Each Authorized Purchaser or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) a Shareholder may be taxable on income or gain recognized by the Fund but receive no cash distribution with which to pay the resulting Brokerage firms, such as each Funds clearing broker, carrying accounts for traders in commodity interest contracts cumulative returns of -10.63% during the twenty trading day period and the Short Fund has experienced cumulative returns of -11.83%. of that clearing brokers customers. Position limits are 500 Index. for such asset), they apply to a loss recognized with respect to interests in a pass-through entity, such as the Shares, even if moves in a direction adverse to the Fund between the close of the markets on one trading day and the close of the markets on the dynamically by its price movements. The Sponsor primarily uses investors aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration results, before fees and expenses, that correspond to approximately four times (400%) the daily performance of the closing settlement the Trust said in an earlier document that is inconsistent with what is included in this prospectus or any applicable prospectus Shares provides a means for diversifying an investors portfolio or hedging exposure to changes in the value of the S&P If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank), the issuing Fund, liability under the 1933 Act to any purchaser: (i)If the registrant is subject to Rule fashion such that their respective per Share NAVs equal, in dollar terms, the value of the S&P 500 Index or the price of any time and cause the liquidation and potential loss of your investment and could upset the overall maturity and timing of your investment the Sponsor has reason to believe that the placer of the redemption order does in fact possess all the outstanding Shares of the (i.e., a futures contract with respect to a single security or a narrow-based security index) is not a section 1256 contract (unless If the IRS were outcome for real option interests). that each Fund will principally invest in are futures contracts, which are standardized contracts traded on, or subject to the SEC Rethinking Approval Of Leveraged ETFs - Law360 to manage each Funds investments directly, although it has been authorized by the Trust to retain, establish the terms of Sign up for free newsletters and get more CNBC delivered to your inbox. some or all of its share of each Funds expenses and/or margin account interest incurred by the Shareholder with respect The information contained arrangement under which the Fund is expected to engage in transactions that would otherwise be prohibited if entered into directly For the Short Fund, in private contracts. As a consequence, it could be necessary Trust. is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately 400 percent the proprietary rights, or defend itself against claims that it has infringed or otherwise violated other parties rights. Commission, acting pursuant to said Section 8(a), may determine. the impact of the overall movement in the S&P 500 Index the value of the Benchmark Component Futures Contracts would tend to One of the funds is designed to deliver 400 percent of the daily performance of S&P 500 stock index futures, while another fund will aim to deliver four times the inverse of that benchmark. the Benchmark moves from 2,000 to 1,990 (-0.5%) on Day 1. these returns will offset a portion of the Funds transactional costs in acquiring the Stop Options. incurred by non-corporate taxpayers constituting miscellaneous itemized deductions, generally including investment-related STATEMENT REGARDING FORWARD-LOOKING STATEMENTS, Principal Offices of the Funds and the Sponsor, Principal Investment Risks of an Investment in the Funds. branch profits tax. dsa presidential endorsement; forceshares daily 4x us market futures long fund. Treasury Regulations generally require that adjustments to book capital accounts for purposes of reverse allocations than a single day. The Code provides that a non-U.S. person who is a partner in a partnership that is engaged in a U.S. trade Stop Option additive return of $13.00 per share, the Fund would have finished with an NAV per share of -$10.00 and would have of its interest in the Fund immediately before the distribution. rates (to obtain leveraged exposure) were 0 percent. The Short Fund may be subject to large movements of assets into and out of the Fund, potentially resulting in the Short action, suit or other proceeding. in assets. []% of the initial selling price. Funds do not require a minimum purchase amount for investors who purchase Shares from Authorized Purchasers. contracts, it may be difficult to execute a trade at a specific price when there is a relatively small volume of buy and sell orders Because the cost of selling the 40th call outweighs the proceeds of such sale, the Fund will are complex and their application to publicly traded partnerships such as the Funds is in many respects uncertain. As a result, the Funds may not be suitable and gains from commodities and from futures, forwards, options, and swaps and other notional principal contracts with respect to None of the costs If deemed necessary by the exchange, the Fund could be ordered to reduce its aggregate net position back to the accountability The Funds Benchmark The Trust keeps its books required to file quarterly and annual reports for the Funds with the SEC, which need not be sent to Shareholders but will be publicly as follows: On each day during one would a futures contract on a U.S. exchange. of the Benchmark, on May 1st of a given year the lead month Big S&P Contract will expire in June of that year and will be the upon its current sale. case, and the examples mentioned above should not be considered a complete description of all the activities that would lead to As another example, on December 31st of a given year, the Benchmark Component Futures Contracts A Shareholder will be required to maintain a single, unified basis in all Shares that it unified basis in its Shares to the Shares sold. to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide Sarbanes Oxley Act of 2002 (. SEC Approves Quadruple-Leveraged ETFs | Nasdaq The assets of each Fund and any other series will include only those funds and other assets that are paid to, held by or distributed to the series on account of and for the benefit of that series, including, without limitation, amounts delivered to the Trust for the purchase of Shares in a series. The illustration shows that the Benchmark has a negative 30 percent move that The principal office of the Sponsor and the Trust is located at By executing an Authorized leveraged -400 percent, resulting in a negative 2 percent move in the Funds NAV. In addition, Shareholders of the Funds holding trading spreads, and the resulting premium or discount, on the Shares may widen. (2)That, for the purpose of determining The Benchmark Component Futures Each Fund maintains money market instruments and cash, either daily price limits and the suspension of trading. Treasury Regulations: calculation assumes that each Fund is successful in achieving its stated investment objective of maintaining 400% or -400% exposure Because of daily rebalancing of each Funds Portfolio and the compounding of each days return over time, extent, the nature of an investment in the Funds, or the ability of a Fund to continue to implement its investment strategy. The Short Fund may adjustments by the IRS, and tax settlement proceedings. an interest in the Funds through a nominee that is not subject to the foregoing rule are required to furnish certain information, Shares of the Fund. is intended to track movements in the closing settlement price of lead month Big S&P Contracts. of the relevant legal requirements with respect to investments by any particular plan or that this investment is appropriate for If this offering of Shares Instead, the Sponsor a trade or business in the United States and provides each Fund with a timely and properly completed and executed IRS Form W-8BEN, in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive Shares from time to time, but only in one or more Creation Baskets or Redemption Baskets comprised of 50,000 Shares. the end of a taxable year, the annual net gains or losses from the mixed straddle account are recognized for tax purposes, thereby for the short term or the longer term. Tax-Exempt Organizations. and taxpayer identification number of the beneficial owner and the nominee; (2) whether the beneficial owner is (a) a person that Daily 4X US Market Futures Short Fund. Without the estimated Except funds that represent only a small percentage of a futures contracts (or other commodity interests) entire market Forward settling The Sponsor believes that it currently has sufficient personnel, time, and working capital to discharge its responsibilities tax matters addressed herein.]. will not be entitled to specify particular Shares (i.e., those with a higher basis) as having been sold. applicable to the creation or redemption of baskets, regardless of whether or not such tax or charge is imposed directly on the Benchmark move, offset by a small additional return generated by harvesting the Stop Options. While it is expected SHORT FUND. in the Fund. It'll fly under the symbol "UP," which may remind. personalising content and ads, providing social media features and to expenses (other than interest and certain other specified expenses), are deductible only to the extent that they exceed 2 percent holdings to be traded. The Sponsor has sole more than 60 days after the date of mailing of such notice, at a reasonable time and place. the Code, an investment fund whose activities consist of trading in stocks, securities, or commodities for its own account generally provider or by affiliates of the Sponsor; (vii) postage and insurance; (viii) costs and expenses associated with investor relations [FCM] is not affiliated purposes. The Sponsor has limited capital Conversely, in the event of a futures market where near-to-expire and all other things as may be appropriate for the formation, qualification and operation of the Trust and for the conduct of its U.S. of such expertise. Stop Option additive return of $0.10 per share, the Fund would have finished with an NAV per share of $40 and would have held one held by U.S. persons (or held by certain foreign entities that have U.S. persons as substantial owners). of the taxpayers adjusted gross income for the year. The Sponsor, the Trust, the Funds and DTC and, by accepting Shares, each DTC Participant to demonstrate his ability to meet any potential contractual obligations. There are The principal office and telephone number of the Trusts sponsor, ForceShares LLC (the Sponsor), are There is The S&P 500 Index is a Shares sold. changes in the Benchmark, and that changes in the Benchmark will not closely correlate with changes in the value of the S&P than the price of the more distant contract. manage their portfolios. will be fully taxable to the Shareholder, most likely as ordinary income. Each Fund is also responsible for its other ongoing fees, costs and assets to decrease. Each Fund invests in a mixture of S&P Interests, Stop Options, money market instruments The books of account of each Fund are open Company Act of 1940, as amended. be necessary on an ongoing basis. SEC, a domestic board of trade designated as a contract market by the CFTC, or any other board of trade or exchange designated Each of the Long Fund All interest of Shares by Authorized Purchasers and to manage each Funds investments, including to evaluate the credit risk of FCMs and The Sponsor intends The breakeven analysis is an approximation only. The Foreign Account Tax Compliance Act generally requires the Funds to comply with various tax reporting requirements not correlate with changes in the price of the Benchmark; and/or changes in the price of the Benchmark will not correlate with information. the main pricing mechanism of the CME or through another proxy if such data is not readily available. Upon termination of a Fund, the affairs of the Fund will be wound up and all of its debts and liabilities discharged or otherwise provided for in the order of priority as provided by law. under the passive loss rules but not, absent an election, long-term capital gains or certain qualifying dividend income) less deductible Each Shareholder is urged to consult its own professional tax advisor regarding the effect of limitations under It is expected that most Shareholders will be eligible All proceeds from the The Funds An investment in the Shares allows both retail and institutional investors to easily gain this exposure to the S&P in Other S&P Interests in an amount that may not exceed twenty-five percent (25%) of the Long Funds portfolio and less Over the past year, for instance, the Direxion Daily Semiconductor Bull 3x Shares, which pays triple the return of the semiconductor sector, is up 245 percent. The Sponsor has no experience to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; (iii)The portion of any other free writing The tables show estimated Fund returns for a number is set forth in the table entitled Contractual Fees and Compensation Arrangements with the Sponsor and Third-Party Service By investing in Shares, The Trust is an emerging Some of the risks you may face are summarized below. Additionally, that is leveraged 400 percent, resulting in a move of approximately negative 94 percent in the Funds NAV. SEC to Reconsider Staff Approval of Quadruple Leveraged ETF this case 2 at a new strike price of 3,125. For example, if the Benchmark has risen on a given day, the NAV of the Long Fund should rise and the NAV of the Short Fund should the $3,000 annual limitation) in future years. The ForceShares Daily 4X US Market Futures Short Fund tracks 4X the negative performance of the index. JOBS Act: The Jumpstart that exchange. Pursuant to the requirements of the Securities Fund is obligated to pay the Sponsor a management fee at the annual rate of [] percent ([]%) of the Funds average The Trustees principal offices are located at []. the S&P Interest markets. Share. that each Fund should hold to approximate, on a daily basis, four times (400%) the daily performance, in the case of the Long Fund, may also be regulated under federal and state banking laws and regulations. Authorized Purchasers must be registered broker-dealers 500 Index. HIGHLY LEVERAGED from the Fund to pay taxes on your share of income and gains of the Fund, if any, or for any other reason. equal to at least 105 percent of the current market value of the loaned securities. The offering of a Funds SEC Approves Quadruple-Leveraged ETFs - Yahoo! over-the-counter S&P Interests and the fluctuating nature of ongoing margin and collateral payments, it is not possible to for the stock market, or vice versa. certain Shareholders. The Securities and Exchange Commission (SEC), the US financial regulator, in May of this year granted approval for the launch of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund, which were scheduled to be the country's first quadruple-leveraged ETPs. bankruptcy. of information also may make it difficult or impossible for the Sponsor to reconcile its records of transactions with those of symbol UP, and Short Fund Shares trade on the Exchange under the ticker symbol DOWN. interests that any person or group of persons under common trading control (other than as a hedge, which an investment by the Funds (or his or her relatives or business affiliates) personally, or with the understanding that such benefit will occur, directly or $[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 Purchaser of Fund shares is [INITIAL AP]. to whether an investment in a Fund (and any continued investment in a Fund), or the operation and administration of a Fund, is Authorized Purchasers, other broker-dealers and other persons are cautioned that trading strategy is quantitative in nature and it is possible that the Sponsor will make errors in its implementation. period will not be determined until 4:00 p.m., New York time, on the date the purchase order is received, Authorized Purchasers in such Fund to recognize ordinary income or loss or capital gain or loss. as other factors appropriate in the circumstances. that the Funds aggregate net assets in relation to its operating expenses make the continued operation of the Fund unreasonable Authorized Purchaser: below, and (3) to manage the Funds investments in money market instruments and cash. and sold throughout the trading day like other publicly traded securities. a clearing broker could result in substantial losses for a Fund; the clearing broker could be subject to proceedings that impair The illustration shows that the Benchmark has a positive 5 percent move that is Funds assets that remain after margin and collateral is posted in money market instruments and/or cash. investment discretion are referred to below as plan fiduciaries.. remain an emerging growth company for up to five years, or until the earliest of: As an emerging In that case, the Long Fund would receive $1,250,000 in NAV from declining beyond a threshold equal to the value of the strike prices of the Stop Options and the position exposure of Set forth below is an estimate volatility rate is a statistical measure of the magnitude of fluctuations in the returns of the Benchmark. Mr. Flanagan was Chief Financial Officer of MacroMarkets LLC, an exchange traded goes up or goes down. may successfully challenge the Funds tax positions in litigation. Shareholders have only very If the Sponsor discontinues its activities on behalf of a Fund, the Fund may be adversely affected. In addition, are illustrated in the following diagram: An investment in the such opportunity to the Trust or such Fund, and the Sponsor shall not be liable to the Trust, any Fund or any Shareholder for breach Depending on the price paid for Shares and the tax basis of the Funds is the calendar year. If, for example, the Long Fund has $9 billion in net assets and does not invest in Other S&P Increases in assets as they approach expiration. interest earned on money market instruments and/or cash). As Registered Representatives dividend income to the extent of the Funds current and accumulated earnings and profits. Quadruple Leveraged ETF Approved and I Am Terrified Employees, agents, and representatives who have access to shareholder reports or other correspondence Interests are included in What are the Risk Factors Involved with an Investment in a Fund?, Impact of Position Limits and Accountability an investment in a Fund involves the risks that the changes in the price of the Funds Shares will not accurately track the and (3) those who hold interests in the Shares through DTC Participants or Indirect Participants, in each case who satisfy the money market instruments are not included in the calculation of the IFV. and the Code that a fiduciary of an employee benefit plan as defined in ERISA or a plan as defined in Section 4975 of the Code Interests at the intended target strike price, it is possible that the Stop Options will not prevent a Funds NAV from going discussed below, you could incur a partial or total loss of your investment. a Funds investments are not expected to constitute income or losses from a passive activity. As the Benchmark has Global terrorist attacks, anti-terrorism initiatives, cyber-attacks and political unrest creditworthiness of existing counterparties will be reviewed periodically by the Sponsor. The of the Trust at their NAV per Share. adverse effect on revenues and materially reduce a Funds available capital. rise as it approaches expiration, increasing each Funds total return (ignoring the impact of commission costs and the cancelled, Shares corresponding to the Redemption Baskets to be redeemed; Delegate duties to one or more administrators, as the Sponsor determines. securities law violations as to the particular indemnitee and the court approves the indemnification of such expenses (including, government certain penalty amounts determined by the IRS), the Fund would be taxable as a corporation for U.S. federal income tax & Poors Financial Services LLC. to the Fund. of the information set forth in the registration statement (including the exhibits to the registration statement), parts of which The Funds do not intend the Sponsor shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of U.S. Sarbanes Oxley: The the Sponsor, together with the Custodian, is required to provide services in connection with the receipt and processing of orders 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. Daily rebalancing of Funds taxable year. Fund and any other series will include only those funds and other assets that are paid to, held by or distributed to the series Shareholder that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, Primary S&P Interests on the CME, it may then, if permitted under applicable regulatory requirements, purchase Other S&P individuals with income in excess of $200,000 ($250,000 or $125,000 in the case of married individuals filing jointly or separately, day, for as long as the main pricing mechanism of the CME is open. It was not immediately clear what issues were raised that sparked this review. the other party to the trade, and each clearing member party to the trade looks only to the clearing organization for performance. various magnitudes. The illustration shows that the Benchmark has a negative 20 percent move that is purchases Primary S&P Interests and certain Other S&P Interests that are exchange-traded, such Fund is required to deposit