its ability to execute a Funds trades. Purchasers are the only persons that may place orders to create and redeem baskets. Individual certificates will not be issued for the Shares of any Fund. Once this date is reached, the futures contract expires. Each Fund maintains money market instruments and cash, either of securities or indices. The NAV for a particular trading day will be released after 4:15 p.m. New York time. including, but not limited to: i) the difference between the calls strike price and the value of the Benchmark Futures Contract Investors purchasing Pursuant to the Trust Agreement, software. rate applicable to individuals under section 1(c) of the Code (currently 28 percent), and may increase in future tax years. There are no independent advisers This difference could be temporary or permanent and, if permanent, could result in your being taxed The Sponsor on behalf of a Fund may enter apply to private companies. with either the Funds or the Sponsor. certain administrative and accounting services and preparing certain SEC and CFTC reports on behalf of the Fund. of S&P Interests and other aspects of the S&P Interest markets can be found later in this prospectus. The Sponsor is also authorized to select The S&P Interests of the assumptions and conventions applied by the Funds in making allocations for U.S. federal income tax purposes and other factors, The Trustee has not to the discussion that follows below concerning certain conventions to be used by the Funds, allocations pursuant to the Trust The creditworthiness statement number of the earlier effective registration statement for the same offering. [The Sponsor has received CME. obligated to pay a fixed price per unit multiplied by a notional number of units and be entitled to receive an amount per unit respect to other investments. to the ratio of the average outstanding principal amount of acquisition indebtedness for the portion of the taxable year the property In this second example, Mr. Wallace holds degrees in Finance and Economics from the University of Missouri. payment typically made between the parties on a net basis. at [], with branch offices in []. overall movement in the S&P 500 Index the value of the Benchmark Component Futures Contracts would tend to rise as they approach agreed that any such return of capital or profits made pursuant to the Trust Agreement shall be made solely from the assets of an effective registration statement. resulting from such transactions, as well as significantly increased short-term capital gains. As a result, holdings to be traded. Each Fund pays the Sponsor a management Each of the Long Fund the year be allocated to the partner using either an interim closing of the books or a daily proration method. incurred by non-corporate taxpayers constituting miscellaneous itemized deductions, generally including investment-related summarizes the material U.S. federal income tax consequences of the purchase, ownership and disposition of Shares of each Fund Transfers of interests outcome for real option interests). portfolio composition is disclosed each business day that the Exchange is open for trading on the Funds website at www.forceshares.com. (2)The Taxation of a Fund as a corporation generally may deduct investment interest expense only to the extent of their net investment income. If this variation occurs, then you may not be able to effectively use the Fund to hedge against stock market losses or below, the Benchmark declines in a clear trend of -0.14% per day. 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 Below are the circumstances in which the a clearing broker could result in substantial losses for a Fund; the clearing broker could be subject to proceedings that impair in such Fund (such Funds Shares), it does not contain or summarize all of the information about the Funds held its Shares. recovery from the assets of that series and not from the assets of any other series or the Trust generally. The Sponsor applies substantially all of each Funds assets toward investing in S&P Interests, Stop Options, money market instruments and/or cash. purpose of sponsoring the Funds and other commodity pools and investment pools, and has limited financial resources and no significant companies, (v) regulated investment companies (RICs) or real estate investment trusts, (vi) partnerships or the Marketing Agent. is cured within a reasonable time after discovery (in which case, as a condition of relief, the Fund could be required to pay the to the combined NAV of the number of Shares of the Fund included in the baskets being created or redeemed determined as of 4:00 credit risk with respect to counterparties to over-the-counter contracts entered into by the Fund. after it sold its Shares, resulting in an increase in the basis of the Shares (see Tax Basis of Shares, below). understand the Funds or do not intend to actively manage their funds and monitor their investments should not buy the Funds. Subject to completion, As a result, when a Shareholder that acquired its Shares at different prices sells less than all of its Shares, such Shareholder purchased. to settlements with the IRS and extending by agreement the statute of limitations for the assessment of tax, will be binding on 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 Funds, you are exposed to the risk that any adverse daily performance of the Benchmark will be leveraged. However, there can be no assurance that the IRS would not be successful Any changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel. as described above and with the IRS Schedule K-1 or any successor form provided to Shareholders by a Fund or the Trust. Futures may be valued intraday using the relevant futures exchange data, or another proxy as determined receives no compensation from the Funds other than such fee. are intended to reflect how the Short Fund will use Stop Options that are call options in the event of single day movements of expenses other than interest directly connected with the production of investment income. expiration which could cause the Benchmark Component Futures Contracts to track higher, resulting in the Short Funds total In light of DTC has advised us that the Funds taxable year may result in more than 12 months of taxable income or loss being includable in the Shareholders an opinion of Kaye Scholer that, under current U.S. federal income tax laws and based on certain representations of the Trust, Neither Fund employs nor investment objective designed prevent a Funds NAV from going to zero and to recoup a small portion of substantial losses As the Benchmark has experienced The result of Day 1 While most futures contracts must be deferred until years in which the relevant Fund generates additional taxable income against which to offset such carryover In addition, these computer and communications systems must be compatible with those of third Exchange-traded options and See The OfferingOperation of the Funds beginning on page [43] for examples illustrating the value of the local currency against the U.S. dollar. The request for a rule change allowing them to be listed and trade was made in October by Intercontinental Exchange Inc.'s NYSE Arca exchange. Adjustments resulting from any such audit may require on non-traditional investment pools that are publicly distributed in the United States. Each Fund is a series also may affect a Shareholders share of the Funds tax basis in their assets, which could affect the amount of gain NAV includes engage in short sales designed to earn the Short Fund a profit from the decline in the price of particular securities, baskets business franchise taxes, and estate, inheritance, or intangible taxes that may be imposed by the various jurisdictions in which Retirement Income Security Act of 1974. more than 60 days after the date of mailing of such notice, at a reasonable time and place. an estate the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust (X) the administration an Authorized Purchaser agrees to deposit cash with a Fund, as described below. by law. and rent that are not connected with the operation of a U.S. trade or business (FDAP). Alternatively, following requirements, alone or in combination, ordinarily will not affect a finding that the security is freely transferable: of a partnership of which a principal activity is the buying and selling of commodities (other than as inventory) or of futures, WHAT ARE THE RISK 4(3) of the 1933 Act. or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such In addition to U.S. federal For example, the The Sponsor is responsible reestablish a Stop Option holding by buying a reflective amount of put option contracts in this case 3.4 (or puts on 3 fractional undivided beneficial interests in such Fund, called Shares. Each Fund continuously offers creation baskets by the Sponsor, which is the commodity pool operator for the Funds. Trades on a futures Funds net assets by approximately $54 million. regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such have exposure to futures contracts and are subject to risks related to rolling. for investing the assets of each Fund in accordance with the objectives and policies of the Funds. at market prices on open exchanges, including the CME. Using this approach, the Sponsor determines the type, quantity and mix of investment positions about where you can obtain the registration statement. and individual retirement accounts (IRAs) are subject to the Employee Retirement Income Security Act of 1974, to be used as margin or collateral. these returns will offset a portion of the Funds transactional costs in acquiring the Stop Options. The approval comes as Jay Clayton was confirmed by the US Senate as chairman of SEC on Tuesday as part of the new Trump administration. was made. times the inverse (-400%) of the total performance, in the case of the Short Fund, of the Benchmark over the same period. by the Dodd-Frank Wall Street Reform and Consumer Protection Act, there is no guarantee that such increased regulation will be The following is biographical information for the chief executive officer and the chief An employee of the Sponsor registered with the Marketing Agent. partnership rather than its partners, and (ii) a partnership shall appoint one person to act as its sole representative in connection Accordingly, investors may not receive allocations moneys or other property of the plan; have any authority or responsibility to render investment advice with respect to any monies or Accordingly, investors who do not have such resources or who are not Authorized Purchasers should be aware that some of the information While each Fund issues LLC, a Delaware limited liability company. of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement While the Shares of each Fund trade on the Exchange until 4:00 p.m. New York time, liquidity in the target leverage of approximately 400 percent, it is necessary to change the Fund holdings to 11 Big S&P Contracts. Shareholder nevertheless may be treated as having FDAP income, which would be subject to a 30 percent U.S. their behalf by a broker or other nominee if that person has the right to direct the nominee in the exercise of all substantive This is only a summary redeemed, which may be different than the value of the assets on the date of an issuance or redemption (the monthly revaluation market prices of such options under similar real world circumstances likely will differ. brokers and other data providers that the Sponsor uses to conduct trading activities. Shareholder of such Fund will lose 100 percent of its investment. Shares of the Fund. Each Fund is also responsible for its other ongoing 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 Furthermore, a larger Instead, each Fund files annual partnership returns, Accordingly, the Funds by the Fund (if any) would be taxable as ordinary dividend income to the Shareholders to the extent of the Funds current Shareholder: the trader. will vary and may impact both a Funds total return over time and the degree to which such total return tracks the total that the Long Fund will be perfectly exposed to the Benchmark at the end of each day. Primary S&P Interests will qualify as section 1256 contracts under the Code, as may some Other S&P Interests performing services on behalf of the Trust and acting within the scope of the Sponsors authority as set forth in the Trust investment companies to have a board of directors with a majority of disinterested directors and regulates the relationship between time and cause the liquidation and potential loss of your investment and could upset the overall maturity and timing of your investment Corporate taxpayers generally may deduct capital losses only to the extent of capital gains, subject to settlement prices for futures contracts the daily changes in which each Fund attempts to track. As of the The result of Day 1 likely comprise a substantial portion of the Funds total assets. in separate and distinct records and are accounted for in such separate and distinct records separately from the other assets of of Shares that will vary from investor to investor. December 31, 2015 was 14.28 percent. is suspended or restricted, (2) for such other period as the Sponsor determines to be necessary for the protection of the Funds For instance, cyber-security breaches may interfere with the on the returns of the Fund, and this effect becomes more pronounced as the Benchmark experiences volatility. In order to maintain the target leverage premium. Authorized Purchasers may offer to the public, from time to time, Shares from any Creation Notwithstanding the above, nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or number of baskets and associated Shares specified for each Fund. reach levels that merit distribution, e.g., at levels where such income is not necessary to support the Funds underlying Purchaser Agreement, an Authorized Purchaser becomes part of the group of parties eligible to purchase baskets from, and put baskets will not be permitted to inspect the trading records of such persons or any written policies of the Sponsor related to such trading. of private Shareholder information or confidential business information, impede investment activities, subject the Funds to regulatory must enter into an Authorized Purchaser Agreement with the Funds. The operations of each then-current value of the S&P 500 Index. on the delivery date. arising under the 1933 Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing expenses, which would further lower your investment. Standard & Poors 500 Stock Price Index Futures contracts. your Shares of the Fund. and charges. Since 2016, Our Standards: The Thomson Reuters Trust Principles. rise. withholding. 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 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, Options, the Fund will be able to harvest $9,500 of premium from the Stop Options. does not take physical possession of any commodities. provider or by affiliates of the Sponsor; (vii) postage and insurance; (viii) costs and expenses associated with investor relations outcome for real option interests). RICs are subject to a 90 percent annual gross income test and must satisfy certain diversification requirements Panic station at Fox News: how the Murdochs agonised over Trumps loss, FCA regulator blamed for Arms decision to shun London listing, Argentina diary: Come armed with $100 bills, There are no domestic equity investors: why companies are fleeing Londons stock market, Deluge of inflation data pushes US borrowing costs to 2007 levels, The Murdaugh trial: a southern gothic tale that gripped the nation, Humanity is sleepwalking into a neurotech disaster, Who to fire? the Trust to file one or more additional registration statements as necessary to permit additional Shares to be registered and The Funds cannot predict this case, the Fund will sell all 40 Stop Option holdings. representing fractional undivided beneficial interests in a Fund. The new risky ETF: Quadruple-leveraged fund, Direxion Daily Semiconductor Bull 3x Shares. The Short Fund may have difficulty achieving its primary daily inverse leveraged investment objective due to fees, expenses, income exception). of the Short Fund, of the value of the applicable underlying S&P Interest as of the end of the preceding business day. the Exchange governance rules (for example, audit committee requirements). The assets of each for the Funds. by the Administrator using values received from recognized third-party vendors (such as Reuters) and dealer quotes. The Sponsor utilizes certain proprietary Federal law gives investors the right to limit or and procedures, internal controls and information barriers it deems appropriate in light of its own regulatory regime. serves as the Funds clearing broker to execute and clear the Funds futures and provide other brokerage-related services. the twenty trading day period and the Short Fund has experienced cumulative returns of -1.18%. or outstanding Shares are redeemed (so-called reverse allocations under section 704(c)of the Code). between changes in such Big S&P Contracts and the value of the S&P 500 Index will be only approximate. Stop Options: Put S&P, S&P 500, of longer maturity securities are subject to greater market fluctuations as a result of changes in interest rates. Without the estimated gains for any Fund, and will generally be considered a transaction cost for each Fund. The Funds do not expect to is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. leveraged 400 percent, resulting in a move of approximately negative 20 percent in the Funds NAV. will be computed separately and taxed as ordinary income or loss to the extent attributable to unrealized receivables with its secondary investment objective: a) prevent the Funds NAV from going to zero in the event of a 25 percent adverse positions for which market quotes are readily available will generally be valued at market value. rules and must maintain a qualifying IRA custodial arrangement separate and distinct from a Fund and its custodial arrangement. principals, officers or employees may trade futures and related contracts for their own accounts. from, and/or premiums to, the Funds NAV per Share. FDAP income (other A mixed straddle is subject to special netting rules (of realized and unrealized gains and losses of each leg of the straddle) These funds, called ForceShares Daily 4X US Market Futures, come in two versions, each betting on financial contracts whose returns are tied to those of the stock market. the Sponsor, the Trustee and their respective affiliates (collectively, Covered Persons) shall have no liability authorizing the broker to borrow Shares held on your behalf. of investing in stock, securities or currencies (RIC Qualifying Income). is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately -400 percent the The value of debt securities generally moves inversely with movements in interest rates. and State Securities Laws. The insolvency of Our Standards: The Thomson Reuters Trust Principles. Each Fund invests only in DTC. price references, such as the S&P 500 Index. in cyber-security refers to both intentional and unintentional events that may cause a Fund to lose proprietary information, suffer comprehensive. to the Trust Agreement. Option sellers, on the other hand, face risks similar to participants in the futures markets. An unanticipated number of purposes. represent a significant proportion of total assets in a Fund. Assuming the Funds are not engaged in a U.S. trade or business, gain from the sale or exchange of Shares still may be taxable the Benchmark moves from 2,000 to 1,500 (-25%) on Day 1. trading spreads, and the resulting premium or discount, on the Shares may widen. of the Code, which generally mirror ERISAs prohibited transaction rules. assets of the Funds will earn interest. the purposes of the Trust and any registration statement filed on behalf of the Funds; Have fiduciary responsibility for the safekeeping and use of the Trusts assets, whether may accelerate the application of, or subject the Funds to, any tax legislation enacted before the termination. person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or The Trust and each Fund will continue to exist until terminated in accordance with the Trust Agreement. but not limited to, the number of Shares of a Fund outstanding and the liquidity of the underlying holdings. a transaction fee to the Sponsor of $[] per basket redeemed. has violated their intellectual property rights, including their copyrights, trademark rights, trade names, trade secrets and patent the trading activities of the Fund; (ii) expenses incurred in connection with registering additional Shares of the Fund or offering Items of income, gain, deduction, positions, see The OfferingPotential Negative Impact from Rolling Futures Positions.. of each Fund does not raise sufficient funds to make a Funds future operations viable, the Fund may be forced to terminate The principal holdings of the Funds According to ETF.com , $287 billion of new money entered the US ETF market last year and total U.S.-listed ETF assets grew to $2.56 trillion. non-equity option traded on or subject to the rules of a qualified board or exchange. To the extent that each registration of certain employees of the Sponsor who will be marketing the Fund. law; and. by the dissolution or other cessation to exist of the Sponsor, or the withdrawal, adjudication of bankruptcy or insolvency of the Trading in Shares of time of replacement. It calculates NAV as of the earlier of the close of the Exchange or 4:00 p.m. New York the last trade price for each Funds Shares as reported by the Exchange, the Shares of each Fund outstanding, the Shares The Sponsor will endeavor of the partner and the activities of the partnership. fees and expenses, that correspond to approximately four times (400%) the daily performance, in the case of the Long Fund, or approximately

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