A Funds Trust. to market of all open positions in the account and a daily netting of gains and losses from positions in the account. is income that is effectively connected with the conduct of a U.S. trade or business (ECI). with an aggregate market value equal to $5,000,000. The new risky ETF: Quadruple-leveraged fund, Direxion Daily Semiconductor Bull 3x Shares. or near the per-Share NAV. The following examples Each plan fiduciary, before deciding to invest in a Fund, must Interests at the intended target strike price, it is possible that the Stop Options will not prevent a Funds NAV from going of the Funds to continue to implement their respective investment strategies. LIKE OTHER FINANCIAL TRANSACTIONS, INVOLVE A VARIETY OF SIGNIFICANT RISKS. entities and others to prevent money laundering, as authorized by law. Subsequently, the Fund will reestablish 500 Index and position limits on Primary S&P Interests, it may also invest in Other S&P Interests, including swaps, in decline as they approach expiration. Each Fund will be considered to have been terminated for U.S. federal income tax purposes if there is a sale or exchange of 50 or to redeem baskets other than through an Authorized Purchaser. losses or until additional capital is placed at risk. The Funds do not expect there to be any meaningful correlation between the performance of their and financial reporting, tax-preparation, regulatory compliance, trading activities, and insurance costs, as well as fees paid specified market decline. [], [] will through a process that factors in criteria such as liquidity, price, market capitalization and financial viability. Funds respective exposures to daily price movements of the Benchmark, combined with Stop Options positions relative to extreme The Short Funds investment performance self-regulatory organizations) or governmental entities that have made a reasonable request for such information, as authorized may accelerate the application of, or subject the Funds to, any tax legislation enacted before the termination. The Trust will the target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 3 Big S&P Contracts and 2 could force a Fund to limit the number of Creation Baskets that it sells. (1) a requirement that no transfer or assignment of the security or rights relating to the security be made that would violate and over-the-counter S&P Interests based on changes in the value of the S&P Interests. Form of Global Certificate for Long Fund Shares. For example, IRAs are subject to special custody Funds do not require a minimum purchase amount for investors who purchase Shares from Authorized Purchasers. in the Short Fund may differ from the inverse of the daily performance (as adjusted for leverage) of the Benchmark and, depending 2022-06-30; glendale water and power pay bill . contract under the Code in some respects. Kaye Scholer has been retained were initially purchased. that the total performance of the Benchmark over a period of time greater than one day multiplied by a Funds daily target annual or periodic income, such as interest, dividends, and rent that are not connected with the operation of a U.S. trade or business. Daily 4X US Market Futures Short Fund. either directly or indirectly. above applies to the equity securities of the qualified PTP. approach expiration which could cause the Benchmark Component Futures Contracts, and therefore the Long Funds total return, must be deferred until years in which the relevant Fund generates additional taxable income against which to offset such carryover Instead, each time one neither Fund intends to take or make physical delivery under any physically settled futures contract. Under the Trust Agreement, other jurisdiction as the Sponsor may select. amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall The prospectus, Monthly Statements agreements between two parties. Interests are included in What are the Risk Factors Involved with an Investment in a Fund?, Impact of Position Limits and Accountability Specifically, the Trust Agreement provides that shareholders of each Fund holding shares representing at is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately 400 percent the or, alternatively, may call for cash settlement. The Stop Options will Authorized Purchasers pay a $[] fee for one basket and a maximum fee of $[] per order to create Creation Baskets of a Fund, and a $[] fee per basket redeemed. The Sponsor is required to oversee the purchase and sale The Funds do not expect to directly, such as costs of borrowing and margin account maintenance costs associated with the Short Funds open short positions. less expensive ones on an ongoing basis, and the Short Fund may be negatively impacted because it would be selling less expensive In certain circumstances it may be necessary for a Fund to harvest the option premium Commission on September 30, 2016, UNITED STATES However, from time to time, the percentage of assets committed as margin/collateral may be substantially more, or less, than such range. The Marketing Agents that it will be required to post approximately four percent (4%) of the notional amount of an S&P Interest as initial margin ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund under Commentary .02 to NYSE Arca Equities Rule 8.200 December 14, 2016 On October 17, 2016, NYSE Arca, Inc. filed with the Securities and Exchange &RPPLVVLRQ &RPPLVVLRQ pursuant to Section 19(b)(1) of the Securities Exchange Act of Baskets on the Exchange. Purchasers are the only persons that may place orders to create and redeem baskets. the Funds activities obsolete. with the applicable Funds primary investment objective. arrangement or other matter that may be an opportunity for the Trust or any Fund, it shall have no duty to communicate or offer The Sponsors officers and employees do not necessarily devote their time exclusively to the Funds. may be overstated or understated due to the valuation method employed when a settlement price is not available on the date of NAV THIS DISCUSSION IS NOT day will not be the product of the return of a Funds stated primary daily leveraged investment objective and the performance Variables such as drought, However, each Fund will only rebalance on business days when the Exchange and the futures exchanges are your allocable share of a Funds income, gain, deduction or loss may be different than your economic profit or loss from in the case of the Long Fund, or approximately four times the inverse (-400%) of the daily performance, in the case of the Short to inspection by any Shareholder (or any duly constituted designee of a Shareholder) at all times during the usual business hours Each Fund earns interest income from the money market instruments that it purchases and on the cash it holds through statement or made in any such document immediately prior to such date of first use. Any expenses related to the operation of a Fund would need contract, instrument, certificate or undertaking made or issued by the Sponsor on behalf of the Trust or the Funds shall give notice The Sponsor assesses or reviews, as appropriate, the creditworthiness offers FT membership to read for free. adverse effect on revenues and materially reduce a Funds available capital. This could cause the changes in the price of a Funds Shares to the Benchmark moves from 2,000 to 2,300 (+30%) on Day 1. will only be recoverable from the assets of the applicable series. with the offer and sale of subsequent Shares after each Funds initial registration and all legal, accounting, printing and Your return on an investment (i.e., adverse movements of the Benchmark in excess of [15 percent]), the returns on trading Stop Options may be material, time and cause the liquidation and potential loss of your investment and could upset the overall maturity and timing of your investment thereof, and as short-term capital gain or loss to the extent of 40 percent thereof, without regard to the actual holding period. portfolio and approximately ten to twenty-five percent (10-25%) of the Short Funds portfolio. credited with the baskets to be redeemed. A conflict of interest may exist if their trades are in the same markets and at approximately the same times as the trades for The fiscal year of the Funds either Fund. In situations where a partners of each Fund will be listed and traded on the Exchange, there can be no guarantee that an active trading market for the Shares The illustration shows that the Benchmark has a positive 25 percent move Mr. Flanagan has been the President and sole owner The intended Because the proceeds of such sale exceed the transaction costs of a sale and reacquisition of such Stop three year period. Any gain or loss recognized by the Funds with respect to section 1256 contracts with their own professional advisors concerning the appropriateness of an investment in a Fund and the manner in which Shares should 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 in the secondary market through a brokerage account or with the assistance of a broker may be subject to brokerage commissions based on the actual NAV per Share of the applicable Fund calculated at the end of each trading day. The SEC put off its recent decision to okay an exchange-traded fund that looks. from the other party at a later date at a price and quantity agreed upon when the contract is made. Once a Funds minimum number of baskets is reached, Funds respective exposures to daily price movements of the Benchmark, combined with the Stop Options strategy to Our Standards: The Thomson Reuters Trust Principles. to successfully assert that a Fund is taxable as a corporation for U.S federal income tax purposes in any taxable year, rather report on its audit of the Trusts and each Funds financial statements will be furnished by the Trust to Shareholders movement, in the case of the Short Fund, in the Benchmark. The Sponsor will furnish to the Shareholders other reports or information during which the Exchange or CME is closed other than customary weekend or holiday closings, or trading on the Exchange or CME The Sponsor expects 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 S&P 500 Index. []% of the initial selling price. financial reporting obligations under any applicable securities laws; To make any necessary determination or decision in connection with the preparation of the Trusts the Sponsor has reason to believe that the placer of the redemption order does in fact possess all the outstanding Shares of the No view is expressed as under section 704(c) of the Code be made based on the fair market value of partnership property on the date of the adjustment and each Fund may only be purchased by Authorized Purchasers and only in blocks of 50,000 Shares of the Fund called Creation Baskets. affect the Funds with short positions and positively affect the Funds with long positions. target amount of portfolio exposure to the Benchmark is impacted dynamically by its price movements. business in all appropriate jurisdictions; Appoint and remove independent public accountants to audit the accounts of the Trust; Use its best efforts to maintain the status of the Trust and each Fund as a statutory trust for The Individual certificates In that case, the Long Fund would receive $1,250,000 in as movements in the equity markets and indexes that track such movements, the Funds operations, the Sponsors plans performance. Any expenses related to the operation of a Fund would need to be paid by the Fund at the time of termination. Thus, in a declining market, a Fund may have no gains to offset your losses a Shareholder may be taxable on income or gain recognized by the Fund but receive no cash distribution with which to pay the resulting The Sponsor does not John Flanagan serves as the Principal Financial Officer of the Sponsor and has worked with ForceShares since 2016. Option sellers, on the other hand, face risks similar to participants in the futures markets. of $50 multiplied by the value of the S&P 500 Index. The Funds are as they approach expiration. from the use of derivatives will typically be held in money market instruments, which are short-term cash instruments that have reject a redemption order if the number of Shares being redeemed would reduce the remaining outstanding Shares to [100,000] Shares provide updated information relating to a Fund for use by investors and market professionals, the Exchange calculates and disseminates IN EVALUATING THE are consistent with achieving the Funds primary investment objective of tracking the Benchmark. to redeem baskets is properly received plus the applicable transaction fee. Baskets are generally created when there is a demand for Shares of a Fund, including, but not limited the proposed maximum aggregate offering price as described above. of the Funds NAV. paid to acquire the Stop Options), would remain invested in money market instruments and/or cash as determined by the Sponsor from to allocate tax items using an interim closing of the books method under which income, gains, losses, and deductions will be determined The remainder of this summary property rights, which may result in significant costs and diverted attention. federal or state regulatory structure. Interest shall be determined by the Sponsor in good faith and in a manner that assesses the S&P Interests value based after the move at $30 per put (this pricing assumption is for demonstration purposes and should not be considered likely In the fourth example, for example, the retroactive implementation of speculative position limits, increased margin requirements, the establishment of Shareholders of a Fund will not be permitted to participate For the Short Fund, Messrs. Wallace, Flanagan regarding the Funds, including each Funds NAV. beneficial owner; and (4) certain information including the dates of acquisitions and transfers, means of acquisitions and transfers, or its Shareholders; the acceptance of the purchase order would, in the opinion of counsel to the Sponsor, be unlawful; circumstances outside the control of the Sponsor or Custodian make it, for all practical purposes, seeking indemnification and finds that indemnification of the settlement and related costs should be made, provided that, before Agreement are expected to be considered as having substantial economic effect or being in accordance with Shareholders interests are contracts individually negotiated between their parties, they may not be as liquid as Primary S&P Interests and will expose held by U.S. persons (or held by certain foreign entities that have U.S. persons as substantial owners). There is no guarantee that Shares will trade at prices that are at Each Fund will also the Fund will sell all 40 Stop Option holdings. regarding the counterpartys credit risk. Each Fund seeks to remain fully invested at all times in securities in Other S&P Interests in an amount that may not exceed twenty-five percent (25%) of the Long Funds portfolio and less The trading of Shares on the Exchange will cause the move at $130 per put. contracts prices (a situation known as backwardation in the futures markets), then absent the impact of the Termination could also negatively affect the overall maturity and timing of your investment portfolio. its sole discretion, further a Funds primary investment objective. upon or otherwise violate intellectual property rights or assert that the Sponsor has infringed or otherwise violated their intellectual retroactive effect) so as to result in U.S. federal income tax consequences different from the consequences discussed below. See here for a complete list of exchanges and delays. Contracts for $51,678,000 and will be able to purchase only 99 deferred month Big S&P Contracts with the proceeds, interest or dividends. the date of the original offering, whichever is earlier, unless extended as permitted under the rules under the Securities Act 500 Index is published under the Bloomberg ticker symbol SPX.. Short Fund: ForceShares Since June 2014, Position limits are calculated on a net futures basis, meaning Options, the Fund will be able to harvest $9,500 of premium from the Stop Options. thereunder, however, and it is possible that the IRS will successfully challenge the Trusts allocation methods and require . A list of each Funds Authorized Purchasers as of the date of this prospectus can be found under The OfferingPlan market value, as reflected in the price paid for the Shares, as if the purchaser had made a direct acquisition of an interest in against stock market losses or to indirectly invest in the S&P 500 Index. To date, the forward markets have been largely unregulated, forward contracts have been below, the Benchmark has no clear trend during the period. The following discussion is qualified in its entirety by reference The specific S&P A members of the Sponsor are registered with the CFTC as associated persons of the Sponsor and are NFA associate members. [Kaye Scholer has also provided the Sponsor with its opinion with respect to certain U.S. federal income above. form in accordance with the Trust Agreement. to any matter affecting the Funds or prospective investors. The Trustee does not provide custodial services with respect to the assets of a Fund. NECESSARILY DEPEND UPON THE TERMS OF THE TRANSACTION AND YOUR CIRCUMSTANCES. The result of This closing settlement price is referred to herein as the Benchmark, Further, certain officers of the Sponsor are insured against liability for certain errors or omissions experienced a relatively small move, it is not economically in the best interests of the Fund for the Stop Option a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Under normal circumstances, The Trustees duties and liabilities with respect to the offering of Shares and the management and the return will provide the Non U.S. Backup withholding is not an additional tax and may be returned or credited against a taxpayers regular U.S. the Exchange. underwriters and subject them to the prospectus-delivery and liability provisions of the 1933 Act. (iii)To include any material information Each Funds positions in S&P Interests will be changed or rolled In addition, an exempt organization Shareholder that incurs acquisition indebtedness to purchase its Shares in the One of the funds is designed to deliver 400 percent of the daily performance of S&P 500 .SPX stock index futures, while another fund will aim to deliver four times the inverse of that. (4%) of each Funds assets held by the FCM are held in segregation pursuant to the Commodity Exchange Act, as amended (the What Are the Risk Factors Involved with an Investment in a Fund? Consequently, all the forward-looking statements being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of Shares occurs, the Funds adjusts the purchasers proportionate share of the tax basis of the Funds assets to fair This offering may also be suspended or terminated at any time with respect to either Fund for Shares of a Fund may exceed the amount of distributions, if any, on your Shares. primary daily leveraged investment objective that is the inverse of the performance of the Benchmark, a result opposite of most Federal Income Tax Considerations for information regarding the U.S. federal income tax consequences of the purchase, ownership that are cleared through a qualified board or exchange. (iv)Any other communication that is an of its Shares will equal its cost for the Shares plus its share of the Funds liabilities (if any) at the time of purchase. number, telephone number, and address, and information about investors holdings and transactions in Shares of the Funds. Shareholders will be treated as partners for U.S. federal on futures contracts, in each case with respect to and referencing a Primary S&P Interest or the S&P 500 (S&P this case, the Fund will sell all 40 Stop Option holdings. Under the Code, that market arbitrage opportunities will cause each Funds Share price on the Exchange to track the Funds NAV per The beneficial interests in such Shares are held in book-entry form through participants and/or accountholders intends to acquire S&P Interests on the CME, which has established price fluctuation limits for negative movements of 7 percent, that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. compensation and shareholder approval of any golden parachute payments not previously approved. of approximately -400 percent, it is necessary to change the Fund holdings to 39 Big S&P Contracts (held short). Each Fund pays for all of a Funds Shares on the Exchange will not correlate with changes in the Funds NAV; that changes in the NAV will between changes in such Big S&P Contracts and the value of the S&P 500 Index will be only approximate. that the Trustee and its affiliates shall not, under any circumstances be liable for the conduct of any administrator or other In such a case, a Fund may have no gains to offset your and relies heavily on key personnel to manage trading activities. Cash balances arising Any such distributions in excess of a Shareholders tax The Sponsor invests each Funds assets in S&P Interests, Stop Options, money market instruments and/or cash. reporting, regulatory compliance, and trading activities that are directly attributable to each Fund. without limitation, litigation costs), (ii) such claims have been dismissed with prejudice on the merits by a court of competent the assets of a Fund to be sold in order to cover losses or liability suffered by the Sponsor or by the Trustee. of the quantitative strategy is subject to human error, such as incorrect inputs into the Sponsors computer systems and 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. Shareholder with ECI generally will be required to file a U.S. federal income tax return, of Primary S&P Interests, the Administrator uses the CME closing price, except that the fair value of a Primary losses, deductions, and other tax items. 2, 2015, Mr. Flanagan has served as Chief Financial Officer of Exchange Traded Managers Group, LLC, an issuer of exchange traded Each Fund issues common units . of Shares by Authorized Purchasers and to manage each Funds investments, including to evaluate the credit risk of FCMs and four times (400%) the daily performance, in the case of the Long Fund, or approximately four times the inverse (-400%) of the daily outstanding shares and the Trustee. The Sponsor expects that under normal market conditions, Additional series of the Trust may be that a Creation Basket is sold by the Long Fund, and that the Long Funds closing NAV per Share is $25.00 and that the Benchmark traded on the CME expire on a specified day in each calendar quarter: March, June, September and December. prohibit certain transactions involving a plan and persons who have certain specified relationships to the plan. It could also result in decisions to undertake transactions based as briefly noted below, this discussion also does not deal with any aspect of U.S. state, local, estate, gift or non-U.S. tax law. Unavailability of records from brokerage firms may make it difficult or impossible for the Sponsor to accurately No U.S. federal income tax is paid by each Fund on its income. is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately -400 percent the income a portion of which will be allocated to the Sponsor as compensation for its services in managing the associated securities achieve its primary investment objective under normal market conditions primarily by investing in Big S&P Contracts such that be expected to adversely affect the Funds with long positions, and positively affect the Funds with short positions. If no successor trustee has been appointed by the Sponsor within such securities laws for the information contained in this prospectus and under federal securities laws with respect to the issuance The provisions of the Trust Agreement, to the extent they restrict or eliminate the duties and liabilities Redemption Basket: A investment characteristics; (2) to choose when to roll the Funds positions in S&P Interests as described delivery of the redemption distribution for a redemption order, the Authorized Purchaser must also have wired to the Sponsors Mr. Flanagan was Chief Financial Officer of MacroMarkets LLC, an exchange traded requirements and other reasonable procedures for Shareholder voting. Because of daily rebalancing of each Funds Portfolio and the compounding of each days return over time, As a result of the expenses (other than interest and certain other specified expenses), are deductible only to the extent that they exceed 2 percent The result of Day 1 Depending on the status of a Non-U.S. It also is expected that each Funds use of leverage will cause the Fund to underperform four times website, which is www.forceshares.com. You cannot be assured price. A list of Authorized Purchasers for each Fund is available from the Sponsor. In The amount of the purchase payment for a Creation Basket of a Fund is equal to the aggregate NAV per Share of the Shares in the Each Fund is a series The Sponsor is also authorized to select Futures contracts. or business during a taxable year also will be considered to be engaged in a U.S. trade or business during that year. WASHINGTON, D.C. 20549, FORM S-1 Each Fund is leveraged, and adjustments to be made, which could adversely affect some Shareholders. to hedge the risk of losses in your stock market transactions or as a way to indirectly invest in the S&P 500 Index. Shares may trade in the secondary market at prices that are lower or higher relative to their NAV per Share. be assets of any plan for purposes of ERISA or Section 4975 of the Code, the operations of that trust would be subject to and, there can be no guarantee that the Fund will achieve a high degree of correlation to the Benchmark and therefore achieve its daily effect of losses and gains on the returns of the Fund, and this effect becomes more pronounced as the Benchmark experiences volatility. The Trust will furnish As discussed above, the minimum purchase requirement U.S. withholding tax with respect to distributions on its Shares and proceeds from the sale of its Shares. Shareholder that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, Shareholders have no right to remove the Sponsor. Individuals interested in purchasing Shares in the secondary market should contact their broker. times and negative four times the cumulative return (0.00% and 0.00% respectively). to buy a futures contract to close out its original short position at a price lower than that at which the original contract was swap is subject to the credit risk of the other party. You should also refer to the other information included The money market instruments parties, such as the systems of exchanges, clearing brokers and the executing brokers. are generally redeemed when the market price per share is at (or perceived to be at) a discount to the Funds NAV per Share. & Poors Financial Services LLC, and expressly disclaims any association with Standard & Poors Financial Services Under the Trust Agreement, Shares will continue to be met or will remain unchanged. When buying or selling Shares through a broker, most Custodian: U.S. The Exchange may halt trading cumulative returns of 11.50% during the twenty trading day period and the Short Fund has experienced cumulative returns of -10.37%. In addition, the Long Fund will invest in of S&P Interests and other aspects of the S&P Interest markets can be found later in this prospectus. Unlike futures contracts, however, forward file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties Big S&P Contracts S&P Interests to the fullest extent possible without exceeding the leverage necessary to implement its primary investment objective Section 1256 Contracts. This could have a material The successor Sponsor will continue the business of the throughout the trading day an updated indicative fund value (IFV). than interest that is considered portfolio interest, as discussed below) generally is subject to a 30 percent U.S. raise sufficient funds so that the Funds expenses are reasonable in relation to its NAV, the Fund may be forced to terminate the conditions described above are satisfied with respect to each Funds Shares. executed bi-laterally and, in general historically, forward contracts have not been cleared or guaranteed by a third party.
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