What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-03-04 · 100 added, 121 removed, 808 unchanged (21% of the section changed)

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Diablo Boulevard, Suite 640, Walnut Creek, California 94596.

USCF is a wholly-owned subsidiary of Wainwright Holdings, Inc., a Delaware corporation (“Wainwright”), which is an intermediate holding company that owns USCF and another advisor of exchange traded funds.

Wainwright is a wholly owned subsidiary of Concierge Technologies, Inc.

(publicly traded under the ticker CNCG) (“Concierge”), a publicly traded holding company that owns various financial and non-financial businesses.

Nicholas Gerber (discussed below), along with certain family members and certain other shareholders, owns the majority of the shares in Concierge.

Wainwright is a holding company that currently holds both USCF, as well as USCF Advisers LLC, an investment adviser registered under the Investment Advisers Act of 1940, as amended (“USCF Advisers”).

USCF Advisers serves as the investment adviser for the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (“SDCI”), USCF Midstream Energy Income Fund (“UMI”) and USCF Gold Strategy Plus Income Fund (“GLDX”), each a series of the USCF ETF Trust.

USCF Advisers was also the investment adviser for the USCF Commodity Strategy Fund (the “Mutual Fund”), a series of the USCF Mutual Funds Trust, until March 2019, when the Mutual Fund liquidated all of its assets and distributed cash pro rata to all remaining shareholders.

It was also the investment adviser for two series of the USCF ETF Trust that liquidated all of their assets and distributed cash pro rata to all remaining shareholders:

the USCF SummerHaven SHPEI Index Fund (“BUY”), until October 2020, and the USCF SummerHaven SHPEN Index Fund (“BUYN”), until May 2020.

USCF ETF Trust and USCF Mutual Funds Trust are registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Board of Trustees for the USCF ETF Trust and USCF Mutual Funds Trust consist of different independent trustees than those independent directors who serve on the Board of Directors of USCF.

USCF is a wholly-owned subsidiary of USCF Investments, Inc., formerly Wainwright Holdings, Inc., a Delaware corporation (“USCF Investments”), which is an intermediate holding company that owns USCF and another advisor of exchange traded funds.

USCF Investments is a wholly owned subsidiary of The Marygold Companies, Inc., formerly, Concierge Technologies, Inc.

(publicly traded under the ticker:

MGLD ) (“Marygold”), a publicly traded holding company that owns various financial and non-financial businesses.

Nicholas Gerber (discussed below), along with certain family members and certain other shareholders, owns the majority of the shares in Marygold.

USCF Investments is a holding company that currently holds both USCF, as well as USCF Advisers LLC, an investment adviser registered under the Investment Advisers Act of 1940, as amended, (“USCF Advisers”).

USCF Advisers serves as the investment adviser for the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (“SDCI”), USCF Midstream Energy Income Fund (“UMI”), USCF Dividend Income Fund (“UDI”), USCF Gold Strategy Plus Income Fund (“GLDX”) and USCF Sustainable Battery Metals Strategy Fund, each a series of the USCF ETF Trust.

USCF ETF Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

The Board of Trustees for the USCF ETF Trust consists of different independent trustees than those independent directors who serve on the Board of Directors of USCF.

USCF is a member of the National Futures Association (the “NFA”) and registered as a commodity pool operator (“CPO”) with the Commodity Futures Trading Commission (the “CFTC”) on December 1, 2005 and as a swaps firm on August 8, 2013.

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USO, UNG, UGA, USL, BNO, USCI and CPER are referred to collectively herein as the “Related Public Funds.”

The Related Public Funds are subject to reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

UNL and the Related Public Funds are subject to reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

For more information about each of the Related Public Funds, investors in UNL may call 1-800-920-0259 or visit www.uscfinvestments.com or the website of the Securities and Exchange Commission (“SEC”) at www.sec.gov.

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UNL would use a spread when it chooses to take simultaneous long and short positions in futures written on the same underlying asset, but with different delivery months.

During the reporting period of this annual report on Form 10-K, UNL has limited its derivatives activities to futures contracts in natural gas and EFRP transactions.

During the reporting period of this annual report on Form 10-K, UNL limited its derivatives activities to futures contracts in natural gas and EFRP transactions.

UNL has not employed and will not employ the technique, commonly known as pyramiding, in which the speculator uses unrealized profits on existing positions as variation margin for the purchase or sale of additional positions in the same or another commodity interest.

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For the period October 10, 2013 and after, UNL pays RBC Capital commissions for executing and clearing trades on behalf of UNL.

RBC Capital’s primary address is 3 World Financial Center, 200 Vesey St., New York, NY 10281.

RBC Capital’s primary address is 200 Vesey St., New York, NY 10281.

Effective October 10, 2013, RBC Capital became the futures clearing broker for UNL.

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when they will ultimately be resolved;

or what the eventual settlement, fine, penalty or other

relief, if any, might be.

or what the eventual settlement, fine, penalty or other relief, if any, might be.

Subject to the foregoing, RBC Capital believes, based on current knowledge and after consultation with counsel, that the outcome of such pending matters will not have a material adverse effect on the consolidated financial condition of RBC Capital.

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The order required that RBCCM cease and desist from violating the applicable regulations, pay a $5 million civil monetary penalty, and comply with various conditions, including conditions regarding public statements and future cooperation with the CFTC.

On June 18, 2015, in connection with the Municipalities Continuing Disclosure Cooperation initiative of the SEC, the SEC commenced and settled an administrative proceeding against RBC Capital for willful violations of Sections 17(a)(2) of the Securities Act of 1933, as amended (“1933 Act”) after the firm self-reported instances in which it conducted inadequate due diligence in certain municipal securities offerings and as a result, failed to form a reasonable basis for believing the truthfulness of certain material representations in official statements issued in connection with those offerings.

RBC Capital paid a fine of $500,000.

RBC Capital and certain affiliates were named as defendants in a lawsuit relating to their role in transactions involving investments made by a number of Wisconsin school districts in certain collateralized debt obligations.

These transactions were also the subject of a regulatory investigation, which was resolved in 2011.

RBC Capital reached a final settlement with all parties in the civil litigation, and the civil action against RBC Capital was dismissed with prejudice on December 6, 2016.

Beginning in 2015, putative class actions were brought against RBC Capital and/or Royal Bank of Canada in the U.S., Canada and Israel.

These actions were each brought against multiple foreign exchange dealers and allege, among other things, collusive behavior in foreign exchange trading.

Various regulators are also conducting inquiries regarding potential violations of law by a number of banks and other entities, including RBC Capital, regarding foreign exchange trading.

Various regulators are conducting inquiries regarding potential violations of antitrust law by a number of banks and other entities, including RBC Capital, regarding foreign exchange trading.

Beginning in 2015, putative class actions were brought against RBC Capital and/or Royal Bank of Canada, RBC Capital’s indirect parent, in the U.S.

These actions were each brought against multiple foreign exchange dealers and allege, among other things, collusive behavior in global foreign exchange trading.

In August 2018, the U.S.

District Court entered a final order approving RBC Capital’s pending settlement with class plaintiffs.

Certain institutional plaintiffs opted out of participating in the settlement and have brought their own claims.

The Canadian class actions, one other U.S.

action that is purportedly brought on behalf of different classes of plaintiffs, and an action filed in Israel remain pending.

Based on the facts currently known, it is not possible at this time for us to predict the ultimate outcome of these investigations or proceedings or the timing of their resolution.

On July 31, 2015, RBC Capital was added as a new defendant in a pending putative class action initially filed in November 2013 in the United States District Court for the Southern District of New York.

The action is brought against multiple foreign exchange dealers and alleges collusive behavior, among other allegations, in foreign exchange trading.

Based on the facts currently known, the ultimate resolution of these collective matters is not expected to have a material adverse effect on RBC.

District Court entered a final order approving RBC Capital’s settlement with class plaintiffs.

In November 2018, certain institutional plaintiffs who had previously opted-out of participating in the settlement filed their own lawsuit in U.S.

District Court.

In May 2020, the U.S.

District Court dismissed RBC Capital from the opt-out action, but granted the plaintiffs’ motion to amend the complaint.

The Canadian class actions remain pending and RBC Capital has reached a settlement for an immaterial amount with respect to an action brought by a class of indirect purchasers.

RBC Capital is awaiting the court’s final approval of the settlement.

In October 2020, RBC Capital and Royal Bank of Canada moved to dismiss the amended complaint.

On July 28, 2021, the court dismissed Royal Bank of Canada from the case but denied the motion as to RBC.

Based on the facts currently known, it is not possible at this time for management to predict the ultimate outcome of these collective matters or the timing of their ultimate resolution.

On April 13, 2015, RBC Capital’s affiliate, Royal Bank of Canada Trust Company (Bahamas) Limited (“RBC Bahamas”), was charged in France with complicity in tax fraud.

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The trial of this matter has concluded and a verdict was delivered on January 12, 2017, acquitting the company and the other defendants and on June 29, 2018, the French appellate court affirmed the acquittals.

The acquittals are being appealed.

Various regulators and competition and enforcement authorities around the world, including in Canada, the United Kingdom, and the U.S., are conducting investigations related to certain past submissions made by panel banks in connection with the setting of the U.S.

dollar London interbank offered rate (“LIBOR”).

These investigations focus on allegations of collusion between the banks that were on the panel to make submissions for certain LIBOR rates.

Royal Bank of Canada, RBC Capital’s indirect parent, is a member of certain LIBOR panels, including the U.S.

dollar LIBOR panel, and has in the past been the subject of regulatory requests for information.

In addition, Royal Bank of Canada and other U.S.

dollar panel banks have been named as defendants in private lawsuits filed in the U.S.

with respect to the setting of LIBOR including a number of class action lawsuits which have been consolidated before the U.S.

On January 6, 2021, the French Supreme Court issued a judgment reversing the decision of the French Court of Appeal dated June 29, 2018 and sent the case back to the French Court of Appeal for rehearing and therefore the proceeding is currently awaiting a new trial with the French Court of Appeal.

Royal Bank of Canada and other panel banks for the setting of the U.S.

dollar London interbank offered rate (“LIBOR”) have been named as defendants in private lawsuits filed in the U.S.

with respect to the setting of U.S.

dollar LIBOR including a number of class action lawsuits which have been consolidated before the U.S.

District Court for the Southern District of New York.

The complaints in those private lawsuits assert claims against us and other panel banks under various U.S.

RBC Capital has also been named as a defendant in one of those lawsuits.

The complaints in those private lawsuits assert claims under various U.S.

laws, including U.S.

antitrust laws, the CEA, and state law.

On February 28, 2018, the motion by the plaintiffs in the class action lawsuits to have the class certified was denied in relation to Royal Bank of Canada.

As such, unless that ruling is reversed

on appeal, Royal Bank of Canada is no longer a defendant in any pending class action.

Royal Bank of Canada is still a party to the various individual LIBOR actions.

Based on the facts currently known, it is not possible at this time for us to predict the ultimate outcome of these investigations or proceedings or the timing of their resolution.

Thornburg Mortgage Inc.

(“TMST”) and RBC Capital were parties to a master repurchase agreement executed in September 2003 whereby TMST financed its purchase of residential mortgage-backed securities.

Upon TMST’s default during the financial crisis, RBC Capital valued TMST’s collateral at allegedly deflated prices.

After TMST’s bankruptcy filing, TMST’s trustee brought suit against RBC Capital in 2011 for breach of contract.

In 2015, TMST was awarded more than $45 million in damages.

RBC Capital has appealed.

The appeals court set a briefing schedule and simultaneously ordered the parties to participate in a mediation.

The parties subsequently reached an agreement to settle the matter;

a motion to approve the settlement was filed with the bankruptcy court on January 10, 2016 and granted on February 27, 2017.

On October 14, 2014, the Delaware Court of Chancery (the “Court of Chancery”) in a class action brought by former shareholders of Rural/Metro Corporation, held RBC Capital liable for aiding and abetting a breach of fiduciary duty by three Rural/Metro directors, but did not make an additional award for attorney’s fees.

A final judgment was entered on February 19, 2015 in the amount of US$93 million plus post judgment interest.

RBC Capital appealed the Court of Chancery’s determination of liability and quantum of damages, and the plaintiffs cross-appealed the ruling on additional attorneys’ fees.

On November 30, 2015, the Delaware Supreme Court affirmed the Court of Chancery with respect to both the appeal and cross-appeal.

RBC Capital is cooperating with an investigation by the SEC relating to this matter.

In particular, the SEC contended that RBC Capital caused materially false and misleading information to be included in the proxy statement that Rural filed to solicit shareholder approval for the sale in violation of section 14(A) of the Exchange Act and Rule 14A-9 thereunder.

On August 31, 2016, RBC Capital was ordered by the SEC to cease and desist and paid $500,000 in disgorgement, plus interest of $77,759 and a civil penalty of $2 million.

antitrust laws, the U.S.

Commodity Exchange Act, and state law.

In addition to the LIBOR actions, in January 2019, a number of financial institutions, including RBC Capital, were named in a purported class action in New York alleging violations of the U.S.

antitrust laws and common law principles of unjust enrichment in the setting of LIBOR after the Intercontinental Exchange took over administration of the benchmark interest rate from the British Bankers’ Association in 2014 (the “ICE LIBOR action”).

On March 26, 2020, the defendants’ motion to dismiss the ICE LIBOR action was granted.

The plaintiffs filed a notice of appeal of that ruling to the United States Court of Appeals for the Second Circuit on April 24, 2020 and, thereafter, sought to substitute named plaintiffs.

The Second Circuit permitted substitution, but has not yet ruled on the merits of the appeal.

In August 2020, Royal Bank of Canada and other financial institutions were named as defendants in a separate, individual (i.e., non-class) action filed in California alleging that the usage and setting of LIBOR constitutes per se collusive conduct.

In November 2020 and May 2021, plaintiffs sought a preliminary injunction with respect to the setting of ICE LIBOR;

defendants opposed these motions and sought to transfer the matter to New York.

On June 3, 2021, the court denied defendants’ motion to transfer.

Defendants then moved to dismiss.

Plaintiffs’ motions for a preliminary

injunction and defendants’ motion to dismiss remain pending.

Based on the facts currently known, it is not possible at this time to predict the ultimate outcome of these proceedings or the timing of their resolution.

Please see RBC Capital’s Form BD, which is available on the FINRA BrokerCheck program, for more details.

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Therefore, neither USCF nor UNL believes that there are any conflicts of interest with RBC Capital or its trading principals arising from its acting as UNL’s FCM.

RCG Division of Marex Spectron

On May 28, 2020, UNL entered into a Commodity Futures Customer Agreement with RCG Division of Marex Spectron (“RCG”) to serve as a FCM for UNL.

This agreement requires RCG to provide services to UNL in connection with the purchase and sale of Futures Contracts and Other Natural Gas-Related Investments that may be purchased or sold by or through RCG for UNL’s account.

Under this agreement, UNL pays RCG commissions for executing and clearing trades on behalf of UNL.

RCG’s primary address is 360 Madison Avenue, 3rd Floor, New York, NY 10017.

RCG is registered in the United States with FINRA as a broker-dealer and with the CFTC as an FCM.

RCG is a member of various U.S.

Marex North America, LLC

On May 28, 2020, UNL entered into a Commodity Futures Customer Agreement with RCG Division of Marex Spectron, now Marex North America, LLC (“MNA”) to serve as a FCM for UNL.

This agreement requires MNA to provide services to UNL in connection with the purchase and sale of Futures Contracts and other Natural Gas-Related Investments which may be purchased or sold by or through MNA for UNL’s account.

Under this agreement, UNL pays MNA commissions for executing and clearing trades on behalf of UNL.

MNA's primary address is 360 Madison Avenue, 3rd Floor, New York, NY 10017.

MNA is registered in the United States with FINRA as a broker-dealer and with the CFTC as an FCM.

MNA is a member of various U.S.

futures and securities exchanges.

RCG is a large broker dealer subject to many different complex legal and regulatory requirements.

As a result, certain of RCG’s regulators may from time to time conduct investigations, initiate enforcement proceedings and/or enter into settlements with RCG with respect to issues raised in various investigations.

RCG complies fully with its regulators in all investigations which may be conducted and in all settlements it may reach.

As of the date hereof, RCG has no material litigation to disclose as that term is defined under the CEA and the regulations promulgated thereunder.

RCG will act only as clearing broker for UNL and as such will be paid commissions for executing and clearing trades on behalf of UNL.

RCG has not passed upon the adequacy or accuracy of this annual report on Form 10-K.

RCG will not act in any supervisory capacity with respect to USCF or participate in the management of USCF or UNL.

RCG is not affiliated with UNL or USCF.

Therefore, neither USCF nor UNL believes that there are any conflicts of interest with RCG or its trading principals arising from its acting as UNL’s FCM.

MNA is a large broker dealer subject to many different complex legal and regulatory requirements.

As a result, certain of MNA's regulators may from time to time conduct investigations, initiate enforcement proceedings and/or enter into settlements with MNA with respect to issues raised in various investigations.

MNA complies fully with its regulators in all investigations which may be conducted and in all settlements it may reach.

MNA settled with the CFTC in September 2020 to pay a monetary penalty of $250,000 for failure to meet minimum adjusted net capital requirements.

MNA improperly accounted for deductions arising out of an agreement that it entered to guarantee a revolving line of credit for an affiliated company when computing its net capital requirement.

MNA will act only as clearing broker for UNL and as such will be paid commissions for executing and clearing trades on behalf of UNL.

MNA has not passed upon the adequacy or accuracy of this annual report on Form 10-K.

MNA will not act in any supervisory capacity with respect to USCF or participate in the management of USCF or UNL.

MNA is not affiliated with UNL or USCF.

Therefore, neither USCF nor UNL believes that there are any conflicts of interest with MNA or its trading principals arising from its acting as UNL’s FCM.

E D & F Man Capital Markets Inc.

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ALPS Distributors - Marketing Agent(4)

0.06% on UNL’s assets up to $3 billion and 0.04% on UNL’s assets in excess of $3 billion.

0.06% on UNL’s assets up to $3 billion and 0.04% on UNL’s assets in excess of $3 billion through September 30, 2022 and commencing October 1, 2022, 0.025% on UNL’s total net assets.

(1) USCF pays this compensation.

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(4) BNY Mellon has served as the Custodian and Administrator of UNL since April 1, 2020.

*USCF to confirm.

Compensation to USCF

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charges may vary

RCG Division of Marex Spectron, Futures Commission Merchant

North America, LLC, Futures Commission Merchant

E D & F Man Capital Markets Inc., Futures Commission Merchant

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These fees were approximately $188,600 for the fiscal year ended December 31, 2022.

In addition, UNL is responsible for paying its portion of the directors’ and officers’ liability insurance for UNL and the Related Public Funds and the fees and expenses of the independent directors who also serve as audit committee members of UNL and the Related Public Funds organized as limited partnerships and, as of July 8, 2011, those Related Public Funds organized as a series of a Delaware statutory trust.

UNL shares the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based on the relative assets of each Related Public Fund computed on a daily basis.

These fees and expenses for the year ended December 31, 2021 were $1,082,000 for UNL and the Related Public Funds.

In addition, UNL is responsible for paying its portion of the directors’ and officers’ liability insurance for UNL and the Related Public Funds and the fees and expenses of the independent directors who also serve as audit committee members of UNL and the Related Public Funds UNL shares the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based on the relative assets of each Related Public Fund computed on a daily basis.

These fees and expenses for the year ended December 31, 2022 were approximately $1,258,000 for UNL and the Related Public Funds.

UNL’s portion of such fees and expenses for the year ended December 31, 2022 was $14,201.

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“Other information” customarily used in determining fair value includes information consisting of market data in the relevant market supplied by one or more third parties including, without limitation, relevant rates, prices, yields, yield curves, volatilities, spreads, correlations or other market data in the relevant market;

or information of the types described above from internal sources if that information is of the same type used by UNL in the regular course of its business for the valuation of similar transactions.

or information of the types described above from internal sources if that information is of the same type used by UNL in the regular course of its business for the valuation of similar

transactions.

The information may include costs of funding, to the extent costs of funding are not and would not be a component of the other information being utilized.

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The Authorized Participant Agreement provides the procedures for the creation and redemption of baskets and for the delivery of the Treasuries and any cash required for such creations and redemptions.

The Authorized Participant Agreement and the related procedures attached thereto may be amended by UNL, without the consent of any limited partner or shareholder or Authorized Participant.

The Authorized Participant Agreement and the related procedures attached thereto may be amended by UNL, without the consent of any limited partner or

shareholder or Authorized Participant.

Authorized Participants pay a transaction fee of $350 to UNL for each order placed to create one or more Creation Baskets or to redeem one or more Redemption Baskets.

The transaction fee may be reduced, increased, or otherwise changed by USCF.

Authorized Participants who make deposits with UNL in exchange for baskets receive no fees, commissions or other form of compensation or inducement of any kind from either UNL or USCF, and no such person will have any obligation or responsibility to UNL or USCF to effect any sale or resale of shares.

As of December 31, 2022, 10 Authorized Participants had entered into agreements with USCF on behalf of UNL.

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Determination of Required Deposits

The total deposit required to create each Creation Basket (“Creation Basket Deposit”) is the amount of Treasuries and/or cash that is in the same proportion to the total assets of UNL (net of estimated accrued but unpaid fees, expenses and other liabilities) on the purchase order date as the number of shares to be created under the purchase order is in proportion to the total number of shares outstanding on the purchase order date.

the purchase order date.

USCF determines, directly in its sole discretion or in consultation with the Administrator, the requirements for Treasuries and the amount of cash, including the maximum permitted remaining maturity of a Treasury and proportions of Treasury and cash that may be included in deposits to create baskets.

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The manner by which redemptions are made is dictated by the terms of the Authorized Participant Agreement.

By placing a redemption order, an Authorized Participant agrees to (1) deliver the Redemption Basket to be redeemed through DTC’s book-entry system to UNL’s account with the Custodian not later than 3:00 p.m.

By placing a redemption order, an Authorized Participant agrees to (1) deliver the Redemption Basket to be redeemed through DTC’s book-entry system to

UNL’s account with the Custodian not later than 3:00 p.m.

New York time on the second business day following the effective date of the redemption order (“Redemption Distribution Date”), and (2) if required by USCF in its sole discretion, enter into or arrange for a block trade, an exchange for physical or exchange for swap, or any other OTC energy transaction (through itself or a designated acceptable broker) with UNL for the sale of a number and type of futures contracts at the closing settlement price for such contracts on the Redemption Order Date.

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An order for one or more baskets may be placed by an Authorized Participant on behalf of multiple clients.

Authorized Participants who make deposits with UNL in exchange for baskets receive no fees, commissions or other forms of compensation or inducement of any kind from either UNL or USCF, and no such person has any obligation or responsibility to USCF or UNL to effect any sale or resale of shares.

Shares trade in the secondary market on the NYSE Arca.

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USCF will invest UNL’s assets in Natural Gas-Interests and investments in Treasuries, cash and/or cash equivalents.

When UNL purchases a Futures Contract and certain exchange-traded Other Natural Gas-Related Investments, UNL is required to deposit typically 5% to 30% with the selling FCMs on behalf of the exchange a portion of the value of the contract or other interest as security to ensure payment for the obligation under Natural Gas Interests at maturity.

to ensure payment for the obligation under Natural Gas Interests at maturity.

This deposit is known as initial margin.

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Clearing organizations are also subject to the CEA and the rules and regulations adopted thereunder and administered by the CFTC.

The CFTC is the governmental agency charged with responsibility for regulation of futures exchanges and commodity interest trading.

The CFTC is the governmental agency charged with

responsibility for regulation of futures exchanges and commodity interest trading.

The CFTC’s function is to implement the CEA’s objectives of preventing price manipulation and excessive speculation and promoting orderly and efficient commodity interest markets.

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Below are discussed several key regulatory items that are relevant to UNL.

The various statements made in this summary are subject to modification by legislative action and changes in the rules and regulations of the CFTC, the NFA, the futures exchanges, clearing organizations and other regulatory bodies.

other regulatory bodies.

In addition, with regard to any other rules that the CFTC or SEC may adopt in the future, the effect of any such regulatory changes on UNL is impossible to predict, but it could be substantial and adverse.

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Complicated margin requirements apply to spreads and conversions, which are complex trading strategies in which a trader acquires a mixture of options positions and positions in the underlying interest.

In October 2015, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the FDIC, the Farm Credit Administration, and the Federal Housing Finance Agency (each an “Agency” and, collectively, the “Agencies”) jointly adopted final rules to establish minimum margin and capital requirements for registered swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants (“Swap Entities”) that are subject to the jurisdiction of one of the Agencies (such entities, “Covered Swap Entities”, and the joint final rules, the “Final Margin Rules”).

The Final Margin Rules will subject non-cleared swaps and non-cleared security-based swaps between Covered Swap Entities and Swap Entities, and between Covered Swap Entities and financial end users that have material swaps exposure (i.e., an average daily aggregate notional of $8 billion or more in non-cleared swaps calculated in accordance with the Final Margin Rules), to a mandatory two-way minimum initial margin requirement.

The minimum amount of the initial margin required to be posted or collected would be either the amount calculated by the Covered Swap Entity using a standardized schedule set forth as an appendix to the Final Margin Rules, which provides the gross initial margin (as a percentage of total notional exposure) for certain asset classes, or an internal margin model of the Covered Swap Entity conforming to the requirements of the Final Margin Rules that is approved by the Agency having jurisdiction over the particular Covered Swap Entity.

The Final Margin Rules specify the types of collateral that may be posted or collected as initial margin for non-cleared swaps and non-cleared security-based swaps with financial end users (generally cash, certain government, government- sponsored enterprise securities, certain liquid debt, certain equity securities, certain eligible publicly traded debt, and gold);

and sets forth haircuts for certain collateral asset classes.

The Final Margin Rules require minimum variation margin to be exchanged daily for non-cleared swaps and non-cleared security-based swaps between Covered Swap Entities and Swap Entities and between Covered Swap Entities and all financial end-users (without regard to the swaps exposure of the particular financial end-user).

The minimum variation margin amount is the daily mark-to-market change in the value of the swap to the Covered Swap Entity, taking into account variation margin previously posted or collected.

For non-cleared swaps and security-based swaps between Covered Swap Entities and financial end-users, variation margin may be posted or collected in cash or non-cash collateral that is considered eligible for initial margin purposes.

Variation margin is not subject to segregation with an independent, third-party custodian, and may, if permitted by contract, be rehypothecated.

The initial margin requirements of the Final Margin Rules are being phased in over time, and the variation margin requirements of the Final Margin Rules are currently in effect.

UNL is not a Covered Swap Entity under the Final Margin Rules but it is a financial end-user.

Accordingly, UNL is currently subject to the variation margin requirements of the Final Margin Rules.

However, UNL does not have material swaps exposure and, accordingly, UNL will not be subject to the initial margin requirements of the Final Margin Rules.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) required the CFTC and the SEC to adopt their own margin rules to apply to a limited number of registered swap dealers, security-based swap dealers, major swap participants, and major security-based swap participants that are not subject to the jurisdiction of one of the Agencies.

On December 16, 2015 the CFTC finalized its margin rules, which are substantially the same as the Final Margin Rules and have the same implementation timeline.

The SEC adopted margin rules for security-based swap dealers and major security-based swap participants on June 21, 2019.

The SEC’s margin rules are generally aligned with the Final Margin Rules and the CFTC’s margin rules, but they differ in a few key respects relating to timing for compliance and the manner in which initial margin must be segregated.

UNL does not currently engage in security-based swap transactions and, therefore, the SEC’s margin rules are not expected to apply to UNL.

Rules put in place by U.S.

federal banking regulators, the CFTC and the SEC require the daily exchange of variation margin and initial margin for swaps between swap dealers, major swap participants, security-based swap dealers, and major security-based swap participants (“Swap Entities”) and swaps between Swap Entities and their counterparties that are “financial end-users” (such rules, the “Margin Rules”).

The Margin Rules require Swap Entities to exchange variation margin with all of their counterparties who are financial end-users.

The minimum variation margin amount is the daily mark-to-market change in the value of the swap, taking into account the amount of variation margin previously posted or collected.

Swap Entities are required to exchange initial margin with their financial end-users who have “material swaps exposure” (i.e., an average daily aggregate notional of $8 billion or more in non-cleared swaps calculated in accordance with the Margin Rules).

The Margin Rules specify the types of collateral that may be posted or collected as initial margin or variation margin (generally cash, certain government, government-sponsored enterprise securities, certain liquid debt, certain equity securities, certain eligible publicly traded debt, and gold) and sets forth haircuts for certain collateral asset classes.

UNL is not a Swap Entity under the Margin Rules, but is a financial end-user.

Accordingly, UNL will be subject to the variation margin requirements of the Margin Rules for any swaps that it enters into.

However, UNL does not have material swaps exposure and, accordingly, no will not be subject to the initial margin requirements of the Margin Rules.

Mandatory Trading and Clearing of Swaps

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Currently, swap dealers, major swap participants, commodity pools, certain private funds and entities predominantly engaged in activities that are financial in nature are required to execute on a swap execution facility, and clear, certain interest rate swaps and index-based credit default swaps.

As a result, if UNL enters into an interest rate or index-based credit default swap that is subject to these requirements, such swap will be required to be executed on a swap execution facility and centrally cleared.

Mandatory clearing and “made available to trade” determinations with respect to additional types of swaps are expected in the future, and, when finalized, could require UNL to electronically execute and centrally clear certain OTC instruments presently entered into and settled on a bi-lateral basis.

If a swap is required to be cleared, initial

and variation margin requirements are set by the relevant clearing organization, subject to certain regulatory requirements and guidelines.

Additional margin may be required and held by UNL’s FCMs.

As a result, if a Trust enters into an interest rate or index-based credit default swap that is subject to these requirements, such swap will be required to be executed on a swap execution facility and centrally cleared.

Mandatory clearing and “made available to trade” determinations with respect to additional types of swaps may be issued in the future, and, when finalized, could require UNL to electronically execute and centrally clear certain OTC instruments presently entered into and settled on a bi-lateral basis.

If a swap is required to be cleared, initial and variation margin requirements are set by the relevant clearing organization, subject to certain regulatory requirements and guidelines.

Additional margin may be required and held by UNL’s FCM.

Other Requirements for Swaps

In addition to the margin requirements described above, swaps that are not required to be cleared and executed on a SEF but that are executed bilaterally are also subject to various requirements pursuant to CFTC regulations, including, among other things, reporting and recordkeeping requirements and, depending on the status of the counterparties, trading documentation requirements and dispute resolution requirements.

Swaps that are not required to be cleared and executed on a SEF but that are executed bilaterally are also subject to various requirements pursuant to CFTC regulations, including, among other things, reporting and recordkeeping requirements and, depending on the status of the counterparties, trading documentation requirements and dispute resolution requirements.

Derivatives Regulations in Non-U.S.

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So long as USCF continues to use these trademarks to identify its services, without challenge from any third party, and properly maintains and renews the trademark registrations under applicable laws, rules and regulations;

it will continue to have

indefinite protection for these trademarks under current laws, rules and regulations.

it will continue to have indefinite protection for these trademarks under current laws, rules and regulations.

USCF has been granted two patents Nos.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business