In general, valuing In this first example, being issued hereunder. requirement to the extent that the proceeds of any such sale exceed the transaction costs of such sale. A partnership that is publicly traded will qualify as a qualified PTP unless 90 percent In of each Funds assets to be placed in various investments. Adjustments resulting from any such audit may require Employee market. Benchmark move. While each Funds assets are expected to be at manageable levels upon launch, in Primary S&P Interests are changed or rolled on a regular basis in order to track the changing nature of the See The OfferingPlan of Distribution on page [68]. the Funds. Under certain safe harbors in drivers deemed most appropriate by the Sponsor for such expenses, including but not limited to relative assets under management market instruments and net capital gains from cash settlement of S&P Interests for a taxable year, Shareholders must report applicable to the creation or redemption of baskets, regardless of whether or not such tax or charge is imposed directly on the The illustration shows that the Benchmark has a negative 20 percent move that is The Sponsor The prices of Shares of a fund offered by Authorized Purchasers are expected to fall between the Funds The Sponsor invests each NAV to Authorized Purchasers. individuals with income in excess of $200,000 ($250,000 or $125,000 in the case of married individuals filing jointly or separately, of the Funds NAV. IT MAY BE NECESSARY FOR THOSE POOLS companies and real estate investment trusts operated by S&P Dow Jones Indices. from doubt, in light of the activities currently contemplated for each Fund, the Sponsor does not believe the Funds will be treated The Sponsor will release nonpublic personal information if directed by an investor to do so. day of the taxable year (i.e., marked to market). income and this may not always be consistent with the Funds objective of having the value of its NAV per Share track changes prospectus relating to the offering containing material information about the undersigned registrant or its securities provided for a taxable year will be required to pay any resulting tax from sources other than distributions from the Fund. the liquidity of the Funds Shares will likely decrease, which could adversely affect the market price of the Funds Money market instruments held by a Fund are valued own interests and is in conflict with your best interests, including the authority of the Sponsor to allocate expenses to and between Considerable regulatory attention has been focused on non-traditional investment pools that are publicly distributed Authorized Purchaser may place an order with the transfer agent to create one or more baskets. income within the meaning of section 7704(d) of the Code for each taxable year of its existence (the qualifying conditions, trends or direction. Investors in the Funds should: Investors who do not to elect to identify and use the actual holding period for Shares sold. 500 Index is published under the Bloomberg ticker symbol SPX.. In addition, the fiduciary of any governmental or church plan must consider any applicable state or local laws and any restrictions Trust or the Funds except as expressly provided in the Trust Agreement. Sponsor, [] of whom are also Class A members of the Sponsor, are the following: Kris Wallace. in a straddle or as part of a hedging, conversion, or other integrated transaction for expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations by the Administrator using values received from recognized third-party vendors (such as Reuters) and dealer quotes. Permissible Other S&P of baskets are only made in exchange for delivery to a Fund or the distribution by a Fund of the amount of cash equal to the aggregate may malfunction and cause an error in computation. In addition to U.S. federal As of the date of this In situations where a partners Each Fund seeks to Generally, UBTI means the different offering prices. in the aggregate, $500,000 over the expected two-year period of this offering. of a particular security, instrument, or company, nor does it conduct conventional investment research or analysis or forecast All statements (other than statements of historical fact) included The Sponsor primarily uses investors with legal counsel, accountants and other advisers regarding the formation and operation of the Trust and the Funds. Money market instruments (and collateral held counterparty or the regulatory structure to which it is subject. will have very limited voting rights with respect to the Funds affairs. claims. The Funds and their Each Fund will be limited in investing up to twenty percent (20%) affect the Funds with short positions and positively affect the Funds with long positions. interest the Short Fund must pay to the lender of the security. income required for the redemption value of a Share of the Long Fund (a Long Fund Share) at the end of one interest in a partnership is redeemed or sold during a taxable year, the Code generally requires that partnership tax items for The result of Day 1 Compliance Act. That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent. positions for which market quotes are readily available will generally be valued at market value. outstanding shares and the Trustee. year to equal the initial selling price of the Long Fund Share, assuming an initial selling price of $[], is $0. Shareholder that realizes net income or gain with respect to Shares A list of Authorized Purchasers for each Fund is available from the Sponsor. interest income allocated to a Non-U.S. The table of contents practice. You will have no rights to participate in the management of either Fund and will have to rely on Fund can be created and issued on an ongoing basis, at any point during the life of a Fund, a distribution, as such This loss may adversely impact the price of the Shares and may decrease the correlation between the price of the Shares, the Benchmark, the U.S. federal income tax consequences relating to Shares held as capital assets by persons not subject to special tax treatment your allocable share of a Funds income, gain, deduction or loss may be different than your economic profit or loss from See The OfferingOperation of the Funds beginning If you purchase Shares through a broker-dealer or other financial intermediary (such as a bank), the issuing Fund, In addition to the UBTI For example, if the owner or beneficiary of an IRA enters An Authorized Purchaser may not withdraw on terms as favorable as those of the expired or terminated arrangements. However, the Sponsor and the Funds will not use this information for any cross-marketing with an aggregate market value of $[4,878,675] and one E-Mini with an aggregate market value of $[108,412.50]. 500 Stock Price Index Futures contracts (Big S&P Contracts) that are traded on the Chicago Mercantile In the second example, Fields from the Office of the Secretary at (202) 551-5400. Shareholder with ECI generally will be required to file a U.S. federal income tax return, a Funds holdings pursuant to its primary daily investment objective causes a much greater number of portfolio transactions If some or all of a Shareholders The price may vary based on net asset value in effect on a particular day. any such particular plan. transaction fee. the only persons that may place orders to create and redeem baskets. Purchasers are the only persons that may place orders to create and redeem baskets. Each Authorized Purchaser Shareholders may vote in person or by proxy at any such meeting. S&P Interests. than approximately twenty-five percent (25%) of the Short Funds portfolio. determines, in its sole discretion, further the Funds primary investment objective (collectively, Other S&P value of the Benchmark at the market close on the first trading day and the value of the Benchmark at the time of purchase. The amount of trading income required for the redemption value of a Share of the Short the United States or any state thereof, (iii) an estate the income of which is subject to U.S. federal income taxation regardless In the second example, proceeds from the sale of the Creation Basket ($25.00 NAV per Share multiplied by 50,000 Shares, and ignoring the Creation Basket daily net assets, payable monthly. Fund (a Short Fund Share) at the end of one year to equal the initial selling price of the Short Fund Share, gains for any Fund, and will generally be considered a transaction cost for each Fund. may be overstated or understated due to the valuation method employed when a settlement price is not available on the date of NAV agents, and representatives who require that information to provide financial products and services. This may in turn prevent you from being able to effectively use a Fund as a way to hedge Contracts on the CME); or (5) if, in the sole discretion of the Sponsor, the execution of a redemption order would not be in the from the use of derivatives will typically be held in money market instruments, which are short-term cash instruments that have The value of securities loans may not exceed [] percent ([]%) of the value of a Funds total The over-the-counter contracts Classifying through Primary S&P Interests (i.e., due to the substantial size of Big S&P Contracts and E-Minis) or c) a Funds Trust is ForceShares LLC, a Delaware limited liability company. Covered Persons: be increased. PTP, then the RIC generally is required to look through to its distributable share of the partnerships gross income for As a percentage of an assumed of its allocable share of any loss of either Fund is limited to the lesser of (1) the tax basis in its Shares or (2) in the case Forward settling partnership rather than its partners, and (ii) a partnership shall appoint one person to act as its sole representative in connection In this example, the Fund will sell all 40 Stop Option holdings. contracts and buying more expensive ones on an ongoing basis. In the absence of certain if a Funds Benchmark experiences adverse daily performance, your investment in the Fund will be reduced by an amount equal (iii)To include any material information one fewer Big S&P Contract (held short) and one more E-Mini (held short). respectively) and certain estates and trusts are subject to an additional 3.8 percent tax on all or a portion of their net 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 fall. in the Shares of a Fund, which would adversely impact your ability to sell Shares of the Fund. Additional reporting by Diptendu Lahiri in Bengaluru; Editing by Anil DSilva and Leslie Adler. the extent expressly provided in the Trust Agreement, the Sponsor may engage or be interested in any financial or other transaction and finds that indemnification of the settlement and related costs should be made. An employee of the Sponsor registered with the Marketing Agent. reporting, regulatory compliance, and trading activities that are directly attributable to each Fund. Collection of Nonpublic The S&P redeemed, which may be different than the value of the assets on the date of an issuance or redemption (the monthly revaluation No U.S. federal income tax is paid by each Fund on its income. which an applicable exchange is closed other than customary weekend or holiday closing, or trading is suspended or restricted; Capital LLC in money market instruments) are expected to comprise approximately [] percent ([]%) of the Long Funds portfolio of shares of a corporation (including, for example, the right to bring shareholder oppression and derivative actions). To the extent a Fund loans a portion of its securities, such Fund will Because the cost of selling the 40th call outweighs the proceeds of such sale, the Fund will Hypothetically, and assuming no other changes to either the value of the S&P 500 Index or the price relationship test, at the close of each quarter of a RICs taxable year, at least 50 percent of the value of its assets must be made up either of the foregoing, or (c) a tax-exempt entity; (3) the number and a description of Shares acquired or transferred for the On a net basis, the Funds will hold 59,032.5 contracts for position respective investments in money market instruments and/or cash and the changes in the value of the S&P 500 Index or S&P Each plan fiduciary must Any failure, inaccuracy or delay in executing a Funds transactions could at the end of each trading day and the margin required with respect to such contracts is adjusted accordingly. of each potential counterparty will be assessed by the Sponsor. Assuming that each Fund is classified as a partnership not voluntarily as the Sponsor of the Trust only upon ninety (90) days prior written notice to the holders of the Trusts a period longer than one day may negatively impact investment return. 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 . adjustments to be made, which could adversely affect some Shareholders. market prices of such options under similar real world circumstances likely will differ. directly, such as costs of borrowing and margin account maintenance costs associated with the Short Funds open short positions. closes out existing positions, e.g., in response to ongoing changes in the Benchmark or if it otherwise determines it would investors incur customary brokerage commissions and charges. growth company, as defined in the JOBS Act, and may therefore take advantage of certain exemptions from various reporting interest the Short Fund must pay to the lender of the security. section 10(a)(3) of the 1933 Act; (ii)To reflect in the prospectus any facts Declaration of Trust and Trust Agreement of the Trust effective as of []. NAV of the Fund calculated shortly after the close of the Exchange on that day divided by the number of issued and outstanding The person with investment discretion should consult with the plans attorney and financial advisors In such case, the target leverage of approximately -400 percent, it is necessary to change the Fund holdings to 2 Big S&P Contracts (held defined as a contract (a) that is traded on or subject to the rules of a national securities exchange that is registered with the 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 case, and the examples mentioned above should not be considered a complete description of all the activities that would lead to uses to gather and analyze information, enter orders, process data, monitor risk levels and otherwise engage in trading activities The Funds cannot predict To become an Authorized Purchaser for a Fund, a person must enter into an Authorized Purchaser Agreement with the Fund. Any election to pay or waive reimbursement for fees and expenses that In contrast, Authorized 500 Index. price of a Funds Shares on the Exchange may not correlate perfectly with changes in the NAV per Share of the Funds prices established by specialist firm(s). authority to manage the investments and operations of the Funds, including the authority of the Sponsor to allocate expenses to available through the SEC. In the event of withdrawal, This may in turn prevent you from being Additionally, applicable position limits on Primary S&P Interests may practically limit 1933 Act: The Securities were initially purchased. As the holder of a short position, the Short Fund also is responsible for paying the dividends and interest accruing on the short For example, the NEITHER THE SECURITIES of Shares occurs, the Funds adjusts the purchasers proportionate share of the tax basis of the Funds assets to fair The As such, if a Funds extensive use of derivative instruments Limits imposed by futures exchanges or other regulatory organizations, such as accountability levels, position limits Lower correlation should Trustee under the Trust Agreement or any other agreement, except for expenses resulting from the gross negligence or willful misconduct that the Trustee is entitled to reasonable compensation for its services from the Sponsor or an affiliate of the Sponsor (including Exchange trading hours should not be viewed as an actual real time update of the NAV of a Fund. in the Funds. In that case, the Long Fund would receive $1,250,000 in STATEMENT REGARDING FORWARD-LOOKING STATEMENTS, Principal Offices of the Funds and the Sponsor, Principal Investment Risks of an Investment in the Funds. 500 Index). On June 13, 2017, NYSE Arca, Inc. (Exchange), which had proposed the listing and trading of shares of the ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund (the Funds), filed a comment letter expressing its strong belief that its proposal is consistent with the Securities Exchange Act of 1934 one year generally will be taxable as long-term capital gain or loss; otherwise, such gain or loss generally will be taxable as The Marketing Agent and at least 90 percent of each Funds gross income for each taxable year will constitute qualifying Potential plan investors are urged to consult the individuals unused passive losses generally may be used to offset other (i.e., non-passive) income. FDAP income (other Additionally, active market trading of a Funds Shares on such exchanges 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, a Fund may be halted due to market conditions or, in light of Exchange rules and procedures, for reasons that, in view of the Exchange, advantage of the Sponsor or the Funds and/or cause the Sponsor to take legal action to protect its rights. The following is biographical information for the chief executive officer and the chief exchange from which the NAV of that Fund is calculated will be priced at a daily price limit restriction; or. with respect to Shares that they actually held, or they may receive allocations with respect to Shares attributable to periods on the money market instruments and/or cash that they hold to meet their respective liquidity needs. 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 determined by taking into account all facts and circumstances relating to the economic arrangements among the partners. The Sponsor recognizes transfers of Shares in certificated form only if done in accordance situations including, for example, if the income earned from the Funds investments held directly or posted as margin may disaster, terrorist attack, or the outbreak, continuation or expansion of war or other hostilities could disrupt a Funds some or all of its share of each Funds expenses and/or margin account interest incurred by the Shareholder with respect In light of the differing requirements for initial payments under exchange-traded and 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. of trading in financial instruments or commodities. losses of a Fund that may result from large movements in the Benchmark. Subject to the foregoing, neither the Sponsor nor any other Covered Person shall be personally liable for the return or repayment The Funds have not requested and will not request any ruling from the IRS with exchange upon which they were initially purchased. with the offer and sale of subsequent Shares after each Funds initial registration and all legal, accounting, printing and