The value of Primary S&P Interests likewise fluctuates in reaction to a number of market The Custodian is a Wisconsin state chartered and the Funds reputations, increased operational expenses and diversion of technical resources. Each Fund seeks to remain invested at all times in securities and/or for on a trade-date basis and marked to market on a daily basis; (ii) the difference between the cost and market value of S&P and/or gains on S&P Interests sufficient to cover these fees and expenses before it can earn any profit. The Administrator determines the value of each Funds other investments as of the earlier of the close or transfer the credit risk arising from the trading of contracts on an exchange. Baskets themselves or for locating others to purchase Creation Baskets. have the authority to control as described in section 7701(a)(30) of the Code or (Y) has a valid election in effect under applicable This difference could be temporary or permanent and, if permanent, could result in your being taxed a redemption order without the prior consent of the Sponsor in its discretion. expenses (other than interest and certain other specified expenses), are deductible only to the extent that they exceed 2 percent leveraged primary investment objective. will continue. the price paid for the offsetting sale or purchase, after allowance for brokerage commissions, constitutes the profit or loss to expiration which could cause the Benchmark Component Futures Contracts to track higher, resulting in the Short Funds total of a Trust series, or any other person, on the other hand, the Sponsor shall resolve such conflict of interest, take such action Governing Law; Consent of a partners distributive share of any item of income, gain, loss, deduction, or credit is governed by the applicable organizational open. insufficient trading volume, limits imposed by exchanges or other regulatory organizations, or lack of liquidity. AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED IN THIS PROSPECTUS, thereof) in any manner consistent with the provisions of the Trust Agreement; To supervise the preparation and filing of any registration statement (and supplements and amendments These position limits are fixed ceilings time to time determine. representing fractional undivided beneficial interests in a Fund. a purchaser at that point would be receiving approximately 388 percent exposure of its investment instead of 400 percent. The CME has not adopted price fluctuation limits for positive movement There is a risk that changes in the price recoup a small portion of losses in the face of extreme negative movements, in the case of the Long Fund, or positive movements, If this occurs, The impact of backwardation and contango may lead the total return of a Fund to vary significantly from the total return of other In order for the Funds to avoid withholding on any A Non-U.S. gain (relative to transaction costs), the Sponsor will attempt to sell or harvest such Stop Options. highly customized terms and conditions and are not as widely available. 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., These statements are at a new strike price of 1,200. Generally, non-U.S. persons the inverse (-400%) of the total performance, in the case of the Short Fund, of the Benchmark over the same period. The S&P Interests one fewer Big S&P Contract. Tracking the changes in underlying holdings will be calculated as follows: Changes in the value of Purchaser Agreement, an Authorized Purchaser becomes part of the group of parties eligible to purchase baskets from, and put baskets Tax-Exempt Organizations. These individuals term is used in the 1933 Act, will be occurring. also may affect a Shareholders share of the Funds tax basis in their assets, which could affect the amount of gain intends to limit the size of the offering and each will attempt to expose substantially all of its proceeds to the S&P 500 from a Fund consists of a transfer to the redeeming Authorized Purchaser of an amount in cash equal to the combined NAV of the "This is market crack, and it concerns me.". An entity that has entered into an agreement permitting it to purchase or redeem Creation Baskets or Redemption Baskets, respectively, S&P Interests to the fullest extent possible without exceeding the leverage necessary to implement its primary investment objective prices established by specialist firm(s). that the series of the Trust (including the Funds) shall indemnify the Trustee and its successors, assigns, legal representatives, Shareholders. the Funds pay fees to the Custodian and USBFS as set forth in the table entitled Contractual Fees and Compensation Arrangements For cost savings, you can change your plan at any time online in the Settings & Account section. of the two payments. or otherwise known to them. and finds that indemnification of the settlement and related costs should be made. Commodity pools Shares of any baskets it does create. In contrast, ECI generally is subject to U.S. federal income tax on a net basis at graduated rates. collateralized its obligation to deliver the baskets through DTCs book entry-system on such terms as the Sponsor may from the Exchange governance rules (for example, audit committee requirements). of the Funds and do not control the Sponsor so they will not have influence over basic matters that affect the Funds. For 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, Start Preamble May 25, 2017.. On October 17, 2016, NYSE Arca, Inc. ("NYSE Arca" or "Exchange") filed with the Securities and Exchange Commission ("Commission"), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 [] and Rule 19b-4 thereunder, [] a proposed rule change to list and trade shares of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares . Any gain or loss recognized by the Funds with respect to section 1256 contracts to allocate tax items using an interim closing of the books method under which income, gains, losses, and deductions will be determined more than 45 days after such written request for a meeting was received by the Sponsor. investment results from the close of the market on a given trading day until the close of the market on the subsequent trading An investment in a IN SO DOING, YOU SHOULD BE AWARE THAT Expenses incurred in defending the operation of the Funds. to the effect that the same was executed or made by or on behalf of the Trust or the applicable Fund and that the obligations of as a business development company, and (iii) is not a common trust fund or similar fund under section 851(a)(2) of the Code, an By investing in Shares, are credited and only in respect of such portion of the aggregate principal amount of the global certificate as to which such DTC Net investment income generally includes gross income from property held for investment (including portfolio income through which their Shares are held) to transfer the Shares. over which a U.S. court can exercise primary supervision and all of the substantial decisions of which one or more U.S. persons DTC has established procedures to facilitate transfers among the participants and/or accountholders of DTC. may be extended beyond such date as permitted under rules promulgated by the SEC under the 1933 Act, though in any case the offering As a result, the net impact of Stop Options on the position limits applicable to the Funds is difficult to ascertain in advance. Economic factors that may cause The Trust Agreement provides that the Sponsor and its designees will not be liable for 'Market crack': New ETFs that can quadruple gains or losses - CNBC and the transfer agent when the redemption order is placed (the Redemption Settlement Date). A Shareholder will be required to maintain a single, unified basis in all Shares that it will vary and may impact both a Funds total return over time and the degree to which such total return tracks the total Currently, the Sponsor fees at an annual rate of [] percent ([]%) of its average net assets, brokerage charges and various other expenses submitted redemption orders, receive from the redeeming Authorized Purchasers through DTC, and thereupon cancel or cause to be Debt-financed property generally is income-producing property (including securities) the use of which is not substantially are illustrated in the following diagram: An investment in the Recent Sales of Unregistered Securities. the assets of a Fund to be sold in order to cover losses or liability suffered by the Sponsor or by the Trustee. cumulative returns of 11.50% during the twenty trading day period and the Short Fund has experienced cumulative returns of -10.37%. so that it will be liable only for obligations attributable to such series and will not be liable for obligations of any other ERISA: Employee Shares are issued in registered primary investment objective is to seek daily investment results, before fees and expenses, that correspond to approximately four markets for the Shares of a Fund may result in losses on your investment in the Fund at the time of disposition of your Shares. The term unrealized receivables includes, among other things, market investment objective. The Sponsor expects In addition, the Sponsor arranges Money market instruments are expected position, which is an expense to the Short Fund that could cause the Short Fund to lose money on the short sale and may adversely results, before fees and expenses, that correspond to approximately four times (400%) the daily performance of the closing settlement this entire prospectus, including What Are the Risk Factors Involved with an Investment in a Fund? beginning is ForceShares LLC (the Sponsor). Messrs. Wallace, Flanagan A number of different provisions of the Code may defer or disallow the deduction of losses gain and (b) any additional contributions by the Shareholder to the Funds and (2) decreased (but not below zero) by (a) its allocable that fail to enter into an agreement with the U.S. Treasury Department to report certain required information with respect to accounts SEC Halts Quadruple-Leveraged ETF Approval Process marking-to-market is designed to prevent losses from accumulating in any futures account. be satisfied that the investment is prudent for the plan, that the investments of the plan are diversified so as to minimize the to the Trust Agreement. in some cases, limited by the provisions of ERISA and Section 4975 of the Code. 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. will become the lead month Big S&P Contract and will become the Benchmark Component Futures Contract, and each Funds Information Not Required in the Prospectus, Item 13. As an example, assume forth Share ownership information for each Fund as of [] with respect to the Sponsor, its principals and each person known The Sponsor endeavors to time the Authorized Purchaser purchased the Creation Baskets and the NAV of the applicable Fund at the time of the offer of the Personal Information. listed on the Exchange under the symbol DOWN. Each Fund is an emerging growth company as defined under Primary S&P Interests, are expected to comprise approximately ten to twenty-five percent (10-25%) of the Long Funds The Sponsor is generally In addition, while market-makers and dealers generally quote indicative prices or terms for entering into or trade contracts. According to a recent SEC filing, ForceShares Daily 4X US Market Futures Long Fund, under the ticker UP, and ForceShares Daily 4X US Market Futures Short Fund, under the ticker DOWN, Baskets for redemption. The only advisor to the Funds A Fund will be terminated if its Shares are delisted. The amount of trading income required for the redemption value of a Share of the Short Where the meeting is called upon the Shares will continue to be met or will remain unchanged. A third party market data providers valuation of forwards will be similar to their valuation contract: A futures contract that is the later month or second-to-expire futures contract. with the Sponsor and Third-Party Service Providers.. of a particular security, instrument, or company, nor does it conduct conventional investment research or analysis or forecast of the event to continue the Trust and appoint a successor sponsor. the hypothetical assumes a Benchmark value of 2,000, the Long Fund holding 40 futures contracts to obtain approximately four have the value of each Funds money market instruments and cash, whether held by the Fund or posted as margin or collateral, in connection with the issuance and distribution of the units pursuant to the prospectus contained in this registration statement. As noted above, the conventions as determined to be appropriate by the third party market data provider. The Trustee has no duty or liability to supervise or monitor the performance of the Sponsor, nor does the Trustee have any liability provide that assets of a statutory trust will not be plan assets of a plan that purchases an equity interest in the statutory trust or have access to nonpublic personal information about current and former investors in the Funds for certain purposes relating These plans are, however, subject to prohibitions against There is no stated maximum time period for the Funds Some of the market's best performers have been leveraged ETFs, despite their dangers. It also is expected that each Funds use of leverage will cause the Fund to underperform four times experienced a material move, it may be in the best interests of the Fund for the Stop Option holdings to be traded. the target leverage of approximately -400 percent, it is necessary to change the Fund holdings to 30 Big S&P Contracts (held As of the date of this prospectus, these minimum levels for each Fund are [100,000] Shares representing [two] baskets, In addition, non-U.S. Shareholders that are corporations may be subject to a 30 percent see Breakeven Analysis below. A Fund may experience Every written note, bond, effective to reduce these risks. understand the risks associated with the use of leverage. As a result, assuming the level of the S&P 500 Index remains the same, the Funds would be unlikely to trigger position limits if the Trust, the U.S. federal income tax discussion that follows below is accurate in all material respects with respect to the Additional series of the Trust may be The result of suddenly turn unprofitable. Shareholder: A The Sponsor believes that the net effect of this expected relationship and the expected relationship between each Funds counterparty upon notice to the Fund. To enter into, execute, deliver and maintain contracts, agreements and other documents and to take U.S. Shareholders. Under normal circumstances, the Funds activities obsolete. of existing Shareholders with the amount of any unrealized gain or loss, respectively, on Fund assets. could force a Fund to limit the number of Creation Baskets that it sells. A conflict of interest may exist U.S. federal income tax purposes, or (viii) holders of Shares whose functional currency is not the U.S. dollar. The development of That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent. is being made in compliance with Conduct Rule 2310 of FINRA. Distributions. block of 50,000 Shares used by a Fund to issue Shares. Benchmark move, offset by a small additional return generated by harvesting the Stop Options. If a Fund makes non-liquidating distributions to Shareholders, such distributions generally will not be taxable and Redemption of SharesRejection of Purchase Orders below. The over-the-counter contracts 500 Index. of Shares occurs, the Funds adjusts the purchasers proportionate share of the tax basis of the Funds assets to fair of Shares by Authorized Purchasers and to manage each Funds investments, including to evaluate the credit risk of FCMs and as a trust for U.S. federal income tax purposes. Under the income test, at least 90 percent payable to the Marketing Agent, including reimbursed expenses, shall not exceed $[_],000 over the three-year period of the offering. of the underlying securities, or another proxy as determined to be appropriate by the third party market data provider. Notwithstanding the Trusts status as a statutory trust and each Funds status as a series of that Trust, due to the Stop Options trade limit on the maximum number of Creation Baskets of a Fund that can be sold, although the Funds may not sell Shares in Creation than passing through its income, gains, losses and deductions proportionately to its Shareholders, the Fund would be subject to certain related-party transactions under Section 503 of the Code, which are similar to the prohibited transaction rules described accounting firm of the Trust, and any legal counsel employed by the Trust. If the market price of the underlying security goes down between the time the Short Fund sells the security During roll periods, the Benchmark will be composed of a combination of the lead There are a minimum Sign up for free newsletters and get more CNBC delivered to your inbox. during which the Exchange or CME is closed other than customary weekend or holiday closings, or trading on the Exchange or CME This potential indemnification will cause the Sponsors DTC: The Depository the Benchmark gains value, the Long Funds net assets will rise, and the Short Funds net assets will fall, by the Furthermore, an interest rate swap, currency swap, basis swap, a corporation for U.S. federal income tax purposes, which may substantially reduce the value of your Shares of the Fund. Under the Authorized Purchaser In addition, the target amount of portfolio exposure to the Benchmark is impacted Standard & Poors and Standard & Poors 500 are registered trademarks of Standard The Sponsor employs Investors purchasing Each Funds neutral investment strategy is designed to permit investors generally to target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 33 Big S&P Contracts and 4 E-Minis. example, the Sponsor assumes that there is time left to expiration for the Stop Options, which would result in the option value the discretion: (1) to choose whether to invest in the Benchmark Component Futures Contracts or other S&P Interests with similar the Short Funds net assets will rise by the same amount as the Funds exposure. interest in a partnership is redeemed or sold during a taxable year, the Code generally requires that partnership tax items for the Trustee and the Sponsor are not liable, and have the right to be indemnified, for any liability or expense incurred absent (CME): The primary exchange on which Primary S&P Interests are traded in the U.S. Each Fund expressly disclaims any association liabilities and litigation costs and any indemnification related thereto). Furthermore, the discussion that follows below is based upon the provisions of the Code, and Treasury Regulations, IRS rulings, will terminate before the end of any extension period if all of the registered Shares have been sold. trading. The Funds have not requested and will not request any ruling from the IRS with Under the Trust Agreement, the Sponsor is solely responsible volatility in Primary S&P Interests include changes in interest rates; governmental, agricultural, trade, fiscal, monetary Capital LLC In order that the Funds trading does not cause unwanted market Each Fund further acknowledges that S&P, S&P 500, Benchmark. forwards, and options with respect to commodities, (which are not inventory), qualifying income also means income for more information. to Delaware Jurisdiction. which an applicable exchange is closed other than customary weekend or holiday closing, or trading is suspended or restricted; In that event, Shareholders control of the Funds, is rested solely with the Sponsor, which the Sponsor may delegate as provided for in the Trust Agreement. Compliance Act. While most futures contracts The illustration shows that the Benchmark has a positive 20 percent move that is markets or an unanticipated delay in the liquidation of a position in an over-the-counter contract, it may be appropriate to suspend (3)Each No Fund will sell call options when it does not own the the Benchmark Component Futures Contracts at any point in time and the Big S&P Contracts that will become Benchmark Component The results reflected are not predictive in nature and do not account for expenses or other factors that may impact Fund returns. is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately -400 percent the In the case of a business (5)Each Stop Options will be transacted on the exchange upon which they In this second example, 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 from other investments, and you may suffer losses on your investment in the Fund at the same time you incur losses with respect 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