PowerShares DB US Dollar Index Bullish Fund just came out with a new prospectus, available here. This is an SEC requirement for firms looking to issue certain types of securities. An excerpt of the prospectus is provided below:
Proceeds of the offering of the Shares are used by the Fund to engage in the trading of DX Contracts, which are exchange-traded futures on its Index with a view to tracking the changes, whether positive or negative, in the level of the Index over time, less the expenses of the operations of the Fund. Approximately 1.11% of the Funds NAV is posted as collateral with respect to its holdings of DX Contracts as of Sept ember 30, 2016. Collateral requirements are initially set by the applicable futures exchange. The Commodity Broker applies an additional collateral requirement based on a number of factors, including, but not limited to, volatility, concentration, percentage of open interest, and position size with respect to the Funds DX Contracts. For purposes of calculating the approximate percentage of the Funds NAV that was posted as collateral, the Funds aggregate assets under management reflected the sum of the Funds holdings of Treasury Securities, money market mutual funds, cash and the value of the DX Contracts that have been marked to market as of September 30, 2016.
The changes in market value over time, whether positive or negative, of the DX Contracts are related to the changes, whether positive or negative, in the level of the U.S. Dollar Index (USDX®), or the USDX®. The USDX®, and in turn, the Index, provides a general indication of the international value of the U.S. dollar relative to the six major world currencies, or Index Currencies, which comprise the USDX® Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.
The Funds portfolio also holds United States Treasury Securities for deposit with the Funds Commodity Broker as margin and United States Treasury Securities, cash and money market mutual funds (affiliated or otherwise) for deposit with the Funds Custodian (for cash management purposes). and may be held by the Funds Commodity Broker as margin, to the extent permissible under CFTC rules.
To the extent, if any, that the Fund trades in futures contracts on United States exchanges, the assets deposited by the Fund with its Commodity Broker as margin must be segregated pursuant to the regulations of the CFTC. Such segregated funds may be invested only in a limited range of instruments principally U.S. government obligations.
The above information was disclosed in a filing to the SEC. To see the filing, click here.
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