8 unchanged sentences
OTC Contract Risk
−Removed: USO may purchase OTC Oil Interests, such as forward contracts or swap or spot contracts.
+Added: USO may purchase OTC contracts, such as forward contracts or swap or spot contracts.
Unlike most exchange-traded futures contracts or exchange-traded options on such futures, each party to an OTC swap bears the credit risk that the other party may not be able to perform its obligations under its contract.
11 unchanged sentences
To reduce the credit risk that arises in connection with such contracts, USO will generally enter into an agreement with each counterparty based on the Master Agreement published by the International Swaps and Derivatives Association that provides for the netting of its overall exposure to its counterparty, if the counterparty is unable to meet its obligations to USO due to the occurrence of a specified event, such as the insolvency of the counterparty.
−Removed: USCF assesses or reviews, as appropriate, the creditworthiness of each potential or existing counterparty to an OTC swap pursuant to guidelines approved by USCF’s board of directors (the "Board").
+Added: USCF assesses or reviews, as appropriate, the creditworthiness of each potential or existing counterparty to an OTC swap pursuant to guidelines approved by the Board.
Furthermore, USCF on behalf of USO only enters into OTC swaps with counterparties who are, or are affiliates of, (a) banks regulated by a United States federal bank regulator, (b) broker-dealers regulated by the SEC, (c) insurance companies domiciled in the United States, or (d) producers, users or traders of energy, whether or not regulated by the CFTC.
6 unchanged sentences
As a result, it may be difficult to obtain an independent value for an outstanding OTC derivatives transaction.
−Removed: During the reporting period of this annual report on Form 10-K, USO limited its OTC activities to EFRP transactions.
+Added: During the reporting period of this annual report on Form 10-K, USO has limited its derivatives activities to Oil Futures Contracts and EFRP transactions.
USO anticipates that the use of Other Oil-Related Investments together with its investments in Oil Futures Contracts will produce price and total return results that closely track the investment goals of USO.
However, there can be no assurance of this.
−Removed: OTC swaps may result in higher transaction-related expenses than the brokerage commissions paid in connection with the purchase of Oil Futures Contracts, which may impact USO’s ability to successfully track the Benchmark Oil Futures Contract.
+Added: OTC swaps may result in higher transaction-related expenses than the brokerage commissions paid in connection with the purchase of Oil Futures Contracts, which may impact USO’s ability to successfully track the Benchmark Oil Futures Contracts.
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.