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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”).
−Removed: 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”), USCF Sustainable Battery Metals Strategy Fund (“ZSB”), USCF Energy Commodity Strategy Absolute Return Fund (“USE”), USCF Sustainable Commodity Strategy Fund (“ZSC”), and USCF Aluminum Strategy Fund (“ALUM”), each a series of the USCF ETF Trust.
+Added: 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 (“USG”), USCF Sustainable Battery Metals Strategy Fund (“ZSB”), USCF Energy Commodity Strategy Absolute Return Fund (“USE”), and USCF Sustainable Commodity Strategy Fund (“ZSC”), 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”).
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USCF serves as the general partner of USO.
−Removed: USCF also serves as the general partner of the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”), the United States Gasoline Fund, LP (“UGA”), which listed their limited partnership shares on the American Stock Exchange (the “AMEX”) under the ticker symbols “UNG” on April 18, 2007, “USL” on December 6, 2007 and “UGA” on February 26, 2008, respectively.
+Added: USCF also serves as the general partner of the United States Natural Gas Fund, LP (“UNG”), the United States 12 Month Oil Fund, LP (“USL”), the United States Gasoline Fund, LP (“UGA”), which listed their limited partnership shares on the American Stock Exchange
+Added: (the “AMEX”) under the ticker symbols “UNG” on April 18, 2007, “USL” on December 6, 2007 and “UGA” on February 26, 2008, respectively.
As a result of the acquisition of the AMEX by NYSE Euronext, each of UNG’s, USL’s and UGA’s shares commenced trading on the NYSE Arca on November 25, 2008.
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The daily holdings of USO are available on USO’s website at www.uscfinvestments.com.
−Removed: Prior to the Spring of 2020, USO achieved its investment objective by primarily investing in the Benchmark Oil Futures Contract and Oil Futures Contracts for light, sweet crude oil traded on NYMEX and ICE Futures with the same maturity month as the Benchmark Oil Futures Contract.
+Added: Prior to the Spring of 2020, USO has achieved its investment objective by primarily investing in the Benchmark Oil Futures Contract and Oil Futures Contracts for light, sweet crude oil traded on NYMEX and ICE Futures with the same maturity month as the Benchmark Oil Futures Contract.
In the Spring of 2020, significant market volatility occurred in the crude oil markets and the oil futures markets.
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These conditions severely limited USO’s ability to have a substantial portion of its assets invested in the Benchmark Oil Futures Contract and certain other Oil Futures Contracts of the same month, such as cash-settled, but substantially similar, oil futures contracts traded on ICE Futures (the “ICE WTI Contract”).
−Removed: Accordingly, USO invested, and since then has continued to invest, in other permitted Oil Futures Contracts with expirations in later months than the Benchmark Oil Futures Contract.
−Removed: USO also invested, and has continued to invest, in other permitted investments, including Other Oil-Related Investments, including OTC swaps.
In addition, during the Spring of 2020, USO had to rebalance and adjust the types of holdings in its portfolio more frequently than it had in the past.
−Removed: Beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO began transitioning its investment portfolio so that it primarily invests in Benchmark Oil Futures Contracts, consistent with USO’s investment strategy prior to the Spring of 2020.
−Removed: However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.
+Added: Accordingly, USO invested in other permitted Oil Futures Contracts with expirations in later months than the Benchmark Oil Futures Contract.
+Added: USO also invested, and has continued to invest, in other permitted investments, including Other Oil-Related Investments, including OTC swaps.
+Added: Beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO transitioned its investment portfolio to primarily invest in the Benchmark Oil Futures Contract, consistent with USO’s investment strategy prior to the Spring of 2020.
+Added: However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions (including but not limited to those allowing USO to obtain greater liquidity (i.e., liquidity requirements) or to execute transactions with more favorable pricing), regulatory requirements (including, but not limited to, exchange accountability levels and position limits imposed by NYMEX as well as statutory or regulatory limits), risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.
USO may invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract, and/or Other Oil-Related Investments, as a result or in response to any of the foregoing factors.
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Each month over a ten-day period, USO changes the Benchmark Oil Futures Contract, which at the beginning of the month is the futures contract on light, sweet crude oil as traded on the NYMEX that is the near or front month to expire (referred to herein as the first month), into the NYMEX futures contract that is the next month contract to expire (referred to herein as the second month).
−Removed: Historically, this was done over a four-day period at the end of which the Benchmark Oil Futures Contract was the next month contract to expire at that time and that contract remained the Benchmark Oil Futures Contract until the beginning of the following month’s change in the
−Removed: Benchmark Oil Futures Contract over a four-day period.
−Removed: On each day during the four-day period, USCF “rolled” USO’s positions in Oil Interests by closing, or selling, a percentage of USO’s positions in Oil Interests and reinvesting the proceeds from closing those positions in new Oil Interests that reflected the change in the Benchmark Oil Futures Contract.
−Removed: In the past, during the four-day period, USO has rolled its positions in Oil Futures Contracts in the first month prior to the end of the month to avoid such contracts’ expiration and having to take delivery of the underlying commodity.
−Removed: USO continues this monthly roll process with respect to its portfolio holdings, notwithstanding that its investments may not be concentrated in the first month futures contract, as is the case as of the date of this 10-K (but which may not be the case in the future when USO’s futures holdings will primarily consist of the near month Benchmark Oil Futures Contract).
−Removed: Currently, USO rolls and rebalances its portfolio to:
−Removed: (1) sell the earliest month of the futures contracts that it holds, (2) rebalance its portfolio in a manner that allows it to meet market conditions, regulatory requirements and other factors described herein, and (3) structure its investments within the foregoing limits in a way that allows USO to best pursue its stated investment objective.
−Removed: In May of 2020, USO extended the monthly roll/rebalancing period from a four-day period to a ten-day period due to the size and diversification of its portfolio holdings and to address regulatory concerns.
−Removed: During the ten-day roll or rebalance period, USO will close certain existing positions, e.g., when it changes the Benchmark Oil Futures Contract and sells contracts that will expire at the end of the month, or when it sells Oil Futures Contracts to address the market conditions, regulatory requirements and other factors discussed herein, and reinvests the proceeds in new Oil Futures Contracts or Other Oil-Related Investments.
−Removed: The change from a four-day roll to a ten-day roll, whether or not USO holds any Benchmark Oil Futures Contacts at the time of the roll, did not change USO’s benchmark or its investment objective other than as described herein.
The Benchmark Oil Futures Contract remains the futures contract on light, sweet crude oil as traded on the NYMEX for the first month before the roll period.
During the roll period, the Benchmark Oil Futures Contract will proportionately change each day of the roll to the futures contract on light, sweet crude oil as traded on the NYMEX for the second month, until the roll is completed.
+Added: On each day over a ten-day period, USCF “rolls” USO’s positions in Oil Interests by closing, or selling, a percentage of USO’s positions in Oil Interests and reinvesting the proceeds from closing those positions in new Oil Interests that reflected the change in the Benchmark Oil Futures Contract.
+Added: USO rolls its positions in Oil Futures Contracts in the first month prior to the end of the month to avoid such contracts’ expiration and having to take delivery of the underlying commodity.
+Added: The change from a four-day roll to a ten-day roll, whether or not USO holds any Benchmark Oil Futures Contacts at the time of the roll, did not change USO’s benchmark or its investment objective other than as described herein.
+Added: The Benchmark Oil Futures Contract
+Added: remains the futures contract on light, sweet crude oil as traded on the NYMEX for the first month before the roll period.
+Added: During the roll period, the Benchmark Oil Futures Contract will proportionately change each day of the roll to the futures contract on light, sweet crude oil as traded on the NYMEX for the second month, until the roll is completed.
Typically, on each day during the ten-day roll period, USO intends to rebalance approximately 1/10th of the announced percentage of the notional value of its nearest month instrument and other specified instruments (which could be 100% of such notional value of such interests) and reinvest the proceeds in the remaining current portfolio holdings as well as further-dated contracts and any new specified portfolio holdings.
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USO’s assets used for margin and collateral are held in segregated accounts pursuant to the Commodity Exchange Act (the “CEA”) and CFTC regulations.
−Removed: As described above, beginning with the monthly roll in September 2023 and ending with the monthly roll in January 2024, USO began transitioning its investment portfolio so that it primarily invests in Benchmark Oil Futures Contracts, consistent with USO’s investment strategy prior to 2020.
−Removed: However, USO has had, and will continue to have, the ability to invest in Oil Futures Contracts beyond the Benchmark Oil Futures Contract and Other Oil-Related Investments, such as OTC swaps, and USO may make such investments if market conditions, regulatory requirements, risk mitigation measures (including those that may be taken by USO, USO’s FCMs, counterparties or other market participants), liquidity requirements, or other factors require USO to do so in order to meet its investment objective.
−Removed: USO’s holdings could change as a result of any or all of the following:
−Removed: ● the need to comply with regulatory requirements (including, but not limited to, exchange accountability levels and position limits imposed by NYMEX as well as statutory or regulatory limits);
−Removed: ● market conditions (including but not limited to those allowing USO to obtain greater liquidity (i.e., liquidity requirements) or to execute transactions with more favorable pricing);
−Removed: ● risk mitigation measures, including those that may be taken by USO, USO’s FCMs, counterparties or other market participants, that limit USO from investing in particular crude oil futures contracts.
−Removed: These conditions could limit USO’s ability to have a substantial portion of its assets invested in the Benchmark Oil Futures Contract and certain other Oil Futures Contracts of the same month, such as the ICE WTI Contract.
Creation and Redemption Baskets .
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By remaining invested as fully as possible in Oil Futures Contracts or Other Oil-Related Investments, USCF believes that the daily changes in percentage terms of USO’s NAV will continue to closely track the daily changes in percentage terms in the price of the Benchmark Oil Futures Contract.
−Removed: USCF believes that certain arbitrage opportunities result in the price of the shares traded on the NYSE Arca closely tracking the per share NAV of USO.
+Added: USCF believes that certain arbitrage opportunities result in the price of the shares traded on the NYSE Arca on a percentage basis, closely tracking the per share NAV of USO.
Additionally, daily changes in the price of the Benchmark Oil Futures Contracts have closely tracked the daily changes in the spot price of light, sweet crude oil.
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USO seeks to invest in a combination of Oil Interests such that the daily changes in its NAV, measured in percentage terms, will closely track the daily changes in the price of the Benchmark Oil Futures Contract, also measured in percentage terms.
−Removed: As a specific benchmark, USCF endeavors to place USO’s trades in Oil Interests and otherwise manage USO’s investments so that “A” will be within plus/minus ten percent (10%) of “B”, where:
+Added: As a specific benchmark,
+Added: USCF endeavors to place USO’s trades in Oil Interests and otherwise manage USO’s investments so that “A” will be within plus/minus ten percent (10%) of “B”, where:
● A is the average daily percentage change in USO’s per share NAV for any period of 30 successive valuation days;
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However, investors should be aware that USO would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Oil Futures Contract provided that the average daily percentage change in USO’s NAV over 30 successive valuation days is within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.
−Removed: performance data relating to USO’s ability to track its benchmark, see “ Item 7.
+Added: For performance data relating to USO’s ability to track its benchmark, see “ Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Tracking USO’s Benchmark ” in this annual report on Form 10-K.
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While USCF has made significant investments in NYMEX Oil Futures Contracts, for various reasons, including the ability to enter into the precise amount of exposure to the crude oil market, position limits or other regulatory requirements limiting USO’s holdings, and market conditions, it has and may continue to invest in Oil Futures Contracts traded on other exchanges and invest in Other Oil-Related Investments.
−Removed: To the extent that USO invests in Other Oil-Related Investments, it prioritizes investments in contracts and instruments that are economically equivalent to the Benchmark Oil Futures Contract, including cleared swaps that satisfy such criteria, and then, to a lesser extent, it may invest in other types of cleared swaps and other contracts, instruments and non-cleared swaps, such as swaps in the over-the-counter market (or commonly referred to as the “OTC market”).
+Added: To the extent that USO invests in Other Oil-Related Investments, it would prioritizes investments in contracts and instruments that are economically equivalent to the Benchmark Oil Futures Contract, including cleared swaps that satisfy such criteria, and then, to a lesser extent, it may invest in other types of cleared swaps and other contracts, instruments and non-cleared swaps, such as swaps in the over-the-counter market (or commonly referred to as the “OTC market”).
If USO is required by law or regulation, or by one of its regulators, including a futures exchange, to reduce its position in the Benchmark Oil Futures Contracts to the applicable position limit or to a specified accountability level or if market conditions dictate it would be more appropriate to invest in Other Oil-Related Investments, a substantial portion of USO’s assets could be invested in accordance with such priority in Oil Futures Contracts other than the Benchmark Oil Futures Contract or oil futures contracts issued by NYMEX and ICE Futures with the same months and Other Oil-Related Investments that are intended to replicate the return on the Benchmark Oil Futures Contract.
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These levels and position limits apply to the futures contracts that USO invests in to meet its investment objective.
−Removed: In addition to accountability levels and position limits, the NYMEX and ICE Futures may also set daily price limits on futures contracts.
+Added: In addition to accountability levels and position limits, the NYMEX and ICE Futures also set daily price limits on futures contracts.
The daily price fluctuation limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day’s settlement price.
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In addition, the NYMEX imposes an accountability level for all months of 20,000 net futures contracts for light, sweet crude oil.
−Removed: In addition, the ICE Futures Europe maintains the same accountability levels, position limits and monitoring authority for its futures contracts for light, sweet crude oil contract as the NYMEX.
+Added: In addition, the ICE Futures Europe maintains the same accountability levels, position limits and monitoring authority for its future contracts for light, sweet crude oil contract as the NYMEX.
If USO and the Related Public Funds exceed these accountability levels for investments in the futures contracts for light, sweet crude oil, the NYMEX and ICE Futures Europe will monitor such exposure and may ask for further information on their activities, including the total size of all positions, investment and trading strategy, and the extent of liquidity resources of USO and the Related Public Funds.
−Removed: If deemed necessary by the NYMEX and/or ICE Futures Europe, USO could be ordered to reduce its net futures contracts back to the accountability level.
+Added: If deemed necessary by the NYMEX
+Added: and/or ICE Futures Europe, USO could be ordered to reduce its net futures contracts back to the accountability level.
As of December 31, 2024, USO held 11,084 NYMEX WTI Crude Oil Futures CL contracts and did not hold any ICE WTI Crude Oil Futures contracts.
−Removed: USO exceeded accountability levels of the NYMEX during the year ended December 31, 2023, including when it held a maximum of 21,570 Crude Oil Futures CL contracts, on the NYMEX, exceeding the “any” month limit.
−Removed: Position limits differ from accountability levels in that they represent fixed limits on the maximum number of futures contracts that any person may hold and cannot be exceeded without express CFTC authority to do so.
+Added: USO exceeded accountability levels of the NYMEX during the year ended December 31, 2024, including when it held a maximum of 18,287 Crude Oil Futures CL contracts, on the NYMEX, exceeding the “any one” month limit.
+Added: Position limits differ from accountability levels in that they represent fixed limits on the maximum number of futures contracts that any person may hold and cannot to be exceeded without express CFTC authority to do so.
In addition to accountability levels and position limits that may apply at any time, the NYMEX and ICE Futures impose position limits on contracts held in the last few days of trading in the near month contract to expire.
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USO seeks to achieve its investment objective by investing so that the average daily percentage change in USO’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.
−Removed: As a result, investors should be aware that USO would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Oil Futures Contract provided that the average daily percentage change in USO’s NAV over 30 successive valuation days is within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period.
+Added: As a result, investors should be aware that USO would meet its investment objective even if there are significant deviations between changes in its daily NAV and changes in the daily price of the Benchmark Oil Futures Contract provided that the average daily percentage change in USO’s NAV over 30 successive valuation days is within plus/minus ten percent (10%) of the average daily percentage change in the
+Added: price of the Benchmark Oil Futures Contract over the same period.
USO’s investment strategy is designed to provide investors with a cost-effective way to invest indirectly in crude oil and to hedge against movements in the spot price of light, sweet crude oil.
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USO earns income from the Treasuries and/or cash equivalents that it purchases, and on the cash it holds through the Custodian or FCM.
−Removed: anticipates that the earned income will increase the NAV and limited partners’ capital contribution accounts.
+Added: USO anticipates that the earned income will increase the NAV and limited partners’ capital contribution accounts.
USO reinvests the earned income, holds it in cash, or uses it to pay its expenses.
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USO 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.
−Removed: During the reporting period of this annual report on Form 10-K, USO’s OTC transactions comprised OTC swaps intended to reflect the return on USO’s investments in Oil Futures Contracts and EFRP transactions.
+Added: During the reporting period of this annual report on Form 10-K, USO’s OTC derivatives activities comprised OTC swaps intended to reflect the return on USO’s investments in Oil Futures Contracts and EFRP transactions.
USO 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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USCF pays the fees of BNY Mellon for its services under the BNY Mellon Agreements and such fees are determined by the parties from time to time.
−Removed: Brown Brothers Harriman and Co.
−Removed: (“BBH&Co.”) previously served as the Administrator, Custodian, Transfer Agent and Fund Accounting Agent for USO and the Related Public Funds prior to BNY Mellon commencing such services on April 1, 2020.
−Removed: Certain fund accounting and fund administration services rendered by BBH&Co.
−Removed: to USO and the Related Public Funds terminated on May 31, 2020 to allow for the transition to BNY Mellon.
Marketing Agent
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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.
−Removed: Beginning in 2015, putative class actions were brought against RBC Capital
−Removed: and/or Royal Bank of Canada, RBC Capital’s indirect parent, in the U.S.
+Added: 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.
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Securities and Exchange Commission as a broker-dealer, with the CFTC as an introducing broker, and is a member of FINRA and other regulatory agencies and exchanges.
−Removed: In the normal course of its regulated business activities, BTIG receives examinations, subpoenas, and inquiries from the regulatory organizations that oversee its various business activities.
+Added: In the normal course of its
+Added: regulated business activities, BTIG receives examinations, subpoenas, and inquiries from the regulatory organizations that oversee its various business activities.
From January 2017 through December 2022, BTIG has not been involved in any material litigation.
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On November 30, 2021, USO entered into an ISDA 2002 Master Agreement (the “Macquarie ISDA”) with Macquarie Bank Limited, pursuant to which Macquarie Bank Limited has agreed to serve as an over-the-counter (“OTC”) swaps counterparty for USO.
−Removed: OTC swap transactions outstanding under the Macquarie ISDA, if any, along with USO’s other holdings, are posted on USO’s webpage, www.uscfinvestments.com.
+Added: USO’s OTC swap transactions outstanding under the Macquarie ISDA, if any, along with USO’s other holdings, are posted on USO’s webpage, www.uscfinvestments.com.
Macquarie Bank Limited’s principal address is Ropemaker Place, 28 Ropemaker Street, London, EC2Y 9HD, England.
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Plaintiffs have appealed those rulings to the Second Circuit.
−Removed: In Argentina, Société Générale S.A., along with other financial institutions, has been named as a defendant in litigation brought by a consumer association on behalf of Argentine consumers who held government bonds or other specified instruments that paid interest
−Removed: tied to US Dollar LIBOR.
+Added: In Argentina, Société Générale S.A., along with other financial institutions, has been named as a defendant in litigation brought by a consumer association on behalf of Argentine consumers who held government bonds or other specified instruments that paid interest tied to US Dollar LIBOR.
The allegations concern violations of Argentine consumer protection law in connection with alleged manipulation of the US Dollar LIBOR rate.
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acting as an OTC swaps counterparty to USO.
+Added: The Bank of Nova Scotia
+Added: On August 5, 2024, USO entered into an ISDA 2002 Master Agreement (the “ScotiaBank ISDA”) with The Bank of Nova Scotia, pursuant to which The Bank of Nova Scotia has agreed to serve as an over-the-counter (“OTC”) swaps counterparty for USO.
+Added: The ScotiaBank ISDA provides USO the ability to invest in OTC swaps in furtherance of its investment objective.
+Added: USO may enter into OTC swap transactions with The Bank of Nova Scotia under the ScotiaBank ISDA in the future.
+Added: USO’s OTC swap transactions outstanding under the ScotiaBank ISDA, if any, along with USO’s other holdings, will be posted on USO’s webpage, www.uscfinvestments.com.
+Added: The Bank of Nova Scotia’s principal address is 40 Temperance St., 7th Floor, Toronto, Ontario, Canada M5H 1H1.
+Added: The Bank of Nova Scotia is registered with the CFTC as a swap dealer.
+Added: The Bank of Nova Scotia is a large swap dealer subject to many different complex legal and regulatory requirements.
+Added: As a result, certain of The Bank of Nova Scotia’s regulators may from time to time conduct investigations, initiate enforcement proceedings and/or enter into settlements with The Bank of Nova Scotia with respect to issues raised in various investigations.
+Added: In addition, The Bank of Nova Scotia is and has been subject to a variety of civil legal claims in various jurisdictions, a variety of settlement agreements and a variety of orders, awards and judgments made against it by courts and tribunals, both in regard to such claims and investigations.
+Added: Listed below are the civil, administrative, and/or criminal proceedings pending, on appeal, or concluded by The Bank of Nova Scotia in the past five (5) years that are material to The Bank of Nova Scotia serving as an OTC swaps counterparty to USO.
+Added: On May 11, 2023 the Commodity Futures Trading Commission issued an order simultaneously filing and settling charges against The Bank of Nova Scotia and its affiliate, Scotia Capital USA Inc.
+Added: (a futures commission merchant).
+Added: The order charged The Bank of Nova Scotia and Scotia Capital USA Inc.
+Added: with failing to maintain, preserve, or produce records that were required to be kept under Commodity Futures Trading Commission recordkeeping requirements and failing to diligently supervise matters related to their businesses as Commodity Futures Trading Commission registrants.
+Added: Pursuant to the Commodity Futures Trading Commission’s order, the charges are attributable to the use of unapproved communication methods, including messages sent via personal text and WhatsApp by The Bank of Nova Scotia and Scotia Capital USA Inc.
+Added: The Bank of Nova Scotia and Scotia Capital USA Inc.
+Added: agreed to pay a $15
+Added: million penalty to settle the charges with the Commodity Futures Trading Commission.
+Added: The Securities and Exchange Commission issued a parallel order on May 11, 2023 against Scotia Capital USA Inc.
+Added: for the failure to maintain and preserve electronic communications, also attributable to the use of unapproved communication methods.
+Added: Scotia Capital USA Inc.
+Added: agreed to pay a $7.5 million penalty to settle the charges with the Securities and Exchange Commission.
+Added: On August 19, 2020, the Commodity Futures Trading Commission filed and settled charges against The Bank of Nova Scotia for swap dealer compliance failures, failing to supervise its swap dealer activities diligently, and making false or misleading statements to Commodity Futures Trading Commission staff during the course of that agency’s enforcement investigation.
+Added: The order found that, at various times between December 31, 2012 and August 19, 2020 The Bank of Nova Scotia failed to comply with swap dealer business conduct standards requirements for pre-trade mid-market marks by providing counterparties with marks that were inaccurate, untimely, or both, or failing to provide marks entirely.
+Added: The order also found that The Bank of Nova Scotia’s counterparty onboarding process, pre-trade mid-market marks and audio recordkeeping, and chief compliance officer failed to comply with the Commodity Exchange Act and Commodity Futures Trading Commission regulations and that The Bank of Nova Scotia failed to supervise its swap dealer activities diligently.
+Added: To settle the charges with the Commodity Futures Trading Commission The Bank of Nova Scotia agreed to pay a $50 million penalty, remediate the compliance failures, and retain an outside monitor for three years.
+Added: In April 2024 the Commodity Futures Trading Commission issued an addendum to its order to extend the period within which The Bank of Nova Scotia must have a monitor in place by six months.
+Added: On August 19, 2020, the Commodity Futures Trading Commission filed and settled charges against The Bank of Nova Scotia for several of its traders’ placement of orders to buy or sell certain gold and silver futures contracts traded on the Commodity Exchange Inc.
+Added: with the intent to cancel those orders before execution (i.e., “spoofing”).
+Added: The Bank of Nova Scotia had previously been fined $800,000 in a 2018 Commodity Futures Trading Commission order for spoofing in the gold and silver futures markets but, according to the August 19, 2020 order, the 2018 order did not take into account the full scope of the spoofing behavior due to statements made The Bank of Nova Scotia in connection with the 2018 order that that were later proven to be false (the August 19, 2020 order alleges that the false statements were in part due to incomplete and inconsistent recordkeeping).
+Added: Accordingly, the August 19, 2020 order was intended to address the broader scope of spoofing behavior.
+Added: To settle the charges with the Commodity Futures Trading Commission The Bank of Nova Scotia agreed to pay a $42 million penalty, disgorgement of $11,828,912, and restitution in the amount of $6,622,190.
+Added: In a parallel action, the United States Department of Justice announced entry of a Deferred Prosecution Agreement with The Bank of Nova Scotia, deferring criminal prosecution on charges of attempted price manipulation and wire fraud.
+Added: Under the Agreement, The Bank of Nova Scotia agreed to, among other things, pay $60.4 million in criminal fines, forfeiture, and restitution.
+Added: The Commodity Futures Trading Commission’s order provided for offsets for certain payments made pursuant to the related Department of Justice criminal action.
+Added: On August 19, 2020, the Commodity Futures Trading Commission filed and settled charges against The Bank of Nova Scotia for violating sections 6(c)(2) and 9(a)(4) of the Commodity Exchange Act for the misrepresentations and omissions made to the Commission, the Commodity Exchange, Inc.
+Added: and the National Futures Association between April 2016 and October 2017 in connection with spoofing in the precious metals markets, which was the subject of the concurrent August 19, 2020 order described in the immediately preceding paragraph.
+Added: The Bank of Nova Scotia agreed to pay a $17 million penalty to settle the charges with the Commodity Futures Trading Commission
+Added: The Bank of Nova Scotia is not affiliated with USO or USCF.
+Added: Therefore, neither USCF nor USO believes that there will be any conflicts of interest with The Bank of Nova Scotia or its trading principals arising from The Bank of Nova Scotia acting as an OTC swaps counterparty to USO.
Commodity Trading Advisor
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● An investor’s tax liability may exceed the amount of distributions, if any, on its shares.
−Removed: ● An investor’s allocable share of taxable income or loss may differ from economic income or loss on the shares.
+Added: ● An investor’s allocable share of taxable income or loss may differ from its economic income or loss on the shares.
● Items of income, gain, deduction, loss and credit with respect to shares could be reallocated for U.S.
7 unchanged sentences
federal income tax laws on USO is uncertain.
−Removed: ● USO will be subject to credit risk with respect to counterparties to OTC contracts entered into by USO or held by special purpose or structured vehicles.
+Added: ● USO will be subject to credit risk with respect to counterparties to OTC contracts entered into by USO.
● Valuing OTC derivatives may be less certain than actively traded financial instruments.
109 unchanged sentences
settlement prices of Oil Futures Contracts traded on the NYMEX and ICE Futures, which are the same prices used for valuing such contracts in determining USO’s official end of day NAV.
−Removed: Therefore, a static indicative fund value is disseminated
−Removed: between the time the settlement price is published (at approximately 2:30 p.m.
+Added: Therefore, a static indicative fund value is disseminated between the time the settlement price is published (at approximately 2:30 p.m.
Eastern time) for NYMEX and ICE Futures and the close of the NYSE Arca core trading session.
5 unchanged sentences
While the end of day value of Treasuries, cash and cash equivalents are included in USO’s prior end of day NAV, to which changes in the value of Oil Futures Contracts and Other Oil-Related Investments are applied in calculating the indicative fund value, intraday changes in the value of Treasuries, cash and cash equivalents are not applied in calculating the indicative fund value ICE Data Indices, LLC disseminates the indicative fund value through the facilities of CTA/CQ High Speed Lines.
−Removed: In addition, the indicative fund value is available through online information services such as Bloomberg and Reuters.
+Added: In addition, the indicative fund value is available through
+Added: online information services such as Bloomberg and Reuters.
Dissemination of the indicative fund value provides additional information that is not otherwise available to the public and is useful to investors and market professionals in connection with the trading of USO shares on the NYSE Arca.
28 unchanged sentences
On any business day, an Authorized Participant may place an order with the Marketing Agent to create one or more baskets.
−Removed: For purposes of processing purchase and redemption orders, a “business day” means any day other than a day when any of the NYSE Arca, the NYMEX or the NYSE is closed for regular trading.
+Added: For purposes of processing purchase and redemption orders, a “business day” means any day other than a day when any of the NYSE Arca, the
+Added: NYMEX or the NYSE is closed for regular trading.
Purchase orders must be placed by 12:00 p.m.
18 unchanged sentences
The expense and risk of delivery and ownership of Treasuries until such Treasuries have been received by the Custodian on behalf of USO shall be borne solely by the Authorized Participant.
−Removed: Because orders to purchase baskets must be placed by 12:00 p.m., New York time, but the total payment required to create a basket during the continuous offering period will not be determined until after 4:00 p.m., New York time, on the date the purchase order is
−Removed: received, Authorized Participants will not know the total amount of the payment required to create a basket at the time they submit an irrevocable purchase order for the basket.
+Added: Because orders to purchase baskets must be placed by 12:00 p.m., New York time, but the total payment required to create a basket during the continuous offering period will not be determined until after 4:00 p.m., New York time, on the date the purchase order is received, Authorized Participants will not know the total amount of the payment required to create a basket at the time they submit an irrevocable purchase order for the basket.
USO’s per share NAV and the total amount of the payment required to create a basket could rise or fall substantially between the time an irrevocable purchase order is submitted and the time the amount of the purchase price in respect thereof is determined.
24 unchanged sentences
The redemption distribution from USO consists of a transfer to the redeeming Authorized Participant of an amount of Treasuries and/or cash that is in the same proportion to the total assets of USO (net of estimated accrued but unpaid fees, expenses and other liabilities) on the date the order to redeem is properly received as the number of shares to be redeemed under the redemption order is in proportion to the total number of shares outstanding on the date the order is received.
−Removed: USCF, directly or in consultation with the Administrator, determines the requirements for Treasuries and the amounts of cash, including the maximum permitted remaining maturity of a Treasury,
−Removed: and the proportions of Treasuries and cash that may be included in distributions to redeem baskets.
+Added: USCF, directly or in consultation with the Administrator, determines the requirements for Treasuries and the amounts of cash, including the maximum permitted remaining maturity of a Treasury, and the proportions of Treasuries and cash that may be included in distributions to redeem baskets.
The Marketing Agent will publish an estimate of the redemption distribution per basket as of the beginning of each business day.
26 unchanged sentences
As noted, USO creates and redeems shares from time to time, but only in one or more Creation Baskets or Redemption Baskets.
−Removed: The creation and redemption of baskets are only made in exchange for delivery to USO or the distribution by USO of the amount of Treasuries and cash represented by the baskets being created or redeemed, the amount of which will be based on the aggregate NAV of the number
−Removed: of shares included in the baskets being created or redeemed determined on the day the order to create or redeem baskets is properly received.
+Added: The creation and redemption of baskets are only made in exchange for delivery to USO or the distribution by USO of the amount of Treasuries and cash represented by the baskets being created or redeemed, the amount of which will be based on the aggregate NAV of the number of shares included in the baskets being created or redeemed determined on the day the order to create or redeem baskets is properly received.
As discussed above, Authorized Participants are the only persons that may place orders to create and redeem baskets.
6 unchanged sentences
Shares trade in the secondary market on the NYSE Arca.
−Removed: Shares may trade in the secondary market at prices that are lower or higher relative to their NAV per share.
+Added: Shares may trade in the secondary market at prices
+Added: that are lower or higher relative to their NAV per share.
The amount of the discount or premium in the trading price relative to the NAV per share may be influenced by various factors, including, among other things, the number of investors who seek to purchase or sell shares in the secondary market, availability of Creation Baskets, the liquidity of the Oil Futures Contracts market and the market for Other Oil-Related Investments.
As an example, on April 21, 2020, the price per of USO shares sold in the secondary market was 36% higher than the end of day per share NAV of USO.
−Removed: This discrepancy was attributable to increased demand for USO shares due to market forces and USO’s having temporarily halted the offer for purchase of Creation Baskets.
+Added: The discrepancy was attributable to increased demand for USO shares due to market forces and USO’s having temporarily halted the offer for purchase of Creation Baskets.
In addition, while USO’s shares trade during the core trading session on the NYSE Arca until 4:00 p.m.
30 unchanged sentences
The CEA provides for varying degrees of regulation of commodity interest transactions depending upon:
−Removed: (1) the type of instrument being traded (e.g., contracts for future delivery, forwards, options, swaps or spot contracts), (2) the type of commodity underlying the instrument (distinctions are made between instruments based on agricultural commodities, energy and metals commodities and financial commodities), (3) the nature of the parties to the transaction (e.g., retail or eligible contract participant), (4) whether the transaction is entered into on a principal-to-principal or intermediated basis, (5) the type of market on which the transaction occurs, and (6) whether the transaction is subject to clearing through a clearing organization.
+Added: (1) the type of instrument being traded (e.g., contracts for future
+Added: delivery, forwards, options, swaps or spot contracts), (2) the type of commodity underlying the instrument (distinctions are made between instruments based on agricultural commodities, energy and metals commodities and financial commodities), (3) the nature of the parties to the transaction (e.g., retail or eligible contract participant), (4) whether the transaction is entered into on a principal-to-principal or intermediated basis, (5) the type of market on which the transaction occurs, and (6) whether the transaction is subject to clearing through a clearing organization.
The offer and sale of shares of USO, as well as shares of each Related Public Fund, is registered under the 1933 Act.
92 unchanged sentences
CFTC regulations require enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures and auditing and examination programs for FCMs.
−Removed: These regulations are intended to afford greater assurances to market participants that customer segregated funds and secured amounts are protected, customers are provided with appropriate notice of the risks of futures trading and of the FCMs with which they may choose to do business, FCMs are monitoring and managing risks in a robust manner, the capital and liquidity of FCMs are strengthened to safeguard the continued operations, and the auditing and examination programs of the CFTC and the self-regulatory organizations are monitoring the activities of FCMs in a thorough manner.
+Added: These regulations are intended to afford greater assurances to market participants that customer segregated funds and secured amounts are protected, customers are provided with appropriate notice of the risks of futures trading and of the FCMs with which they may choose to do business, FCMs are monitoring and managing risks in a robust manner, the capital and liquidity of FCMs are strengthened to safeguard the continued operations, and
+Added: the auditing and examination programs of the CFTC and the self-regulatory organizations are monitoring the activities of FCMs in a thorough manner.
USO’s investors are afforded prescribed rights for reparations under the CEA against USCF (as a registered commodity pool operator), as well as its respective employees who are required to be registered under the CEA.
83 unchanged sentences
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.