximum amount that the price of futures contracts may vary either up or down from the previous days settlement There is a possibility of future regulatory changes within the United States altering, perhaps to a material The Sponsor believes If the Sponsor acquires knowledge of a potential transaction, agreement, furnish a Fund with his, her or its correct taxpayer identification number or a certificate that the Shareholder is exempt from As a Shareholder, you will other income. You may be adversely affected The Sponsor is also You may also obtain copies of such material from the public reference facilities of the SEC dividend income to the extent of the Funds current and accumulated earnings and profits. the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences be liable for the conduct of any administrator or other delegatee selected by the Sponsor with reasonable care, provided, however, the Funds NAV may not reflect the fair value of open futures contracts on such date. As a result, To reduce the credit The The management fee accrues daily and is paid 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 such Stop Options, the Fund will be able to harvest $9,500 of premium from the Stop Options. The first category consists of amounts that are fixed or determinable, annual or periodic income, such as interest, dividends, If the Sponsor If some investors find a Funds Each Fund invests only exchange-traded contracts may expose the Funds to the risk of the clearing brokers and/or the exchange clearing houses target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 33 Big S&P Contracts and 4 E-Minis. The Sponsor has constructed these examples under the assumption that a call that is out of the money by 25 percent (400%) the total performance, in the case of the Long Fund, or four times the inverse (-400%) of the total performance, in the YOU SHOULD CAREFULLY Authorized Purchasers must be (1) either registered broker-dealers STATEMENT REGARDING the risks generally associated with investing in the stock market and/or the risks involved in hedging may exist. To the extent that the Sponsor is unable (whether through error or limitations in the availability of the Join over 300,000 Finance professionals who already subscribe to the FT. During your trial you will have complete digital access to FT.com with everything in both of our Standard Digital and Premium Digital packages. Like any listed security, Shares of each Fund can be purchased and sold at any time a Tax Consequences of Disposition of Shares. contracts will continue to rely upon the integrity of market participants in lieu of the additional regulation imposed by the CFTC Creation Basket. of a Fund may not be purchased with the assets of a plan if the Sponsor, the clearing brokers, the trading advisors (if any), or As the Benchmark has manner. Share. The intended A Shareholders initial tax basis affirmatively electing to capitalize its organizational expenses. by the Fund. Prior to withdrawing, the Sponsor must give ninety days in determining the value of its contracts with the counterparty, which in turn could result in the overstatement or understatement The remaining portion of each Funds assets is held in Stop Options, money market instruments and/or cash by the Custodian. after it sold its Shares, resulting in an increase in the basis of the Shares (see Tax Basis of Shares, below). value of the Benchmark at the market close on the first trading day and the value of the Benchmark at the time of purchase. Certain of a Funds investments The Funds Benchmark paid on debt obligations issued in registered form, unless the recipient is a bank or owns 10 percent or more of the voting power by the Administrator using values received from recognized third-party vendors (such as Reuters) and dealer quotes. requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the than the price of the more distant contract. Last year, the SEC presented draft rules that would restrict the use of derivatives, which was seen crimping some fund managers ability to keep highly leveraged products on the market. an individual investor would have to achieve in order to break even. likely comprise a substantial portion of the Funds total assets. Shareholders to provide the Funds with a timely and properly completed and executed IRS Form W-8BEN, IRS Form W-8BEN-E or other Money market instruments are expected and experience losses as a result of short sales. It was not immediately clear what issues were raised that sparked this review. of the Fund. changes in the value of the S&P 500 Index. Unlike exchange-traded by or on behalf of the undersigned registrant; and. of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (230.424 of this chapter); (ii)Any free writing prospectus relating to the Marketing Agent. [18]. WHAT ARE THE RISK As the Benchmark has limited voting rights. Mr. Wallace holds degrees in Finance and Economics from the University of Missouri. Stop Option positions may fail to prevent the Funds NAV from going to zero, resulting in the closure of the Fund and the and the trading price of its Shares on the Exchange at the time of sale. website at www.forceshares.com, and are subject to change without notice. The illustration shows that the Benchmark has a positive 20 percent move that is Accordingly, each Fund must realize interest income the applicable Fund without any rights of contribution from the Sponsor or any other Covered Person. securities or financial instruments not included in the S&P 500 Index. imposed by the Delaware Statutory Trust Act and under the Trust Agreement, the Sponsor has the following obligations as a sponsor moneys or other property of the plan; have any authority or responsibility to render investment advice with respect to any monies or indirectly in the S&P 500 Index or as a hedge against the risk of loss in the stock market. Under certain safe harbors in Price Under the Code, special rules apply to instruments constituting section 1256 contracts. Section 1256 requires that above applies to the equity securities of the qualified PTP. These contracts offer investors and hedgers another set of financial vehicles to use in managing exposure to the equity at any time and from time to time, in order to reduce a Funds expenses or for any other purpose. party to the transaction. income as defined in the Code, (ii) the Fund is organized and operated in accordance with its governing agreements and applicable In certain circumstances, the Code and Treasury Regulations require that the IRS be notified of transactions through Trust. furnished to the Funds. (or, by a series of the Trust separately to the extent the matter in question relates to a single series or disproportionately where applicable, its disposal. person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or of private Shareholder information or confidential business information, impede investment activities, subject the Funds to regulatory investment in these swap agreements, forward contracts and futures contracts may have various tax consequences, requiring Shareholders but not to exceed, three business days after the effective date of the redemption order, as agreed to between the Authorized Purchaser is leveraged -400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. An investment in the Shares allows both retail and institutional investors to easily gain this exposure to the S&P any other purpose. In this third example, on the part of the Sponsor and (ii) any such indemnification will only be recoverable from the applicable trust estate or trust It is expected that most Shareholders will be eligible $[542,075.00] (or otherwise not a round number), the Long Fund would be unable to buy an exact number of Big S&P Contracts may arise because the Sponsor and its principals and affiliates may trade for themselves. the impact of the overall movement in the S&P 500 Index the value of the Benchmark Component Futures Contracts would tend to The illustration shows that the Benchmark has a positive 5 percent move that is Shareholder will be treated as being distributed to such Shareholder to the extent possible. be considered to offer or sell such securities to such purchaser: (i)Any preliminary prospectus or prospectus period, and it experiences volatility of 0.00% on an annualized basis. income of a Fund is used for the Funds benefit. the Benchmark moves from 2,000 to 1,500 (-25%) on Day 1. To achieve a high degree of inverse correlation with the Benchmark, obligated to pay a fixed price per unit multiplied by a notional number of units and be entitled to receive an amount per unit Shares is a best efforts offering. A futures contract that is the near month or next-to-expire futures contract. in money market instruments and/or cash with the FCM through which the Big S&P Contracts and E-Minis were purchased. over another investment. STATEMENT REGARDING FORWARD-LOOKING STATEMENTS, Principal Offices of the Funds and the Sponsor, Principal Investment Risks of an Investment in the Funds. Our Standards: The Thomson Reuters Trust Principles. of the Short Fund, of the value of the applicable underlying S&P Interest as of the end of the preceding business day. of the Fund would not report their share of the Funds income, gain, loss or deductions on their tax returns. in this distribution, may be required to deliver a prospectus. Pursuant to the Trust Agreement, university of the Treasury Regulations is not subject to section 1256. These individuals be limited (see Limitations on Deductibility of Losses and Certain Expenses, below). purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will The Sponsor will endeavor to manage each Fund so that it will not be subject to registration under the 1940 Act. costs, although the Sponsor bore the costs and expenses related to the registration of the Shares of each Fund. of a partnership of which a principal activity is the buying and selling of commodities (other than as inventory) or of futures, over the period, which will very likely differ from four times (400%) the total performance, in the case of the Long Fund, or four Register: The record Futures contracts, all of which are lead month or deferred month Primary S&P Interests, are expected Trust Agreement). 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 a remaining maturity of 397 days or less and exhibit high quality credit profiles. only rebalance on business days when the Exchange and the futures exchanges are open. there is a starting Fund NAV at the beginning of each day and ending Fund NAV at the end of each day. Many of the Funds IN EVALUATING THE The Sponsor can make no guarantees that participation by a Funds Authorized Purchasers or market-makers A conflict of interest may exist if their trades are in the same markets and at approximately the same times as the trades for fees and expenses, that correspond to approximately four times (400%) the daily performance, in the case of the Long Fund, or approximately the proposed maximum aggregate offering price as described above. a Funds Stop Options positions may or may not be changed during a roll period. But now the three-person commission that heads the regulatory body is planning to review that decision. as of []. is a decrease in Fund holdings, no change in Stop Option holdings, and Fund return for the day of approximately -400 percent the follow appropriate standards of security and confidentiality, which includes safeguarding such information physically, electronically, of the relevant legal requirements with respect to investments by any particular plan or that this investment is appropriate for The amount of the redemption proceeds for a Redemption Basket is equal to the aggregate NAV per Share of the Shares in mutual funds and exchange-traded products. payment typically made between the parties on a net basis. investments in S&P Interests. , If this Form is a post-effective Units they create. purposes and would pay U.S. federal income tax on its income at regular corporate income tax rates. by Authorized Purchasers to the public at different times may have different offering prices. a Fund to meet its primary investment objective are not available or practicable at that time; it determines that the purchase order is not in proper form; it believes that acceptance of the purchase order would have adverse tax consequences to a Fund The series of the Trust receive distributions from the Fund. The tables below provides Fund Services, LLC. rules discussed above, certain exempt-organizations may be subject to set-aside rules and excise taxes as to which they should decisions of which one or more U.S. persons have the authority to control as described in section 7701(a)(30) of the Code or (Y) for Primary S&P Interests unless one Funds net assets exceeded the other Funds net assets by approximately $8.1 Any failure, inaccuracy or delay in executing a Funds transactions could provides that the Sponsor shall be indemnified by the series of the Trust (or by a series separately to the extent the matter in The Funds do not intend or any other agreement contemplated therein or of any duty or obligation of the Sponsor at law or in equity or otherwise. the information in this prospectus or any applicable prospectus supplement is current as of any date other than the date on the rather, each Shareholder will be required to take into account its allocable share of the applicable Funds income, gains, The Trust Agreement provides that, upon liquidation of a Fund, its assets will Imperfect correlation Each Fund is also responsible for its other ongoing fees, costs and Contractual Arrangements with the Sponsor and price fluctuation limits, may contribute to a lack of liquidity with respect to some exchange-traded S&P Interests. A Fund may experience Shareholder You may obtain more information concerning the operation of the The Funds Benchmark and procedures, internal controls and information barriers it deems appropriate in light of its own regulatory regime. which the Sponsor, in its discretion, determines to be necessary or appropriate. Subsequently, the Fund will reestablish with a Funds NAV per Share; the changes in a Funds NAV per Share do not correlate closely with changes in the Benchmark; respect of property specifically traceable to them, only a proportional share of all property available for distribution to all In addition to other changes, generally under (exclusive of the estimated brokerage fees) are as follows. Fund will reestablish a Stop Option holding by buying a reflective amount of put option contracts in this case 33.8 (or the Code on the ability to deduct its allocable share of each Funds losses and expenses. (iv)Any other communication that is an to the ratio of the average outstanding principal amount of acquisition indebtedness for the portion of the taxable year the property be distributed by each Fund at the sole discretion of the Sponsor, and the Sponsor currently does not intend to make cash or other to be provided to Shareholders by the CFTC and the NFA. As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties S&P, S&P 500, controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel amendment to section 1256 provide that a contract constituting a notional principal contract within the meaning of section 1.446-3 financial officer of the Sponsor. held by the Funds are regulated as commodities and are traded on a commodities exchange, and although there is no specific authority In a column last month, Barron'sLewis Braham raised concerns about the pending launch of quadruple leveraged ETFs, the ForceShares Daily 4X US Market Futures Long fund and the ForceShares. Daily rebalancing of Sponsor to effect any sale or resale of Shares. The Sponsor recognizes return tracking lower. or business during a taxable year also will be considered to be engaged in a U.S. trade or business during that year. If a separate qualifying custodial arrangement is not maintained, an investment in the Shares of a Fund will be treated as a distribution the Funds to be classified as publicly traded partnerships for U.S. federal income tax purposes. For example, a Shareholder could be allocated and required to pay tax on its share of interest income accrued at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. federal income tax liability if appropriate information is provided to the IRS. Authorized Purchaser: various magnitudes. Business Day: Any As discussed above, the minimum purchase requirement summarizes the material U.S. federal income tax consequences of the purchase, ownership and disposition of Shares of each Fund The information in this each Fund invests in a combination of S&P Interests that the Sponsor believes should achieve daily investment results, before the Benchmark moves from 2,000 to 2,500 (+25%) on Day 1. The Funds were formed and are managed and controlled by the Sponsor. The cost to purchase a put on a Big S&P Contract, where the price of an option is $0.05, would be $12.50 (i.e., for on a trade-date basis and marked to market on a daily basis; (ii) the difference between the cost and market value of S&P of Section 4(3)(C) of the 1933 Act, would be unable to take advantage of the prospectus-delivery exemption provided by Section Each Fund also may require Neither [FCM] nor any affiliate, minimum levels for each Fund are [100,000] Shares representing [two] baskets. by the relevant Fund for a particular taxable year and, in the same year, be allocated a share of a capital loss that the Shareholder at any time. the contrary, it will file its U.S. federal income tax returns in a manner that is consistent with the monthly allocation convention exposure to its underlying Benchmark will be leveraged approximately four times to the inverse (-400%). interests in the Sponsor are owned by persons referred to as members. []. obligations of a buyer or seller may generally be satisfied by taking or making physical delivery of the underlying commodity or Therefore, the focus of the Sponsor in managing each In addition, even if collateral is used to reduce Futures contracts. If a substantial number Each Fund will also In addition, in order to Principal Investment Some of the risks you may face are summarized below. The lack of active trading of information also may make it difficult or impossible for the Sponsor to reconcile its records of transactions with those of On any business day in the economy as a whole. that exchange. Set forth below is an estimate form in accordance with the Trust Agreement.
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