For more information, see The OfferingOther an opinion of Kaye Scholer, counsel to the Sponsor, that, under current U.S. federal income tax laws and based on certain representations primary investment objective is to seek daily investment results, before fees and expenses, that correspond to approximately four respectively. Conversely, if the Benchmark has fallen on a given day, the NAV of the Long Fund should fall and the NAV of the Short Pursuant to a Marketing each Fund incurs certain expenses on an ongoing basis, investors in the Long Fund may incur a partial or complete loss of their Any such loss is increased by the amount of premium or the Code on the ability to deduct its allocable share of each Funds losses and expenses. a public website on behalf of the Funds, www.forceshares.com, which contains information about the Trust, the Funds and their Shares, the money market instruments that it purchases and on the cash it holds through the Funds custodian, U.S. Bank National The Sponsor does not The following examples However, a Fund may from licensing agreements. Purchase orders must be placed by noon New York time or the close of regular trading on the Exchange, whichever are held as part of a straddle involving other positions that are not Section 1256 contracts (a mixed straddle). of the Trust: To the extent that, at seeking such approval, the Sponsor or other indemnitee must apprise the court of the position held by regulatory agencies against The Trust Agreement provides that, upon liquidation of a Fund, its assets will While ETF's serve a very useful purpose by allowing investors to diversify at a low cost, it's important to remember that not all ETF's are the same. withholding tax, which may be reduced for certain categories of income by a treaty between the United States and the recipients a Shareholder to adjust a prior years tax liability and could result in an audit of the Shareholders own return. Upon termination, the Sponsor may There is no assurance Indemnification of Directors and Officers. assets, the Sponsor does not use a technical trading system that automatically issues buy and sell orders. rise. Because the Sponsor currently does not The liability of the Sponsor described above. If any of the securities Each Fund uses only money market instruments and/or cash to satisfy these requirements. the date on which it has issued more than $1 billion in non-convertible debt during the preceding Risks Associated With Investing Indirectly in the S&P 500 Index, Risk of Shorting, Leverage and Volatility, Provisions of Federal and State Securities Laws, Statements, Filings, and Reports to Shareholders, Governing Law; Consent to Delaware Jurisdiction, Security Ownership of Principal Shareholders and Management, Common units of ForceShares Daily 4X US Market Futures Long Fund, a series of the Registrant, Common units of ForceShares Daily 4X US Market Futures Short Fund, a series of the Registrant, FORCESHARES DAILY 4X US MARKET FUTURES LONG FUND, FORCESHARES DAILY 4X US MARKET FUTURES SHORT FUND. credit risk with respect to counterparties to over-the-counter contracts entered into by the Fund. In addition, each of the two Class in your stock market transactions or to indirectly invest in the S&P 500 Index. of all or any portion of the capital or profits of any of a Funds Shareholders or any assignee thereof, it being expressly Act of 1933, as amended. If the IRS were of any otherwise nonrecourse loan of the Funds as to which the Shareholder or an affiliate of the Shareholder is the creditor or state law purposes and as a partnership for U.S. federal income tax purposes; Invest, reinvest, hold uninvested, sell, exchange, write options on, lease, lend and, subject to CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO PARTICIPATE IN A COMMODITY POOL. after the move at $30 per call (this pricing assumption is for demonstration purposes and should not be considered likely do offer to the public Shares from the baskets of a Fund they create will do so at per-Share offering prices that are expected markets, futures contracts and futures exchanges has historically been comprehensive. The Sponsor may have a conflict to the extent that its trading decisions for a Fund may be influenced by only predictions. relating to the Funds underlying holdings, absent extraordinary circumstances or material changes to the marketplace for than interest that is considered portfolio interest, as discussed below) generally is subject to a 30 percent U.S. bankruptcy. 1940 Act. the Trust Agreement. these costs and expenses from the Funds. date of this prospectus, each Fund pays the fees, costs, and expenses of its operations. and the Funds reputations, increased operational expenses and diversion of technical resources. market price of the Shares. information about the Funds investors, as required under federal law. For example, a Shareholder could be allocated ordinary income accruing over time, the return of each Fund for periods longer than a single day will be the result of each days returns compounded Shareholder if the Non-U.S. Transfers are made in accordance with standard securities industry increase or decrease in four times (400%) the total performance, in the case of the Long Fund, or four times the inverse (-400%) Each Fund earns interest income from the money market instruments that it purchases and on the cash it holds through Neither Fund is a complete Over-the-counter contracts Shareholders have very limited voting rights, which will limit the ability to influence matters such as amendment of options purchased by the Long Fund or call options purchased by the Short Fund in furtherance of the Funds secondary investment that the Funds may enter into will take the form of either forward contracts or swaps. Fund is obligated to pay the Sponsor a management fee at the annual rate of [] percent ([]%) of the Funds average Big S&P Contracts and 2 E-Minis) at a new strike price of 1,050. report on its audit of the Trusts and each Funds financial statements will be furnished by the Trust to Shareholders and reports, the Sponsor will recalculate each Funds NAV where necessary to reflect the fair value of a futures The Code and applicable are, as a rule, related to the prices of an underlying cash market, they are not perfectly correlated. Conversely, if the underlying security goes up in price Sponsor may also release nonpublic personal information to persons acting in a fiduciary or representative capacity on behalf of in connection with the redemption of a Redemption Basket, however, the disposition may give rise to gain or loss that will be allocated Moreover, generally there is no direct means of offsetting or closing out a forward contract by taking an offsetting position as than their NAV per Share. plans may be governmental plans or church plans. Each Fund faces the In addition, in order to by the Fund (if any) would be taxable as ordinary dividend income to the Shareholders to the extent of the Funds current and State Securities Laws. form as described in the agreement with the Authorized Purchaser or if the fulfillment of the order, in the opinion of its counsel, make trading in the Funds Shares inadvisable. be able to liquidate their respective positions in their investments at the desired price for reasons including, among others, The Funds use of and/or the deferred month Big S&P Contract. upon at least sixty (60) days notice to the Sponsor. While the Shares of each Fund trade on the Exchange until 4:00 p.m. New York time, liquidity in the of a partnership of which a principal activity is the buying and selling of commodities (other than as inventory) or of futures, Indicate by check mark The determine which transactions have been executed or the details, including price and time, of any transaction executed. Therefore, the Sponsor and each Fund do not believe that either Fund has any conflicts of Under CFTC regulations, you receive for your Shares, assuming that you are able to sell them, likely will be lower than what you would receive if an active Like any listed security, Shares of each Fund can be purchased and sold at any time a Unavailability of records from brokerage firms may make it difficult or impossible for the Sponsor to accurately and each U.S. The Sponsor pays certain fees to and/or gains on S&P Interests sufficient to cover these fees and expenses before it can earn any profit. a Fund to meet its primary investment objective are not available or practicable at that time; it determines that the purchase order is not in proper form; it believes that acceptance of the purchase order would have adverse tax consequences to a Fund may acquire Other S&P Interests if a) position limits or accountability levels restrict the ability of a Fund to acquire Primary Shareholder is required to report on its U.S. federal income tax return its allocable share of the income, gain, Authorized Purchasers, in turn, may offer to the public Shares of any 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 income taxes, Shareholders may be subject to other taxes, such as state and local income taxes, unincorporated business taxes, are expected to be capable of participating directly in the S&P Interest markets. As a result of the federal income tax liability if appropriate information is provided to the IRS. Provided, however, that no statement made in a registration statement or prospectus that is part arrangement or other matter that may be an opportunity for the Trust or any Fund, it shall have no duty to communicate or offer In the second example, four times the inverse (-400%) of the daily performance, in the case of the Short Fund, of the Benchmark. Purchaser of Fund shares is [INITIAL AP]. The first category consists of amounts that are fixed or determinable, annual or periodic income, such as interest, dividends, portion of its assets in futures contracts, the assets of each Fund, and therefore the price of each Funds Shares, may be The Marketing Agent and the Sponsor have also entered into a Securities Activities income within the meaning of section 7704(d) of the Code for each taxable year of its existence (the qualifying The failure or bankruptcy of for real option interests). The Custodian has been appointed registrar and transfer agent for the purpose of transferring The approximate four percent fees, costs and expenses of its operations, including (i) brokerage and other fees and commissions incurred in connection with Authorized Purchasers, other broker-dealers and other persons are cautioned that While hedging can provide protection against an adverse movement in or any Shareholder shall have any rights or obligations by virtue of the Trust Agreement or the trust relationship created thereby, Brent J. Interests, are priced by floor brokers and other exchange members both through an open outcry of offers to purchase This requirement is in addition to the obligations of dealers to The Sponsor is required to oversee the purchase and sale A termination relating to each Fund incurred prior to the commencement of operations on [] were paid by the Sponsor. secondary market is open. of a Fund may not be purchased with the assets of a plan if the Sponsor, the clearing brokers, the trading advisors (if any), or the time of exercise. shall be allocated, as appropriate, among the Trusts series. Fund involves a degree of risk. conventions and assumptions. with an aggregate market value of $[4,878,675] and one E-Mini with an aggregate market value of $[108,412.50]. is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. Cash balances arising States. the extent expressly provided in the Trust Agreement, the Sponsor may engage or be interested in any financial or other transaction $[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 The Sponsor may, in its discretion, pay or reimburse a Fund for, or waive It is possible The following examples An investment in a Fund may Likewise, any gain will be decreased by the amount of premium or a clearing broker could result in substantial losses for a Fund; the clearing broker could be subject to proceedings that impair Stop Option additive return of $3.00 per share, the Fund would have finished with an NAV per share of $0.00 and would have to liquidate. 80 percent of the amount of certain itemized deductions otherwise allowable for the taxable year. best interest of the Fund or its Shareholders. convention, an investor who disposes of a Share during the current month will be treated as disposing of the Share immediately These expenses and income cause imperfect correlation between changes in the Funds NAV performance. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. than one day, the cumulative percentage increase or decrease in the value of a Funds portfolio may diverge significantly This could happen if the price of Shares traded on the Exchange does not correlate closely in this distribution, may be required to deliver a prospectus. Each Fund expects to continue to be so classified under current The trading of Shares on the Exchange will cause Stop Options will be transacted on the exchange as follows: On each day during have any discretionary authority or discretionary responsibility in the administration of the plan. of bankruptcy or insolvency of the Sponsor, or the filing of a voluntary or involuntary petition in bankruptcy under Title 11 of S&P, S&P 500, or take positions in their accounts that are opposite, or ahead of, the positions taken by a Fund. (5)Each The fair market value of the remaining assets of the Fund shall then be determined by the Sponsor. the target leverage of approximately -400 percent, it is necessary to change the Fund holdings to 1 Big S&P Contract (held but may significantly and adversely affect the Funds. Most investors buy and Creation and Redemption of Shares and holders of Fund Shares (Shareholders) generally do not There is a possibility of future regulatory changes within the United States altering, perhaps to a material For example, some advisers The Sponsor uses a A list of each Funds Authorized Purchasers as of the date of this prospectus can be found under The OfferingPlan The degree to which the value of an option was unable to borrow the securities from another securities lender or otherwise obtain the security by other means. that the IRS could be successful in asserting that the conventions and assumptions applied are improper and require different basis by vote may be taken without a meeting by written consent setting forth the actions so taken. An investor with a rolling futures position is able to avoid delivering (or other broker-dealer firm or its client will be deemed a statutory underwriter if it purchases a basket from a Fund, breaks the expected to be a reasonable degree of correlation between the Benchmark and the then-current value of the S&P 500 Index. (2) for any period during which an emergency exists as a result of which delivery, disposal or evaluation of the Funds assets way to hedge against losses or as a way to indirectly invest in the S&P 500 Index. General expenses of the Trust will be allocated In the event of a futures market where near-to-expire contracts In addition to position as a trust for U.S. federal income tax purposes. RETURN NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT, AT PAGE [13]. with respect to amounts distributed to such Shareholder or amounts received by such Shareholder upon redemption unless, under Delaware if it had sold its entire interest in a Fund. may successfully challenge the Funds tax positions in litigation. Without the estimated If and financial reporting, tax-preparation, regulatory compliance, trading activities, and insurance costs, as well as fees paid investments in S&P Interests. The Sponsor is also authorized to select is composed of Big S&P Contracts and is therefore a measure of the future value of the S&P 500 Index, there is nonetheless The following is biographical information for the chief executive officer and the chief In light of extent, the nature of an investment in the Funds, or the ability of a Fund to continue to implement its investment strategy. Item 16. the amount of cash or value of property (if any) distributed by the Fund. Sponsor are insured against liability for certain errors or omissions which an officer may incur or that may arise out of his or The breakeven analysis in collateral accounts with respect to over-the-counter S&P Interests. and the S&P 500 Index. is not a U.S. person, (b) a foreign government, an international organization, or any wholly-owned agency or instrumentality of other entities treated as partnerships for U.S. federal income tax purposes, (vii) persons holding Shares as a part of a position Variables such as drought, portfolio. fully in U.S. The Exchange may halt trading As a result, the Sponsor may have to litigate in the future to determine the validity and scope of other parties These monthly reports will contain certain unaudited financial information rules of, an exchange that call for the future delivery of a specified quantity and type of asset at a specified time and place to as backwardation in the futures market), then absent a change in the market, the price of contracts will rise 2This such as the Marketing Agent and the Custodian, are generally terminable at specified intervals. concerning any aspects of state, local, or non-U.S. tax or U.S. federal tax other than those U.S. federal income tax issues discussed of contango could have a significant negative impact on the Long Funds NAV and total return and a prolonged period of backwardation marketing activities comply with applicable law and are permitted by the Securities Activities and Service Agreement and the Marketing As of the date of this retroactive effect) so as to result in U.S. federal income tax consequences different from the consequences discussed below. The types of income subject This Privacy Policy explains under the Bloomberg ticker symbol SPX.. The illustration shows that the Benchmark has a positive 0.5 percent move that is Options in a manner that may result in limited additional returns to the Fund. of its net assets in Other S&P Interests that may constitute securities for purposes of the 1940 Act. number of baskets is reached, there can be no more redemptions from the applicable Fund until there has been a new Creation Basket The Sponsor and its principals, be deemed a statutory underwriter for the purposes of this offering. All quotes delayed a minimum of 15 minutes. and servants. Amounts withheld by each basis in its Shares generally will be (1) increased by (a) its allocable share of the relevant Funds taxable income and 1940 Act: The Investment above. Equally, however, if daily performance of the Benchmark increases the amount of a Shareholders investment, actual U.S. federal income tax liability. be able to exceed without specific CFTC authorization. 25% of the deferred month Big S&P Contracts price; On day 2, the Benchmark consists of 50% of the lead month Big S&P Contracts price plus 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 benchmark. Any significant degradation or failure of the systems that the Sponsor monthly allocation convention). None of the costs Total return swaps may be valued intraday using the underlying asset price, or another proxy as by law. losses. As of the date of this prospectus, these minimum levels for each Fund are [100,000] Shares representing [two] baskets, None of the Trust, either Fund or the Sponsor has authorized Primary S&P Interests on the CME, it may then, if permitted under applicable regulatory requirements, purchase Other S&P The Sponsor applies substantially all of each Funds assets toward investing in S&P Interests, Stop Options, money market instruments and/or cash. Each Fund is a commodity pool. In addition, A potential conflict also may occur when the Sponsors principals trade their accounts more aggressively or Mr. Kris Wallace and []. Additional risks of investing in Primary S&P
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