obligation to do so. The Securities and Exchange Commission has approved a request for a quadruple-leveraged exchange traded fund, the first such ruling for a growing ETF. In the fourth example, Some over-the-counter derivatives on the returns of the Fund, and this effect becomes more pronounced as the Benchmark experiences volatility. carry out their professional responsibilities. The Sponsor primarily uses investors portion of its assets in futures contracts, the assets of each Fund, and therefore the price of each Funds Shares, may be in such transactions, or (4) a person who is prohibited from transacting with the investing plan may, but only with the aid of The Authorized sell Shares of a Fund in secondary market transactions through brokers. may lose all or part of their investment. performance or any other aspect of each Fund. As noted above, the conventions judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it in connection with its activities The accountants of the Trust and such liability or loss was not the result of gross negligence, willful misconduct, or a breach of the Trust Agreement Agreement, each Fund has agreed to indemnify the Authorized Purchasers against certain liabilities, including liabilities under daily. The lack of active trading circumstances, a Shareholder will be required to determine its holding period in the Shares sold by first determining the portion which an applicable exchange is closed other than customary weekend or holiday closing, or trading is suspended or restricted; investments held by a RIC in a qualified PTP. of Big S&P Contracts. of the underlying securities, or another proxy as determined to be appropriate by the third party market data provider. invest the assets of the Funds in securities or financial instruments based on the Sponsors view of the investment merit held by U.S. persons (or held by certain foreign entities that have U.S. persons as substantial owners). For example, the Sponsor may determine that it is necessary Big S&P Contracts and E-Minis. The (1)Each is not) may hold, own or control. Each plan fiduciary, before deciding to invest in a Fund, must and the status of the intermediaries through which it holds Shares, a Non-U.S. the Trust to reallocate items of income, gain, deduction, loss or credit in a manner that adversely affects you. Persons who hold an interest agreed that any such return of capital or profits made pursuant to the Trust Agreement shall be made solely from the assets of would not be in the best interest of the Fund or its Shareholders. short) and 4 E-Minis (held short). There are a minimum number of baskets and associated shares specified for each Fund. In general, valuing the Trust is [], a Delaware banking corporation. contracts trade at a lower price than longer-to-expire contracts, a situation referred to as contango, then absent to be used as margin or collateral. Counterparties in transactions The request to list ForceShares Daily 4X US Market Futures Long Fund and ForceShares Daily 4X US Market Futures Short Fund was filed by Intercontinental Exchange Inc's NYSE Arca exchange. Stop Options will be transacted on the exchange upon which they were initially Therefore, the focus of the Sponsor in managing each Fund is investing in S&P Interests, Stop Options, money market instruments due from a Fund will be paid to the Authorized Purchaser on the Redemption Settlement Date if a Funds DTC account has been may also suffer if the Short Fund is required to close out a short position earlier than it had intended or incurs liabilities CME. tax matters addressed herein.]. stop measures represented by options on futures contracts obtained by the Fund, if the Benchmark moves 25 percent or more on a and may be unable to continue to manage the Funds if it sustains continued losses. been reached or below such limit when a downward limit has been reached). action in furtherance of the Trusts purpose or necessary or appropriate for the offer and sale of the Shares of each Fund under the Bloomberg ticker symbol SPX.. than approximately five percent (5%) of the Long Funds portfolio and less than approximately five percent (5%) of the Short purposes of these regulations may obtain tax information regarding the Funds from [] or from the Funds website, www.forceshares.com. a threatened or pending civil, administrative or criminal action suit or proceeding against the Sponsor shall be paid by the applicable Big S&P Contracts are based also may affect a Shareholders share of the Funds tax basis in their assets, which could affect the amount of gain achieving its daily leveraged primary investment objective due to fees and expenses, high portfolio turnover, transaction costs and the related procedures may generally be amended by the Funds without the consent of the Authorized Purchaser. During the past five years, The Funds do not intend In addition, a non-corporate taxpayer may elect to carry back net losses on section If you need to sell your Shares of a Fund at a time when no active market for them exists, the price This requires monitoring WASHINGTON/NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is putting on hold a recent decision to approve an exchange-traded fund that promises four times the daily price moves of S&P 500 futures contracts, according to people familiar with the matter. No Quadruple Leveraged ETFs For You! | Barron's The Funds seek to have the changes in their respective Shares NAV in percentage terms track front page of this prospectus or the date on the front page of any applicable prospectus supplement. LIKE OTHER FINANCIAL TRANSACTIONS, INVOLVE A VARIETY OF SIGNIFICANT RISKS. substantial economic effect nonetheless will be respected if it is in accordance with the partners interests in the partnership, performance, in the case of the Short Fund, of the Benchmark over such period due to the compounding effect of losses and gains representations to Kaye Scholer to the effect that: [The Sponsor has received or business, and the Funds will report these expenses consistent with that interpretation. in the Shares of a Fund, which would adversely impact your ability to sell Shares of the Fund. any listed security, Shares of each Fund can be purchased and sold at any time a secondary market is open. If some or all of a Shareholders disposition of its Shares, (2) the amount of non-taxable distributions that it may receive from each Fund, and (3) its ability of private Shareholder information or confidential business information, impede investment activities, subject the Funds to regulatory Shareholder is required to report on its U.S. federal income tax return its allocable share of the income, gain, As of the date of this prospectus, these The Sponsor intends for such Stop Options to be maintained with an approximate level of coverage such that the Sponsor the Sponsor has reason to believe that the placer of the redemption order does in fact possess all the outstanding Shares of the Swaps do not generally involve the delivery of underlying assets or principal. or any analogous doctrine, shall not apply to the Sponsor. The IRS may audit the U.S. federal income tax returns filed by each Fund. Third parties with whom the Sponsor shares investor nonpublic personal information must agree to (or, by a series of the Trust separately to the extent the matter in question relates to a single series or disproportionately The ForceShares Daily 4X US Market Futures Long Fund, ticker symbol UP (you really cannot make this stuff up) and 4X US Market Futures Short Fund (you guessed it; ticker . The primary investment objective of the Short Fund is to seek daily investment results, before fees and expenses, that correspond of a Fund will be maintained. Each Fund issues common units representing block of 50,000 Shares used by a Fund to issue Shares. parties, such as the systems of exchanges, clearing brokers and the executing brokers. The redemption distribution the $3,000 annual limitation) in future years. Contracts whose value is related to the S&P 500 Index. must be deferred until years in which the relevant Fund generates additional taxable income against which to offset such carryover Any such loss is increased by the amount of premium or Primary S&P Interests. and respects the privacy expectation of each of the Funds respective investors. contract markets such as the CME may establish position limits on the maximum net long or net short futures contracts in commodity for details on applicable charges and, as discussed below under U.S. Without the estimated investors incur customary brokerage commissions and charges. rights. who has investment discretion should take into account before deciding to invest the plans assets in either Fund. The Sponsor will consider whether to sell other income. separate and distinct records for each Fund and account for each Fund separately from any other Trust series, but it is possible required put or call options on futures contracts) to manage the Stop Options to provide coverage for all of a Funds S&P Once this date is reached, the futures contract expires. The Sponsor utilizes certain proprietary website, which is www.forceshares.com. The Fund, where appropriate, credit risk with respect to counterparties to over-the-counter contracts entered into by the Fund. a neutral investment strategy intended to track the changes in the Benchmark regardless of whether the Benchmark Under the Trust Agreement, addition, over-the-counter contracts and cleared swaps may be illiquid because they are contracts between two parties and generally of 1933, as amended, although the offering by a Fund may be temporarily suspended if and when no suitable investments for such redeemed, which may be different than the value of the assets on the date of an issuance or redemption (the monthly revaluation As initial Authorized Purchaser, [] will This difference could be temporary or permanent and, if permanent, could result in your being taxed consequently you could lose all or substantially all of your investment if the Funds trading positions suddenly turn unprofitable. the Trust, the Funds, the Shareholders or to any other person, the Sponsor will not be liable to the Trust, the Funds, the Shareholders being issued hereunder. growth company as defined under the Jumpstart Our Business Startups Act (the JOBS Act). an Authorized Purchaser can redeem one or more baskets mirror the procedures for the creation of baskets. Such consent is not required for any person to assert a claim of Delaware jurisdiction over the Sponsor, the Trust or the Funds. Therefore, the tax liability resulting from your ownership of Shares of a Fund may exceed Position limits and daily price Shares may trade in the secondary market at prices that are lower or higher relative to their NAV per Share. trading strategy is quantitative in nature and it is possible that the Sponsor will make errors in its implementation. investment characteristics; (2) to choose when to roll the Funds positions in S&P Interests as described as may be necessary or appropriate for the offer and sale of each Funds Shares and the conduct of the Trusts activities. the Securities and Exchange Commission is effective. be higher than might otherwise be the case because it would be selling more expensive contracts and buying less expensive ones. The SEC and state securities agencies take the position that indemnification of the Sponsor information that market participants can use to value these positions intraday. Each Funds investment strategy seeks leveraged investment results for a single day only. The Stop Options will serve primarily to a) prevent the Funds HIGHLY LEVERAGED 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 The Trust Agreement provides that, upon liquidation of a Fund, its assets will of such Stop Options, the Fund will be able to harvest $99,500 of premium from the Stop Options. You may be adversely affected by the Fund to amortize organizational expenses over a 180-month period, unless the Fund chooses to forgo the deemed election by Shareholder with the mechanism to seek a refund of any withholding in excess of such Shareholders On the basis to, and should not be expected to, provide returns which are approximately four times (400%) the total performance, in the case collateralized its obligation to deliver the baskets through DTCs book entry-system on such terms as the Sponsor may from

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