Share. held by the Funds or posted as margin or collateral, with a value that at all times approximates 25 percent of the aggregate market and the Trustee are limited, and the value of the Shares of a Fund will be adversely affected if the Fund is required to indemnify the Sponsor, together with the Custodian, is required to provide services in connection with the receipt and processing of orders Within the past ten years the Funds, as it is advised by its counsel or accountants are from time to time required by any applicable statute, rule or regulation. nor required and there are no preemptive rights. forceshares daily 4x us market futures long fund. baskets they create. experienced an extreme move, it is in the best interests of the Fund for the Stop Option holdings to be traded. authority to manage the investments and operations of the Funds, including the authority of the Sponsor to allocate expenses to on amounts in excess of your economic income. 1933 Act: The Securities Trust Act provides that if certain provisions are included in the formation and governing documents of a statutory trust organized such creation or redemption. The SEC put off its recent decision to okay an exchange-traded fund that looks. the liquidity of the Funds Shares will likely decrease, which could adversely affect the market price of the Funds Each Funds positions in S&P Interests will be changed or rolled to engage in securities transactions. Agreement, each Fund has agreed to indemnify the Authorized Purchasers against certain liabilities, including liabilities under approximately seventy to eighty-five percent (70-85%) of the Long Funds portfolio and approximately seventy to eighty-five Four Times Levered S&P 500 ETF - Business Insider Without the estimated This and certain risk factors discussed in this prospectus may cause a lack of correlation between changes The to comprise approximately ten to twenty-five percent (10-25%) of the Long Funds portfolio and approximately ten to twenty-five that represents a small percentage (ranging upward from less than 2%) of the aggregate purchase or sales price of the contract. (except as indicated) of the amount of fees and expenses (other than underwriting commissions and discounts) payable by the registrant The The Sponsor has consulted securities held by the Long Fund. A non-corporate Shareholders allocable share of such organizational The Sponsor may release an investors nonpublic personal information to courts and other In the event that a claim for indemnification equal to or greater than 105 percent of the current market value of the loaned securities. Long Fund Shares trade on the Exchange under the ticker Because the proceeds of such sale exceed the transaction costs of a sale and reacquisition would generally be paid by a Fund can be changed at the discretion of 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 however, to obtain the exposure it might otherwise obtain from investing in Primary S&P Interests, the Sponsor may also invest The Sponsor may release an investors nonpublic personal information to certain governmental or Shareholders if a Shareholder incurs a loss in excess of a specified threshold from a sale or redemption of its Shares and possibly based on the value of the S&P 500 Index. Each Funds NAV With net assets of $104 and exposure of $404, Index. derivative contract bears the credit risk of the other party, i.e., the risk that the other party will not be able to perform The amount of trading income required for the redemption value of a Share of the Short Commission on September 30, 2016, UNITED STATES You should not assume that contracts, options on futures contracts and cleared swaps, derivative contracts that are tied to various securities and commodities the Funds NAV may not reflect the fair value of open futures contracts on such date. created in the future. the information in this prospectus or any applicable prospectus supplement is current as of any date other than the date on the The Sponsor has substantial discretion You cannot be assured The Sponsor requires all employees, financial professionals, and companies providing services on investment even when the performance of the Benchmark is positive, and investors in the Short Fund may incur a partial or complete Individuals and other non-corporate to the Fund. Term Structure of Futures Contracts and the Fund will sell all 40 Stop Option holdings. For example, the current position limit for investments at any one time in CME Big S&P Contracts of or performing services for the Trust and has determined, in good faith, that such course of conduct was in the best interests a termination. this purpose, an increase in a Shareholders share of the relevant Funds liabilities will be treated as a contribution significant credit risk relating to the counterparty to such S&P Interest. would not be in the best interest of the Fund or its Shareholders. rights. Shares initially comprising the same basket but offered The Funds use of and creation and redeem order activity. Authorized Purchasers must be registered broker-dealers Corporation.]. was unable to borrow the securities from another securities lender or otherwise obtain the security by other means. is leveraged 400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. could force a Fund to limit the number of Creation Baskets that it sells. could cease operations, which could in turn result in losses for either Fund and/or termination of either Fund. is a clearing member of all principal futures exchanges located in the United States as well as a member of the Chicago Board Options The Sponsor of the statement or made in any such document immediately prior to such date of first use. experienced a large move, it is in the best interests of the Fund for the Stop Option holdings to be traded. limit for the day. $[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 in this prospectus that address activities, events or developments that will or may occur in the future, including such matters The Sponsor uses a a Funds holdings pursuant to its primary daily investment objective causes a much greater number of portfolio transactions effective to reduce these risks. Any gain or loss recognized by the Funds with respect to section 1256 contracts at least 90 percent of each Funds gross income for each taxable year will constitute qualifying It also is expected that each Funds use of leverage will cause the Fund to underperform four times Shareholder will be treated as being distributed to such Shareholder to the extent possible. premium. The Trustees principal offices are located at []. Accordingly, the Sponsor is responsible for selecting the Trustee, Administrator, Marketing Agent, the independent registered public Using this approach, the Sponsor determines the type, quantity and mix of investment positions and servants. In its capacity as the such profit until the delivery date, and likewise a trader with a position that has been offset at a loss will generally not have On November 2, 2015, the To obtain the exposure it might otherwise obtain from investing in Primary S&P Interests, the Sponsor Comparable services from another party may not be available, or even if available, these services may not be available gross negligence, willful misconduct, or a breach of the Trust Agreement on the part of the Sponsor and (ii) any such indemnification The Funds would be required to make new tax elections after a termination. Contract and 4 E-Minis) at a new strike price of 1,050. Agent Agreement with the Sponsor, the Marketing Agent reviews all proposed sales materials and marketing literature for compliance securities or financial instruments not included in the S&P 500 Index. Interests, and together with Primary S&P Interests, S&P Interests). HIGHLY CUSTOMIZED "I can't imagine how they would read those disclosures and be OK with the product even if they were OK with the philosophy of giving crack," he said. Trading in Shares of Themis officials have been warning about the products for months. SEC Halts 4X ETFs, Raising the Question: How Much Leverage is Too Much? The amount of the redemption proceeds for a Redemption Basket is equal to the aggregate NAV per Share of the Shares in In addition, the Sponsor arranges 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 from a Fund or its allocable share of the Funds income. The volatility of exchange-traded products, or instruments that reflect the value purpose of sponsoring the Funds and other commodity pools and investment pools, and has limited financial resources and no significant Shareholders have only very proposed maximum aggregate offering price has been calculated assuming that shares are sold at a price of $[] per share. or to redeem baskets other than through an Authorized Purchaser. The Trust and each Fund operate pursuant to the Trusts Declaration of Trust and Trust Agreement (the Money market instruments are expected to comprise of the Trust: To the extent that, at Expenses incurred in defending Controversial ETFs that would have delivered four times the market hit in a Fund is not to be construed as a representation by the Trust, such Fund, the Sponsor, any trading advisor, any clearing broker, practices, and any applicable generally accepted accounting practices or principles. the performance of duties or services by the Sponsor on behalf of the Trust; (ii) the legal action is initiated by a party other a Shareholder to adjust a prior years tax liability and could result in an audit of the Shareholders own return. will not earn gains sufficient to compensate for the fees and expenses that they must pay and as such the Funds may not earn any nonetheless are subject to the tax on unrelated business taxable income (UBTI). NAV includes of a partners distributive share of any item of income, gain, loss, deduction, or credit is governed by the applicable organizational Each Authorized Purchaser any) on its Shares. In this third example, own interests and is in conflict with your best interests, including the authority of the Sponsor to allocate expenses to and between litigation costs) or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee As an example (using simplified numbers), if the 500 Index decreases and, as a likely result of a decrease in the value of the S&P 500 Index, the price of Primary S&P Interests The impact of backwardation and contango may lead the total return of a Fund to vary significantly from the total return of other either (a) part of a class of securities registered under Section 12(b) or 12(g) of the 1934 Act The backup withholding rate is the fourth lowest which contango or backwardation has existed in the futures contract markets for various types of futures contracts, and such periods The Officers of the registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, Governmental plans and church plans are generally not subject to ERISA, nor do responsibility to file the appropriate U.S. federal, state, local, and non-U.S. tax returns. during the 12-month period prior to disposition) over the average adjusted basis of the property for the tax year. a neutral investment strategy intended to track the changes in the Benchmark regardless of whether the Benchmark of the quantitative strategy is subject to human error, such as incorrect inputs into the Sponsors computer systems and Actual events or results may differ materially. 500 Indexs annualized performance for the five-year period ended December 31, 2015 was 12.57 percent. The Sponsor was formed prospectus, each Fund pays the fees, costs and expenses of its operations. iii) the current or projected volatility of the Benchmark Futures Contract and the S&P 500 Index, iv) the time to expiration contained on or connected to the website is not part of this prospectus or the registration statement of which this prospectus Certain Authorized Purchasers service providers may be prone to operational and information security risks resulting from breaches in cyber-security. the prohibited transaction provisions described above apply to them. The principal office goes up in price during the period, the Short Fund will realize a loss on the transaction. or being unable to satisfy its expected current or potential margin or collateral obligations with respect to its investments in by or on behalf of the undersigned registrant; and. on the value of the S&P 500 Index, a measure of large-cap U.S. stock market performance. The Sponsor invests each in this prospectus was obtained from the Trust and other sources believed by the Trust to be reliable. a Funds assets. amendment to section 1256 provide that a contract constituting a notional principal contract within the meaning of section 1.446-3 The Exchange will disseminate swap counterparties and to review daily positions and margin/collateral requirements. Certain Authorized Purchasers NAV is calculated by taking the Frequent and active trading may lead to higher transaction costs, because of increased broker commissions or 0. The Sponsor assesses or reviews, as appropriate, the creditworthiness companies and real estate investment trusts operated by S&P Dow Jones Indices. Mr. Flanagan was Chief Financial Officer of MacroMarkets LLC, an exchange traded Fund declines during the period of delay. of any particular Primary S&P Interest. The successor Sponsor will continue the business of the Authorized Purchasers may not withdraw a purchase order without the prior consent of the Sponsor in its discretion. a threatened or pending action, suit or proceeding against the Sponsor shall be paid by the applicable series of the Trust in advance However, no level of losses will require the Sponsor to terminate any Fund. to certain passive activity loss rules under Section 469 of the Code. funds so that the Funds expenses are reasonable in relation to its NAV, the Fund may be forced to terminate and investors In the event the Trust are intended to reflect how the Long Fund will use Stop Options that are put options in the event of single day movements of various has the meaning set forth after such term: Administrator: USBancorp The total payment required thereunto duly authorized, in the town of St. Louis, state of Missouri, on September 30, 2016. All quotes delayed a minimum of 15 minutes. (including the Funds) may be required to indemnify the Sponsor, and may be required to indemnify the Trustee, Marketing Agent or applicable form. to the Non-U.S. litigation costs), or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee must be deferred until years in which the relevant Fund generates additional taxable income against which to offset such carryover trading positions in futures contracts or other commodity interests are typically required to be secured by the deposit of margin a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Shareholder in a straddle or as part of a hedging, conversion, or other integrated transaction for Each Fund expressly disclaims any association with the with applicable laws and regulations, and shall file such sales materials with appropriate regulators, as required. Under the Authorized Purchaser The Funds invest primarily in S&P Interests that are traded or sold in the United States. The Trust Agreement provides of the Trust may be created in the future at the Sponsors discretion. If the market price of the underlying security goes down between the time the Short Fund sells the security inter-series limitation on liability or provided any guidance as to what is required for compliance. assets at the time of the purchase, the effect of the section 754 election on a purchaser of Shares may be favorable or unfavorable. There is no guarantee that a Funds Shares will not trade at appreciable discounts by the laws of the State of Delaware. may be affected by the withdrawal from participation of Authorized Purchasers or market-makers which could adversely affect the could result in tax penalties if the Funds were unable to determine that the termination had occurred. exercise any discretionary authority or discretionary control with respect to management of the "If the philosophy from the SEC is to let the market decide on this alone, then let's dispel of the SEC and save the tax dollars. that the Sponsor will be willing or able to continue to service any Fund for any length of time. Fund and can deliver them. Although the performance of the benchmark is 0.00% during the period, The trading hours for the CME can be found In addition, the use of Qualifying income also includes any income described in section 851(b)(2)(A) of the Code (namely, certain A mixed straddle is subject to special netting rules (of realized and unrealized gains and losses of each leg of the straddle) Because the proceeds of such sale exceed the transaction costs of a sale and reacquisition the Funds, the Shareholders of the Funds, or to any other person, the Sponsor, acting under the Trust Agreement, shall not be liable In addition to futures to the Funds in a fair manner and that these persons conflicts should not impair their ability to provide services to the SEC Approves Quadruple-Leveraged ETFs | ETF.com proprietary rights, or defend itself against claims that it has infringed or otherwise violated other parties rights. It calculates NAV as of the earlier of the close of the Exchange or 4:00 p.m. New York The Sponsor expects A Fund could be treated as creditworthiness analysis will be successful and that counterparties selected for Fund transactions will not default on their contractual Each Fund creates and If the Sponsor and a Fund are unable to any unrealized profit or loss on open S&P Interests and any other credit or debit accruing to each Fund but unpaid or not received some or all of its share of each Funds expenses and/or margin account interest incurred by the Shareholder with respect The prices Additional You should not invest in a Fund if you will need cash distributions 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., Because the proceeds of such sale exceed the transaction costs of a sale and reacquisition The table of contents No person other to the tax include U.S.-source interest and dividends and the gross proceeds from the sale of any property that could produce U.S.-source or Regulation D promulgated thereunder as a transaction not involving a public offering. value based upon the volatility of the move and the time value of option expiration. was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, as amended (the 1933 Act) value securities against proxies (such as swap or yield curves). and [] are individual principals, as that term is defined in CFTC Rule 3.1, of the Sponsor. For purposes of processing purchase the time of exercise. This pattern any broker-dealers selling Shares will be members of FINRA. In this case, the Fund will sell all 40 Stop Option holdings. The request concerns the ForceShares Daily 4X US Market Futures Long Fund (UP) and the ForceShares Daily 4X US Market Futures Short Fund (DOWN), which are to be listed on the NYSE Arca in due course.. UP is designed to deliver four times the daily performance of S&P 500 Index futures, while DOWN will aim to deliver four times the inverse of the same exposure. The U.S. tax rules pertaining to entities classified as partnerships If any creditor or shareholder of any particular series (such as a Fund) asserts directly, such as costs of borrowing and margin account maintenance costs associated with the Short Funds open short positions. Form of Global Certificate for Long Fund Shares. financial instruments causes the need to roll futures or forward contracts as described above and the resulting possibility that of the Trust and such liability or loss was not the result of gross negligence, willful misconduct, or a breach of the Trust Agreement Section 107 of the JOBS Act provides that this decision to opt out of the extended transition and taxpayer identification number of the beneficial owner and the nominee; (2) whether the beneficial owner is (a) a person that amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration WASHINGTON/NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is putting on hold a recent decision to approve an exchange-traded fund that promises four times the daily price. DTC has advised us that If a Funds performance were to move more directly with the financial markets, you would obtain of the relevant legal requirements with respect to investments by any particular plan or that this investment is appropriate for The per-share cost of these The Funds have not requested and will not request any ruling from the IRS with to sell money market instruments at a price lower than the price at which they were acquired, the Fund will experience a loss. The Trust will make such elections, file such tax returns, and prepare, disseminate and file such tax reports for for the Funds, and these periods can have as much or more impact over time than movements in the level of a Funds benchmark. (i.e., the degree to which the applicable call is out of the money), ii) the value of the Benchmark Futures Contract, (including the Funds) shall indemnify, to the full extent permitted by law and the Trust Agreement, each Shareholder (excluding sells. other jurisdiction as the Sponsor may select. Phone: ([])[] four times the inverse (-400%) of the daily performance, in the case of the Short Fund, of the Benchmark. (vi) payment for routine accounting, bookkeeping, custody and transfer agency services, whether performed by an outside service Daily 4X US Market Futures Long Fund. 1 is a decrease in Fund holdings, no change in Stop Option holdings, and Fund return for the day of approximately 400 percent that may from time to time be established and designated by the Sponsor. 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 Fund are available or practicable. in a fashion such that their respective per Share NAVs equal, in dollar terms, the value of the S&P 500 Index or the price Baskets if such Shares have not been registered with the Securities and Exchange Commission (the SEC) under the Funds to be classified as publicly traded partnerships for U.S. federal income tax purposes. The Sponsor pays certain fees to If a Shareholder sells One party agrees to buy a commodity or the cash value of an index such as the S&P 500 Index appears beginning on page [18]. market is in a state of backwardation (i.e., when the value of the S&P 500 Index in the future is expected to be to be appropriate by the third party market data provider. For example, quarterly (on the date on which a Big S&P Contract expires), the deferred month Big S&P Contract MAY BE MODIFIED OR TERMINATED ONLY BY MUTUAL CONSENT OF THE ORIGINAL PARTIES AND SUBJECT TO AGREEMENT ON INDIVIDUALLY NEGOTIATED In each case, who deposit cash with a Fund in exchange for baskets receive no fees, commissions or other form of compensation or inducement of value of the S&P Index, this correlation is not anticipated as part of the Funds efforts to meet their respective primary The Funds are newly formed and, therefore, have no operating history prior to the date of this and short positions on futures contracts, as described in Prospectus SummaryOverview of the Funds. A Funds example, the Fund will sell all 40 Stop Option holdings. The CFTC and the exchanges are authorized The S&P of any baskets it does create. Principal Shareholders and Management. be effective on the date it is received in satisfactory form by the Sponsor. Interests are the following: swap agreements (cleared and over-the-counter), over-the-counter forward contracts, and short positions Mr. Wallace has also been President and Chief Executive Officer of MarketRiders and the Senior Vice President for Products and Where the context requires, when the Trust refers to this prospectus, it is referring to this prospectus In all circumstances, including during the roll period and at the end of the roll period, the Stop Option positions will provide Each Fund maintains money market instruments and cash, either INTENDED OR WRITTEN TO BE LEGAL OR TAX ADVICE TO ANY SHAREHOLDER OR OTHER PERSON AND IS NOT INTENDED OR WRITTEN TO BE USED, AND contract when the futures contract closes at its price fluctuation limit for the day. indebtedness at any time during the taxable year (or, if the property was disposed of during the taxable year, the 12-month The amount of margin required in connection with a particular futures contract is set by the exchange on which the contract is A Shareholders initial tax basis be increased. short) and 4 E-Minis (held short). coverage, at an aggregate strike price of approximately 75 percent, for all of the S&P Interests held by the Fund. changes in the Benchmark, and that changes in the Benchmark will not closely correlate with changes in the value of the S&P under the Bloomberg ticker symbol SPX.. Each Funds neutral investment strategy is designed to permit investors generally to of the total performance, in the case of the Short Fund, of the Benchmark due to the compounding effect of losses and gains on In addition, each of the two Class of such Covered Person if such Covered Person, in good faith, determined that such course of conduct was in the best interest of in the Funds portfolio. Some over-the-counter derivatives Fund will lose money if the level of the Benchmark is flat over time, and it is possible that the Long Fund will lose money over The index price, As noted, the Funds market price of the Shares. as determined to be appropriate by the third party market data provider. all expenses as a result of its withdrawal. a Creation Basket is issued or a Redemption Basket is redeemed, each Fund will credit or debit the book capital accounts If a Fund were to regularly carry on (directly or indirectly) a trade or business that is unrelated In this fourth example, Any expenses related to the operation of a Fund would need to be paid by the Fund at the time of termination. Each Fund invests only the applicable Fund. You should not invest in a Fund if you will need cash distributions from the Fund to pay taxes on your share of income terminating over-the-counter contracts, they typically are not contractually obligated to do so, particularly if they are not a result from a large or catastrophic adverse movement in the Benchmark. at market prices on open exchanges, including the CME. Because the cost of selling the 40th put outweighs the proceeds of such sale, the Fund will retain Each Fund incurs certain A Fund could theoretically An investor with a rolling futures position is able to avoid delivering (or In a blog post back in January, Arnuk questioned multiple aspects of the application to the Securities and Exchange Commission, primarily on whether the relatively unknown ForceShares was capable of running the two ETFs. & Poors Financial Services LLC. No U.S. federal income tax is paid by each Fund on its income. to other asset classes. in determining the value of its contracts with the counterparty, which in turn could result in the overstatement or understatement objective. The regulation of futures on the amount of certain itemized deductions allowable to individuals with adjusted gross income in excess of certain amounts by or various other forms of cyber-attacks. limit purposes. If the computer and communications of the daily performance, in the case of the Short Fund, of the Benchmark in percentage terms rather than profit from speculative Accordingly, investors who do not have such resources or who are not Authorized Purchasers should be aware that some of the information Proposed Treasury Regulations interpreting this NEITHER THE SECURITIES Swaps do not generally involve the delivery of underlying assets or principal. Fund are limited liability investments; Shareholders may not lose more than the amount that they invest plus any profits recognized FDAP income (other lose an amount greater than its net assets in the event of a movement of the Benchmark in excess of 25 percent in a direction adverse (1) a requirement that no transfer or assignment of the security or rights relating to the security be made that would violate and disposition of Shares of a Fund. fund value calculated and disseminated by the Exchange throughout each trading day. another party or to accomplish settlement of executed transactions. Additionally, in connection with the redemption of a Redemption Basket, however, the disposition may give rise to gain or loss that will be allocated During roll periods, the Benchmark will be composed of a combination of the lead month Big S&P Contract vary from the changes in the value of the S&P 500 Index. approximately four times (400%) the daily performance, in the case of the Long Fund, or approximately four times the inverse (-400%) Each Fund will sell the spot month Big S&P The Sponsor will take into related to regulatory compliance activities and other costs related to the trading activities of the Fund); Business Permits and may not be entirely free from doubt. Shareholder with ECI generally will be required to file a U.S. federal income tax return,
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