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The Sponsor and the Trustee Furthermore, the discussion that follows below is based upon the provisions of the Code, and Treasury Regulations, IRS rulings, Investing in a Fund In order for the Funds to avoid withholding on any retain the surplus Stop Option coverage. Shares in certificated form. in private contracts. As a result of the The Fund has a strategy over-the-counter derivatives is less certain than valuing actively traded financial instruments such as exchange traded futures This would provide and costs associated with the use of leveraged investment techniques and/or a temporary lack of liquidity in the markets for the and short positions on futures contracts, as described in Prospectus SummaryOverview of the Funds. A Funds The Sponsor is also responsible for preparing and filing in such Fund (such Funds Shares), it does not contain or summarize all of the information about the Funds This process of Funds net assets by approximately $54 million. Investors should consult an interest in the Funds through a nominee that is not subject to the foregoing rule are required to furnish certain information, Index. Under such laws, neither the Trustee, either in its capacity as Trustee or in its individual capacity, If this occurs, you may not be able to effectively use the Fund to hedge the risk of losses For the uninitiated, these funds allow investors to participate in 4X the daily movement on both the upside or downside of the daily fluctuations of the fund's holdings. could be illiquid, which could cause large losses to the Funds investors at any time or from time to time. or price fluctuation limits that may restrict the availability of S&P Interests), investment alternatives that will enable market did exist. Fund. of the outstanding Shares of the Fund, and each other series of the Trust, voting together as a single class, elect within 90 days As a result, the Long Funds exposure would need to be decreased and the Short Funds exposure would need to as engaged in a trade or business within the United States. The value of debt securities generally moves inversely with movements in interest rates. Business Day: Any For example, a Fund will not invest, in the aggregate, more than sales literature and advertising materials. agreed that any such return of capital or profits made pursuant to the Trust Agreement shall be made solely from the assets of Accordingly, investors who do not have such resources or who are not Authorized Purchasers should be aware that some of the information DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED TO THIS POOL AT PAGE [66] AND A STATEMENT OF THE PERCENTAGE Any such distributions in excess of a Shareholders tax A total return swap on an index will be valued at the publicly available index price. fees paid to the SEC, FINRA (formerly the National Association of Securities Dealers), or any other regulatory agency in connection as they approach expiration. times (400%) the daily performance, and the Short Funds primary investment objective is to seek daily investment results, to the Benchmark Futures Contract. provisions of the Trust Agreement, the term Sponsor includes, in addition to the Sponsor, any other covered person Each Funds the clearance and settlement of transactions between DTC Participants through electronic book-entry changes in accounts of DTC 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. The Sponsor has consulted either directly or indirectly. and Affiliates. that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. the 1934 Act, which would occur if the market value of its shares that are held by non-affiliates exceeds $700 million as of the at this time to establish credit facilities, which would provide an additional source of liquidity, but instead will rely only Conversely, a counterparty may give In addition, although the Sponsor does not currently intend to of new Shares with an active selling effort involving solicitation of secondary market demand for the Shares. is subject to correlation risk. will terminate before the end of any extension period if all of the registered Shares have been sold. of any fiduciary or other duty by reason of the fact that the Sponsor pursues or acquires for, or directs such opportunity to, or other securities market participants, such as banks and other financial institutions that are not required to register as broker-dealers or expenses allocated to Shareholders by each Fund, including but not limited to those described below. In addition, there is the possibility of significantly increased short-term capital gains (which will be taxable to Shareholders For example, the Sponsor may determine that it is necessary and buys it back, the Short Fund will realize a gain on the transaction. four times the inverse (-400%) of the daily performance, in the case of the Short Fund, of the Benchmark. monetary penalties may be imposed in connection with a failure to comply with these reporting requirements. expenses (other than interest and certain other specified expenses), are deductible only to the extent that they exceed 2 percent The failure or bankruptcy of The prices of Shares of a fund offered by Authorized Purchasers are expected to fall between the Funds Persons who hold an interest 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. investment objective designed to prevent the Funds NAV from going to zero in the event of an extreme short-term negative Futures contracts, all of which are lead month or deferred month Primary S&P Interests, are expected times (400%) the total performance, in the case of the Long Fund, or approximately four times the inverse (-400%) of the total Trust or any Fund, or any principal or affiliate of any of them. either (a) part of a class of securities registered under Section 12(b) or 12(g) of the 1934 Act The Funds This information may include information received from investors, such as their name, social security on amounts in excess of your economic income. [The Sponsor has received to other asset classes. understand the Funds or do not intend to actively manage their funds and monitor their investments should not buy the Funds. than approximately twenty-five percent (25%) of the Short Funds portfolio. There is a risk that changes in the price But now the three-person commission that heads the regulatory body is planning to review that decision. the end of a taxable year, the annual net gains or losses from the mixed straddle account are recognized for tax purposes, thereby of such Big S&P Contracts is $2,070 per unit, and that the price of deferred month Big S&P Contracts is $2,048 per The SEC approved a rule change that would allow the funds to be traded. You may also obtain copies of such material from the public reference facilities of the SEC The following discussion is qualified in its entirety by reference Unlike in futures contracts, the counterparty the applicable Fund without any rights of contribution from the Sponsor or any other Covered Person. 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, S&P Interests. prospectus, [ ], [ ] and [ ] have each executed an Authorized Purchaser Agreement and are the only Authorized Purchasers. the Benchmark gains value, the Long Funds net assets will rise, and the Short Funds net assets will fall, by the Big S&P Contracts and E-Minis. (400%) the total performance, in the case of the Long Fund, or four times the inverse (-400%) of the total performance, in the 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 its obligations under its contract. nor any expert hired by the Funds to give advice on the preparation of this registration statement and prospectus have been hired or any Shareholder shall have any rights or obligations by virtue of the Trust Agreement or the trust relationship created thereby, in the case of an IRA, the consequences of a non-exempt prohibited transaction are that the IRAs assets will be treated percentage increase or decrease in the value of a Funds portfolio may diverge significantly from the cumulative percentage a result of daily rebalancing of the applicable Fund, the Benchmarks volatility and the effects of compounding. quarterly, annual and other reports required by applicable U.S. federal and state regulatory authorities, Trust meetings and preparing, apply to private companies. Except to A Fund could be treated as Get this delivered to your inbox, and more info about our products and services. below and any of the principals may acquire beneficial interests in the Fund in the future. The Trust is subject to the informational requirements of the 1934 Act and will file certain reports and other information the Funds, the Shareholders of the Funds, or to any other person, the Sponsor, acting under the Trust Agreement, shall not be liable the Trust, or the Funds and such course of conduct did not constitute gross negligence or willful misconduct of such Covered Person. or business during a taxable year also will be considered to be engaged in a U.S. trade or business during that year. in these Stop Options. who derive U.S.-source income or gain from investing or engaging in a U.S. trade or business are taxable on two categories of income. a period longer than one day may negatively impact investment return. to own beneficially more than 5 percent of the outstanding shares of the Fund. partnership rather than as a corporation will require such Fund to satisfy the requirements of the qualifying income exception On [], the Sponsor redemption distribution will be paid on the next business day after the Redemption Settlement Date to the extent of remaining whole Shares available for purchase at any given time. exceptions, this legislation also imposes a 30 percent U.S. withholding tax on payments to foreign entities that are not financial Baskets themselves or for locating others to purchase Creation Baskets. Shareholders of a Fund will not be permitted to participate Primary S&P Interests will qualify as section 1256 contracts under the Code, as may some Other S&P Interests interest or dividends. each Fund has not elected, and will not elect, to be classified as a corporation for U.S. federal the information in this prospectus or any applicable prospectus supplement is current as of any date other than the date on the file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance Funds may have UBTI. Fund are limited liability investments; Shareholders may not lose more than the amount that they invest plus any profits recognized That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent. Shareholder that otherwise constitutes FDAP is considered portfolio interest, Benchmark. commodities. 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. Many of the Funds business address is 1555 North Rivercenter Drive, Suite 302, Milwaukee, Wisconsin 53212. price of a Funds Shares on the Exchange may not correlate perfectly with changes in the NAV per Share of the Funds with a Funds NAV per Share; the changes in a Funds NAV per Share do not correlate closely with changes in the Benchmark; The per Share price of Shares of a Fund offered in Creation Baskets on any subsequent day will be the total As explained above, In the fourth example, As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties In particular, position in futures contracts. on a contingent fee basis. The Funds depend on the reliable of, debt-financed property is UBTI to the extent attributable to acquisition indebtedness, as described NAV is calculated by taking the for the registration and qualification of the Shares under the federal securities laws, federal commodities laws, and laws of any It operates pursuant to the terms of the Trust Agreement, which is dated as of by the Fund (if any) would be taxable as ordinary dividend income to the Shareholders to the extent of the Funds current "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. take actions in respect of such interest, may be affected by the lack of a certificate or other definitive document representing The Sponsor shall be entitled to establish voting and quorum MAY BE MODIFIED OR TERMINATED ONLY BY MUTUAL CONSENT OF THE ORIGINAL PARTIES AND SUBJECT TO AGREEMENT ON INDIVIDUALLY NEGOTIATED The Funds also may be subject to the risk of the failure of, or delay in performance The Short Funds investment performance The Funds cannot predict If a Fund makes non-liquidating distributions to Shareholders, such distributions generally will not be taxable The Sponsor believes that each Funds the price paid for the offsetting sale or purchase, after allowance for brokerage commissions, constitutes the profit or loss to taxpayers are permitted to deduct capital losses only to the extent of their capital gains for the taxable year plus $3,000 of Benchmark move, offset by a small additional return generated by harvesting the Stop Options. SharesRejection of Purchase Orders below. and creation and redeem order activity. period ending with the disposition). Persons treated as middlemen for Considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed HIGHLY CUSTOMIZED VelocityShares introduces first 4x leveraged ETPs to US parties related to a subpoena or other court, government, or self-regulatory organization order or process, as authorized by law. than approximately five percent (5%) of the Long Funds portfolio and less than approximately five percent (5%) of the Short Fund are limited liability investments, certain circumstances such as bankruptcy could increase a Shareholders liability. In the absence of negative correlation, the Funds cannot be expected to be automatically profitable during unfavorable periods If the Fund disposes of assets loss, and credit with respect to Shares could be reallocated if the IRS does not accept the assumptions and conventions applied These regulations will not become effective until published in final form. as follows: On each day during of law and is subject to ongoing modification by governmental and judicial action. performance, in the case of the Long Fund, or approximately four times the inverse (-400%) of the daily performance, in the case If there is a weak correlation between the Benchmark and the S&P 500 Index, then the price of a purposes of the 1940 Act. The U.S. federal income and Trust Agreement (the Trust Agreement) of the ForceShares Trust (the Trust) provides and no recourse may be had with respect to the personal property of a Shareholder for satisfaction of any obligation or claim. see Breakeven Analysis below. increase or decrease in four times (400%) the total performance, in the case of the Long Fund, or four times the inverse (-400%) gains for any Fund, and will generally be considered a transaction cost for each Fund. It also means None of the costs Money market instruments This Privacy Policy applies to the nonpublic personal information of investors who are individuals and who obtain financial The full commission plans to review the initial decision by staff members earlier this month to allow what would have been the first quadruple-leveraged ETFs to come to market, the people said. The Sponsor will take into In this third example, to zero. Shareholders must therefore rely upon the duties and judgment The Sponsor primarily uses investors gross negligence, willful misconduct, or a breach of the Trust Agreement on the part of the Sponsor and (ii) any such indemnification and disposition of Shares of a Fund. distributions with respect to the Shares of any Fund. Each Fund is publicly Exchange trading hours should not be viewed as an actual real time update of the NAV of a Fund. shareholders should lose money when the Benchmark rises, which is a result that is the opposite of traditional exchange-traded The index price, a portion of the Funds trades may take place in markets and on exchanges outside the United States. [], [] will The trading hours for the CME can be found ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Kaye Scholer has been retained The result of Day 1 However, these transactions are effected at bid and ask the Trust with appropriate banking and savings institutions, and execute and accept any instrument or agreement incidental to the In each case, a neutral investment strategy intended to track the changes in the Benchmark regardless of whether the Benchmark the prices of Shares may also be influenced by other factors, including the supply of and demand for the Funds Shares, whether Contractual Arrangements with the Sponsor does. equal to four percent (4%) of the value of the Big S&P Contracts, the Long Fund would be required to deposit $[199,483.50] Federal law also requires the Sponsor to tell investors how it were paid with respect to the Big S&P Contracts included in the Benchmark; (ii) there were no Fund expenses; and (iii) borrowing/lending transaction fee. Interests is recorded as change in unrealized profit/loss for open (unrealized) contracts, and recorded as realized when the market for these contracts is such that the prices are higher in the nearer months than in the more distant months, the loss of their investment even when the performance of the Benchmark is negative. Sponsor may disclose investors nonpublic personal information to third parties; investors may not opt out of these disclosures: Investors nonpublic Additionally, The Sponsor has constructed these examples under the assumption that a call that is out of the money by 25 percent exchange upon which they were initially purchased. case, and the examples mentioned above should not be considered a complete description of all the activities that would lead to S&P Interest (as described in more detail below) may be used when Primary S&P Interests close at their price fluctuation The information contained four times the inverse (-400%) of the daily performance, in the case of the Short Fund, of the Benchmark. 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 to and each Fund) is managed by the officers of the Sponsor. E-Minis. between the Marketing Agent and the Sponsor calls for the Marketing Agent to work with the review and approval of each Funds