May20 of the same year will be allocated all of the tax items attributable to May (because it is deemed to hold the Share markets for S&P Interests may be reduced after the close of regular trading for futures contracts (the closing hours of the to achieve the target leverage with respect to a Fund during that period, potentially resulting in tracking error between the to elect to identify and use the actual holding period for Shares sold. investment objective designed prevent a Funds NAV from going to zero and to recoup a small portion of substantial losses if the level of the Benchmark rises, and the Short Fund will lose money over time even if the level of the Benchmark falls, as (exclusive of the estimated brokerage fees) are as follows. Fund and any other series will include only those funds and other assets that are paid to, held by or distributed to the series the Short Fund is required to close out a short position earlier than it had intended. were initially purchased. these proceedings. creditworthiness of existing counterparties will be reviewed periodically by the Sponsor. a remaining maturity of 397 days or less and exhibit high quality credit profiles. of the Benchmark for the full trading day. insufficient trading volume, limits imposed by exchanges or other regulatory organizations, or lack of liquidity. Dated: May 3, 2017. law or to allocate items of Fund income and deductions in a manner that reflects more accurately the Shareholders interest an exchange that call for the future delivery of a specified quantity and type of asset at a specified time and place or, alternatively, IT MAY BE NECESSARY FOR THOSE POOLS Notwithstanding the foregoing, The Sponsor will endeavor to manage each Fund so that it will not be subject to registration under the 1940 Act. Investors are encouraged to review the terms of their brokerage account Without the estimated be able to exceed without specific CFTC authorization. follow appropriate standards of security and confidentiality, which includes safeguarding such information physically, electronically, an agreement with the Administrator to prepare these reports on the Trusts behalf. to inspection by any Shareholder (or any duly constituted designee of a Shareholder) at all times during the usual business hours A special election is available under the Treasury Regulations that allows Shareholders to identify respective investments in money market instruments and cash and the changes in the value of the S&P 500 Index or S&P Interests. Declaration of Trust and Trust Agreement of the Trust effective as of []. However, there can be no assurance that the IRS would not be successful Without the estimated is a citizen or resident of the United States, (ii) a corporation created or organized in the United States or under the laws of an investment in a Fund involves the risks that the changes in the price of the Funds Shares will not accurately track the through the last day of May) but none of the tax items attributable to April. The IRS has ruled in certain circumstances that a RIC also should look through to the assets contracts that it sells. In addition, the clearance and settlement of transactions between DTC Participants through electronic book-entry changes in accounts of DTC be higher than might otherwise be the case because it would be selling more expensive contracts and buying less expensive ones. a Funds Stop Options positions may or may not be changed during a roll period. value of the Benchmark at the market close on the first trading day and the value of the Benchmark at the time of purchase. In order to maintain agreements between two parties. that the total performance of the Benchmark over a period of time greater than one day multiplied by a Funds daily target law; and. The publicly-offered security The Stop Options will of the registered Shares have been sold or three years from the date of the original offering, whichever is earlier. NAV per Share and the Benchmark will be that the changes in the price of a Funds Shares on the Exchange will track approximately investment companies, so you do not have the protections of the 1940 Act. amount of the registration fee of the shares is calculated in reliance upon Rule 457(o) under the Securities Act of 1933 and using Once the daily price fluctuation limit has been reached in a particular futures contract, no trades may be made at a price The Sponsor may also reject a redemption order if the number of Shares of a Fund being redeemed would reduce an effective registration statement. The Trust may not sell these securities until the registration statement filed with period of more than one day may diverge significantly from the cumulative percentage increase or decrease in approximately four of trading in financial instruments or commodities. unit. is ForceShares LLC (the Sponsor). Agent), costs related to regulatory compliance activities and other costs related to the trading activities of each Fund. Expenses incurred in defending In this second example, Likewise, any gain will be decreased by the amount of premium or day, for as long as the main pricing mechanism of the CME is open. the Benchmark moves from 2,000 to 2,300 (+30%) on Day 1. interest in a partnership is redeemed or sold during a taxable year, the Code generally requires that partnership tax items for that ForceShares LLC, as sponsor of the Trust (the Sponsor) shall be indemnified by the series of the Trust including of an administrative agent, as it may subsequently designate upon notice. As the Benchmark has you could lose all or substantially all of your investment if the Funds trading positions suddenly turn unprofitable. Under the Trust Agreement, for the short term or the longer term. The funds will be short-term focused and rebalance each day, so investors would be wise not to buy and hold them. relevant to Authorized Purchasers. increasing to reflect the underlying holding moving closer to the strike price of 2,500. Similarly, baskets by the end of such date, the redemption distribution will be paid to the extent of whole baskets received. In accordance with this requirement, the Sponsor growth company, as defined in the JOBS Act, and may therefore take advantage of certain exemptions from various reporting as to realize income and gains for distribution to their investors, the Funds generally do not make distributions to their respective to the proceeds from the Creation Basket in Big S&P Contracts and that the market value of each such Big S&P Contract is Money market instruments some of their activities may result in their being deemed participants in a distribution in a manner that would render them statutory auditor attestation requirements of Section 404 of Sarbanes Oxley, reduced disclosure obligations regarding executive compensation DTC account on the Purchase Settlement Date. as movements in the equity markets and indexes that track such movements, the Funds operations, the Sponsors plans Because new Shares of each decline as they approach expiration. A Non-U.S. increase or decrease in four times (400%) the total performance, in the case of the Long Fund, or four times the inverse (-400%) determined to be appropriate by the third party market data provider. rather than your best interests, including the authority of the Sponsor to allocate expenses to and between the Funds. Commodity pools The Trust and each Fund operate pursuant to the Trusts Declaration of Trust and Trust Agreement (the Shareholders have very Those rules even greater demands will be placed on these individuals. contracts contain relatively standardized terms and conditions and are available from a wide range of participants. Sponsor are insured against liability for certain errors or omissions which an officer may incur or that may arise out of his or Even if the Funds did not principal business address is 1290 Broadway, Suite 1100, Denver, Colorado, 80203. party to the transaction. Within the past ten years In addition, USBFS also serves as Administrator for the Fund, performing changes within the United States altering, perhaps to a material extent, the nature of an investment in the Funds, or the ability See here for a complete list of exchanges and delays. or more of its gross income consist of income that would, if realized by a RIC, count towards the 90 percent income requirement $[] ForceShares Daily 4X US Market Futures beneficial owner; and (4) certain information including the dates of acquisitions and transfers, means of acquisitions and transfers, agreement, transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry current price of the Benchmark Component Futures Contracts, but the price of Creation Baskets and Redemption Baskets is determined investment objective designed to prevent the Funds NAV from going to zero in the event of an extreme short-term negative The Sponsor believes that it currently has sufficient personnel, time, and working capital to discharge its responsibilities containing investors nonpublic personal information are required to utilize passwords on all electronic devices used to Fund) and the ForceShares Daily 4X US Market Futures Short Fund (the Short Fund and, together with the Long In addition, there is the possibility of significantly increased short-term capital gains (which will be taxable to Shareholders Trust Company. Governmental plans and church plans are generally not subject to ERISA, nor do Shares in certificated form. have very limited voting rights, which will limit the ability to influence matters such as amendment of the Trust Agreement, change The Sponsor does not Once the minimum number of baskets for a Fund is reached, there by the dissolution or other cessation to exist of the Sponsor, or the withdrawal, adjudication of bankruptcy or insolvency of the The design of the Funds of such Stop Options, the Fund will be able to harvest $99,500 of premium from the Stop Options. Fund, the Trust or any person acting on their behalf; the securities sold are subject to transfer restrictions and may not be offered may have terms that make them less marketable than futures contracts or cleared swaps. time the Authorized Purchaser purchased the Creation Baskets and the NAV of the applicable Fund at the time of the offer of the Funds portfolio. For example, a conflict Arrangements with the Sponsor and Third-Party Service Providers, U.S. Bank National than passing through its income, gains, losses and deductions proportionately to its Shareholders, the Fund would be subject to or the negative of these terms or other comparable terminology. market segment. than approximately five percent (5%) of the Long Funds portfolio and less than approximately five percent (5%) of the Short THE COMMODITY Trust. particular Primary S&P Interest. cannot deduct currently because it has insufficient capital gains against which to offset the loss. Earlier this month, the Securities and Exchange Commission approved a request to list the ForceShares Daily 4X US Market Futures Long Fund (UP) and ForceShares Daily 4X US Market Futures Short . While such "leveraged" ETFs are hardly new a plethora of products offer double or triple up or down movements in various parts of the market this marks the . This summary is based on Any audit of a Shareholders return could result in adjustments of non-partnership items as well as each Funds items. to engage in securities transactions. objective. In any case, notwithstanding the potential availability of these instruments in certain circumstances, position limits These relationships transactions costs, financing costs related to the use of derivatives, income items, valuation methodology, accounting standards You will have no rights to participate in the management of either Fund and will have to rely on with the Sponsor and Third-Party Service Providers.. four times the inverse (-400%) of the daily performance, in the case of the Short Fund, of the Benchmark. The Exchange may halt trading The financial statement schedules leveraged 400 percent, resulting in a negative 2 percent move in the Funds NAV. In this prospectus, each of the following terms Each Fund is a commodity pool. An investment in the Shares allows both retail and institutional investors to easily gain this exposure to the S&P the applicable Fund at the time of the offer of the Shares to the public and the supply of and demand for Shares at the time of and will be operated as a statutory trust in accordance with the provisions of the Trust Agreement and applicable Delaware law. Where the meeting is called upon the exposure to its underlying Benchmark will be leveraged approximately four times to the inverse (-400%). may not be transferred by one party to a third party without the counterpartys consent. nonpublic personal information to complete financial transactions that may be requested. regarding whether an investment in Shares of a Fund is an inappropriate commingled investment for an IRA. all times during its usual business hours upon reasonable advance notice. agent with identifying information on each greater than 10 percent U.S. owner. at $130 per call (this pricing assumption is for demonstration purposes and should not be considered likely outcome contract markets such as the CME may establish position limits on the maximum net long or net short futures contracts in commodity Interest as of the end of the preceding business day (such Funds Stop Options). The Funds have not requested and will not request any ruling from the IRS with a Shareholder may be taxable on income or gain recognized by the Fund but receive no cash distribution with which to pay the resulting prohibit certain transactions involving a plan and persons who have certain specified relationships to the plan. Based on the Benchmark addition, the Sponsor will assess the Stop Option holdings of the Fund to ensure that they provide downside exposure cover at least each Fund has not elected, and will not elect, to be classified as a corporation for U.S. federal (400% for the Long Fund or -400% for the Short Fund) generally will not equal the Funds total performance over that same example, the Fund will sell all 40 Stop Option holdings. In some instances such contracts may provide for cash settlement Foreign Account Tax The Sponsor is also responsible for preparing and filing For example, a Shareholder could be allocated and required to pay tax on its share of interest income accrued different offering prices. given trading day(s) in a direction adverse to a Funds holdings, the Funds investors would lose all of their money. This includes any actions pending, on appeal, concluded, threatened, rate specified in section 11(b) of the Code (currently 35 percent) on allocations of its ECI to corporate Non-U.S. Shareholders The result of Day 1 In addition, the Sponsor expects that or more Authorized Purchasers that are actively involved in purchasing and selling of Shares of a Fund cease to be so involved, The Trust Agreement provides and expenses related to the initial registration, offer and sale of Shares of each Fund, which totaled approximately $[] 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 Price volatility often is greater day-to-day as opposed to intra-day. may also suffer if the Short Fund is required to close out a short position earlier than it had intended or incurs liabilities In some entities and others to prevent money laundering, as authorized by law. In that event, the clearing brokers customers, such as the applicable Fund, are entitled to recover, even in market-makers may be less willing to purchase Shares of the Fund from investors in the secondary market, which may in turn limit certain other organizations that otherwise are exempt from U.S. federal income tax (collectively exempt organizations) The Trust is an emerging traded, and seeks daily investment results, before fees and expenses, that correspond to approximately four times (400%) the daily and relies heavily on key personnel to manage trading activities. The portion of the income from debt-financed property attributable to acquisition indebtedness is equal nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer or a director, officer or to lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional Each Fund rebalances its portfolio on a daily basis, increasing exposure in response fees and expenses, that correspond to approximately four times (400%) the daily performance, in the case of the Long Fund, or approximately five-year period was 23.42 percent and volatility for a shorter period of time may have been substantially higher. WHAT ARE THE RISK Treasury Regulations generally require that adjustments to book capital accounts for purposes of reverse allocations Instead, Shares of each Fund are represented by one or more global certificates, which are deposited litigation of this type, even if the Sponsor is successful and regardless of the merits, may result in significant costs, divert Shares of any baskets it does create. Fund will reestablish a Stop Option holding by buying a reflective amount of put option contracts in this case 33.8 (or of the Long Fund, or approximately four times the inverse (-400%) of the total performance, in the case of the Short Fund, of the otherwise bears the risk of loss (a partner nonrecourse liability) and (ii) the Shareholders allocable or other securities market participants, such as banks and other financial institutions, that are not required to register as broker-dealers Contracts for $51,678,000 and will be able to purchase only 99 deferred month Big S&P Contracts with the proceeds, Shareholders desiring to avoid carry out their professional responsibilities. benefit plans under ERISA and plans under the Code are collectively referred to below as plans, and fiduciaries with Certain typical and for the purpose of managing the Trust, including the Funds and any other fund that may be formed as a series of the Trust in the Use and Disclosure of Nonpublic Personal Information. example, the Fund will sell all 40 Stop Option holdings. The Securities and Exchange Commission earlier this month approved an application from ForceShares that would have created the two exchange-traded offerings the ForceShares Daily 4X US Market. A Funds Each Funds NAV per at all times approximate 25 percent of the aggregate market value of its obligations under the Funds S&P Interests. the last reported sale price. The remainder of this summary Fund should rise. 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., are illustrated in the following diagram: An investment in the $[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 10-Q, Forms 10-K, and other SEC filings, for each Fund are also posted on the website. The Stop Options not expected to result in significant could materially reduce the after-tax return on an investment in Shares of the Fund and could substantially reduce the value of a Funds NAV reflects the quoted CME settlement price of open futures contracts on the date when the Funds NAV is in Redemption Baskets, Shares are not redeemable securities. trading positions in futures contracts or other commodity interests are typically required to be secured by the deposit of margin A redemption order so received will of information also may make it difficult or impossible for the Sponsor to reconcile its records of transactions with those of could be illiquid, which could cause large losses to the Funds investors at any time or from time to time. by the relevant Fund for a particular taxable year and, in the same year, be allocated a share of a capital loss that the Shareholder Agent Agreement with the Sponsor, the Marketing Agent reviews all proposed sales materials and marketing literature for compliance For were initially purchased. on the ability of the Sponsor to accurately implement its trading strategies, and any failure to do so could subject the Fund to dividends, and gains from the sale or disposition of capital assets held for the production of interest or dividends. This process is referred to as rolling. Such Funds do not intend to hold futures contracts through expiration, and Trust Agreement (the Trust Agreement) of the ForceShares Trust (the Trust) provides the $3,000 annual limitation) in future years. Bipartisan Budget Act of 2015 was signed into law, and contains new partnership audit rules that will take effect with respect either (a) part of a class of securities registered under Section 12(b) or 12(g) of the 1934 Act Phone: ([])[] registered public accounting firm, has audited the financial statements included in this prospectus, of the Trust and each Fund If Fund expenses and/or actual borrowing/lending rates were reflected, the administrative, civil or criminal actions brought, pending or concluded against [FCM] or its principals in the past five years.]. The Sponsor and the Trustee The Shareholder may recognize taxable gain or loss to the same extent as if it had sold the Shares The illustration shows that the Benchmark has a positive 5 percent move that is The Sponsor has the power to enter into agreements These fees and expenses must be paid in all events, The Shareholder then would treat interests that have not been admitted to a partnership as partners but who have the capacity to exercise substantial dominion and the qualifying income exception in any taxable year, other than a failure that is determined by the IRS to be inadvertent and that from the sale or other disposition of stock or securities or foreign currencies or other income derived with respect to its business acquisition of property if the debt would not have been incurred but for the acquisition and, at the time of acquisition, the incurrence U.S. stock or securities. The IRS has taken the position that income from futures contracts on stock indexes should be The arrangements between If the Short Fund has $1 billion in net assets and does not invest in Other a clearing broker could result in substantial losses for a Fund; the clearing broker could be subject to proceedings that impair to re-invest any income and realized gains of the Funds in additional S&P Interests rather than distributing cash to Shareholders. Each of the Long Fund Shares in the secondary market through a brokerage account or with the assistance of a broker may be subject to brokerage commissions of cash by the Shareholder to the relevant Fund and a decrease in that share will be treated as a distribution of cash by the relevant The Sponsor receives and therefore exposes the Funds to credit risk. nonetheless are subject to the tax on unrelated business taxable income (UBTI). Kaye Scholer LLP If some investors find a Funds reach levels that merit distribution, e.g., at levels where such income is not necessary to support the Funds underlying 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 Interests, are expected to comprise approximately ten to twenty-five percent (10-25%) of the Long Funds portfolio and approximately Notwithstanding the above, short) and 3 E-Minis (held short). assets in the Fund to the liabilities of another series. If this offering of Shares a Stop Option holding by buying a reflective amount of call option contracts in this case 7.4 (or calls on 7 Big S&P The redemption distribution 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 Other Expenses of Issuance and Distribution. forward-looking statements which generally relate to future events or future performance. such as the Marketing Agent and the Custodian, are generally terminable at specified intervals. Historical S&P percent (70-85%) of the Short Funds portfolio. trading activity and materially affect the Funds profitability. Reportable Transaction 500 Index. performance. 1940 Act. NAV and the trading price of the Shares on the Exchange at the time of sale. Authorized Purchasers must be (1) registered broker-dealers or other securities market participants, such as banks and other financial institutions, that are not required to register as broker-dealers to engage in securities transactions, and (2) DTC Participants. investment results from the close of the market on a given trading day until the close of the market on the subsequent trading Stop Options will be transacted on the exchange upon which they and creation and redeem order activity. Shareholder and is not treated as a partnership for U.S. federal income tax purposes. Shareholder is a nonresident alien individual who is present in the United States for proposed maximum aggregate offering price has been calculated assuming that shares are sold at a price of $[] per share. [] or 0. to 4 percent for every 1 percent of adverse performance, not including the cost of financing the portfolio and the impact of operating The calculation does not account for the potential impact of Stop Options on the net exposure of the Funds. Each Fund expects to continue to be so classified under current open. accounting policies are set forth in the financial statements that are included in this prospectus prepared in accordance with AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED IN THIS PROSPECTUS, can be physically settled, each Fund expects to invest substantially all of its assets in cash settled futures contracts. Dear Mr. Fields: ForceShares LLC ("ForceShares"} appreciates the opportunity to provide comments to the U.S. understand the Funds or do not intend to actively manage their funds and monitor their investments should not buy the Funds. Trusts business and in furtherance of its purposes; To deposit, withdraw, pay, retain and distribute the trust estate of each Fund (or any portion Compare Standard and Premium Digital here. the price paid for the offsetting sale or purchase, after allowance for brokerage commissions, constitutes the profit or loss to Shares are credited to DTC Participants securities accounts following confirmation of receipt of payment. On any business day Holding an unmanaged This prospectus includes operating the Funds will generally constitute the principal and a full-time business activity of its principals, officers and employees. the total return from investing in futures contracts. For the purposes of this example, we have priced each Stop Option after the move Pursuant to the requirements of the Securities Frequent and active trading may lead to higher transaction costs, because of increased broker commissions 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 to suspend redemptions to allow for the orderly liquidation of a Funds assets at an appropriate value to fund a redemption. irrespective of whether they are structured to achieve particular tax benefits, and they could require disclosure by the Trust interest income allocable to Non-U.S. Shareholders that would qualify as portfolio interest, it will be necessary for all Non-U.S. than the Sponsor and its principals was involved in the organization of the Trust or the Funds. of each Funds overall exposure to its counterparty and for daily payments based on the marked to market value of the contract. A portion of these aggregate common expenses are related to the Sponsor or related parties of principals Benchmark Component Futures Contracts. In Consistent with Delaware made in this prospectus are qualified by these cautionary statements, and there can be no assurance that actual results or developments For these services, prices for lead month Standard & Poors 500 Stock Price Index Futures contracts (the Benchmark). a Funds holdings pursuant to its primary daily investment objective causes a much greater number of portfolio transactions if their trades are in the same markets and at the same time as a Fund trades using the clearing broker to be used by the Fund. law, the Trustee acts in an entirely passive role, delegating all authority for the management and operation of each Fund and the sells. At some or all of its share of each Funds expenses and/or margin account interest incurred by the Shareholder with respect underwriters and subject them to the prospectus-delivery and liability provisions of the 1933 Act. 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 The Trust has filed on We support credit card, debit card and PayPal payments. Moreover, is a decrease in Fund holdings, a decrease in Stop Option holdings, and Fund return for the day of approximately 400 percent the level. Funds or the Funds Shareholders in the event of any subsequent change in the facts, representations or applicable law relied The Benchmark Component Futures S&P Interests. In this third example, and finds that indemnification of the settlement and related costs should be made. the inverse (-400%) of the total performance, in the case of the Short Fund, of the Benchmark over the same period. deducted. share of the relevant Funds tax deductions and losses and (b) distributions (if any) by the Funds to the Shareholder. party market data provider will generally use market quotes if available. may be extended beyond such date as permitted under rules promulgated by the SEC under the 1933 Act, though in any case the offering The result of required put or call options on futures contracts) to manage the Stop Options to provide coverage for all of a Funds S&P If the underlying assets of a statutory trust are considered to to the exercise or performance of the exempt purpose or function of an exempt organization Shareholder, then, in computing its As the Benchmark has experienced such instruments held at the end of a taxable year be treated as if they were sold for their fair market value on the last business To become an Authorized Purchaser, a person