Company: SVIX
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001213900-25-075845
Chunk: 31

Company: VS Trust
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 provides for significant reforms of the OTC
derivative markets, including a requirement to execute certain swap transactions on a CFTC-regulated market and/or to clear such transactions
through a CFTC-regulated central clearing organization. In a standard swap transaction, two parties agree to exchange the returns earned
or realized on a particular predetermined investment, instrument or Index in exchange for a fixed or floating rate of return in respect
of a predetermined notional amount. Transaction or commission costs are reflected in the benchmark level at which the transaction is entered
into. The gross returns to be exchanged are calculated with respect to a notional amount and the benchmark returns to which the swap is
linked. Swap agreements do not involve the delivery of underlying instruments.

Generally, swap agreements entered into by the
Funds calculate and settle the obligations of the parties to the agreement on a “net basis” with a single payment. Consequently,
each Fund’s current obligations (or rights) under a swap agreement will generally be equal only to the net amount to be paid or
received under the agreement based on the relative values of such obligations (or rights) (the “net amount”). In a typical
swap agreement entered into by UVIX, the would be entitled to settlement payments in the event the level of the benchmark increases and
would be required to make payments to the swap counterparties in the event the level of the benchmark decreases, adjusted for any transaction
costs or trading spreads on the notional amount the Funds may pay. In a typical swap agreement entered into by SVIX, the Fund would be
required to make payments to the swap counterparties in the event the level of the benchmark increases and would be entitled to settlement
payments in the event the level of the benchmark decreases, adjusted for any transaction costs or trading spreads on the notional amount
the Funds may pay.

F-20

The net amount of the excess, if any, of each Fund’s
obligations over its entitlements with respect to each OTC swap agreement is accrued on a daily basis and an amount of cash and/or securities
having an aggregate value at least equal to such accrued excess is maintained for the benefit of the counterparty in a segregated account
by the Funds’ Custodian. The net amount of the excess, if any, of each Fund’s entitlements over its obligations with respect
to each OTC swap agreement is accrued on a daily basis and an amount of cash and/or securities having an aggregate value at least equal
to such accrued excess is