Establish Procedures. Procedures applicable to the transfer agent services to be performed hereunder may be established from time to time by agreement between the Trust and Bank. Bank shall have the right to utilize any shareholder accounting and record-keeping systems that, in its reasonable opinion, enables it to perform any services to be performed hereunder. Following are the Services that shall be provided by Bank for the Trust in respect of each ETF Series. Bank shall perform these services in conjunction with the custody services that are provided by Bank, as Custodian, to each ETF Series under the terms of the Custody Agreement. Bank shall be entitled to all the protective provisions in the Custody Agreement in respect of its duties and its performance as Index Receipt Agent and Custodian for the settlement of purchases and redemptions of Creation Units of each ETF Series. A. Index Receipt Agent Services for Bullish ProShares. 1. Bank, with the assistance of the Trust, shall make application to NSCC to be the Index Receipt Agent on behalf of the Trust for the processing, clearance and the settlement of purchase and redemption orders for ETF Shares of each Bullish ProShares and Creation Deposits through the facilities of NSCC and DTC. 2. The Distributor, on behalf of the Trust, shall enter into an Authorized Participant Agreement in the form of Exhibit B hereto with each Authorized Participant, which Bank, in its capacity as Index Receipt Agent, shall acknowledge. 3. In connection with the procedures that may be established from time to time between Bank and the Trust on behalf of each Bullish ProShares for the processing, clearance and settlement of the purchase and redemption of Creation Units of ETF Shares of the applicable ETF Series through the Clearing Process, Bank shall: (a) receive from the Distributor daily, a computer generated file that is in form and substance acceptable to NSCC containing a list of the Deposit Securities for each ETF Series, the Balancing Amount and the Transaction Fee, and transmit the file as received from the Distributor to NSCC; (b) receive from the Distributor on each trade date a computer generated file that is in form and substance acceptable to NSCC and that contains purchase orders from Authorized Participants that have been received and accepted by the Distributor on behalf of the Trust for each ETF Series, for the purchase of Creation Units against delivery of Deposit Securities and a Cash Component; transmit the file of purchase orders as received from the Distributor to NSCC; receive back from NSCC the file of purchase orders enhanced with NSCC generated prices for the Deposit Securities contained in the file and deliver the enhanced file to Custodian for settlement; and, pursuant to such purchase orders, instruct the Transfer Agent to issue the appropriate number of ETF Shares of the applicable ETF Series for deposit to the Custodian’s DTC Participant Account; (c) receive from the Distributor on each trade date a computer generated file that is in form and substance acceptable to NSCC and that contains redemption orders from Authorized Participants that have been received and accepted by the Distributor on behalf of the Trust for each Fund; transmit the file of redemption orders as received from the Distributor to NSCC; receive back from NSCC the file of redemption orders enhanced with NSCC generated prices for the Redemption Securities that are in the file and deliver the enhanced file to Custodian for settlement; and, pursuant to such redemption orders, instruct the Transfer Agent to redeem the appropriate number of ETF Shares of the applicable ETF Series in Creation Units and reduce the account of the Shareholder accordingly; and (d) at the appropriate times, cause to be paid over to Authorized Participants Balancing Amounts on the purchase or redemption of Creation Units, as instructed by the Distributor or the Trust on behalf of each ETF Series. 4. Bank, from time to time, may receive from the Distributor a computer generated file similar in form and content to the file described in Subsection 3(a) above, but meeting NSCC’s requirements for the delivery of a customized basket of Deposit Securities or Redemption Securities, in respect of one or more of the ETF Series. Bank shall transmit this file as received from the Distributor to NSCC. This provision shall not be effective until Bank has built the necessary infrastructure to its systems to accommodate this requirement of Bank. Bank will notify the Trust when it is able to comply with this requirement. 5. The Trust understands and agrees that all risk associated with the processing, clearance and settlement of the purchase and redemption of ETF Shares, Deposit Securities and Redemption Securities and cash through the Clearing Process shall be that of the Trust and each ETF Series, irrespective of whether in effecting such purchases and redemptions for the Trust on behalf of each ETF Series through the Clearing Process, Bank, as a member of NSCC, is acting as principal or as agent; and, in respect hereof, the Trust and each Series, shall be bound by all the rules and procedures of NSCC and DTC as though it were the member or participant of such clearing and settlement systems. B Delivery of Bearish ProShares Creation and Redemption Orders. Purchase and redemption orders for Creation Units for all Bearish ProShares will be transmitted to Bank by Distributor on behalf of the Trust on each trading day in the same computer generated files that contain Bullish ProShares purchase and redemption orders (referred to in paragraphs A3(b) and A3(c) above). Each such purchase and redemption order shall contain the CUSIP number of the particular Bullish and Bearish ProShares. Prior to Bank’s delivery to NSCC of these computer generated files that it has received from Distributor and containing Bullish and Bearish ProShares trades, Bank shall remove from these files by their identifying CUSIP numbers the Bearish ProShares orders at DTC and post these Bearish ProShares orders to Bank’s custody system for settlement to the Bank’s designated participant account at DTC.
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Establish Procedures. Procedures applicable to the transfer agent services to be performed hereunder may be established from time to time by agreement between the Trust and Bank. Bank shall have the right to utilize any shareholder accounting and record-keeping systems that, in its reasonable opinion, enables it to perform any services to be performed hereunder. Following are the Services that shall be provided by Bank for the Trust in respect of each ETF Series. Bank shall perform these services in conjunction with the custody services that are provided by Bank, as Custodian, to each ETF Series under the terms of the Custody Agreement. Bank shall be entitled to all the protective provisions in the Custody Agreement in respect of its duties and its performance as Index Receipt Agent and Custodian for the settlement of purchases and redemptions of Creation Units of each ETF Series.
A. Index Receipt Agent Services for Bullish ProShares.
1. Bank, with the assistance of the Trust, shall make application to NSCC to be the Index Receipt Agent on behalf of the Trust for the processing, clearance and the settlement of purchase and redemption orders for ETF Shares of each Bullish ProShares and Creation Deposits through the facilities of NSCC and DTC.
2. The Distributor, on behalf of the Trust, shall enter into an Authorized Participant Agreement in the form of Exhibit B hereto with each Authorized Participant, which Bank, in its capacity as Index Receipt Agent, shall acknowledge.
3. In connection with the procedures that may be established from time to time between Bank and the Trust on behalf of each Bullish ProShares for the processing, clearance and settlement of the purchase and redemption of Creation Units of ETF Shares of the applicable ETF Series through the Clearing Process, Bank shall:
(a) receive from the Distributor daily, a computer generated file that is in form and substance acceptable to NSCC containing a list of the Deposit Securities for each ETF Series, the Balancing Amount and the Transaction Fee, and transmit the file as received from the Distributor to NSCC;
(b) receive from the Distributor on each trade date a computer generated file that is in form and substance acceptable to NSCC and that contains purchase orders from Authorized Participants that have been received and accepted by the Distributor on behalf of the Trust for each ETF Series, for the purchase of Creation Units against delivery of Deposit Securities and a Cash Component; transmit the file of purchase orders as received from the Distributor to NSCC; receive back from NSCC the file of purchase orders enhanced with NSCC generated prices for the Deposit Securities contained in the file and deliver the enhanced file to Custodian for settlement; and, pursuant to such purchase orders, instruct the Transfer Agent to issue the appropriate number of ETF Shares of the applicable ETF Series for deposit to the Custodian’s DTC Participant Account;
(c) receive from the Distributor on each trade date a computer generated file that is in form and substance acceptable to NSCC and that contains redemption orders from Authorized Participants that have been received and accepted by the Distributor on behalf of the Trust for each Fund; transmit the file of redemption orders as received from the Distributor to NSCC; receive back from NSCC the file of redemption orders enhanced with NSCC generated prices for the Redemption Securities that are in the file and deliver the enhanced file to Custodian for settlement; and, pursuant to such redemption orders, instruct the Transfer Agent to redeem the appropriate number of ETF Shares of the applicable ETF Series in Creation Units and reduce the account of the Shareholder accordingly; and
(d) at the appropriate times, cause to be paid over to Authorized Participants Balancing Amounts on the purchase or redemption of Creation Units, as instructed by the Distributor or the Trust on behalf of each ETF Series.
4. Bank, from time to time, may receive from the Distributor a computer generated file similar in form and content to the file described in Subsection 3(a) above, but meeting NSCC’s requirements for the delivery of a customized basket of Deposit Securities or Redemption Securities, in respect of one or more of the ETF Series. Bank shall transmit this file as received from the Distributor to NSCC. This provision shall not be effective until Bank has built the necessary infrastructure to its systems to accommodate this requirement of Bank. Bank will notify the Trust when it is able to comply with this requirement.
5. The Trust understands and agrees that all risk associated with the processing, clearance and settlement of the purchase and redemption of ETF Shares, Deposit Securities and Redemption Securities and cash through the Clearing Process shall be that of the Trust and each ETF Series, irrespective of whether in effecting such purchases and redemptions for the Trust on behalf of each ETF Series through the Clearing Process, Bank, as a member of NSCC, is acting as principal or as agent; and, in respect hereof, the Trust and each Series, shall be bound by all the rules and procedures of NSCC and DTC as though it were the member or participant of such clearing and settlement systems.
6. A creation order may be rejected by the Distributor or the Trust where a deposit basket does not contain securities specified, and the Bank shall monitor for such event and promptly advise the Distributor and the Trust of same. B Delivery of Bearish ProShares Creation and Redemption Orders. Purchase and redemption orders for Creation Units for all Bearish ProShares will be transmitted to Bank by Distributor on behalf of the Trust on each trading day in the same computer generated files that contain Bullish ProShares purchase and redemption orders (referred to in paragraphs A3(b) and A3(c) above). Each such purchase and redemption order shall contain the CUSIP number of the particular Bullish and Bearish ProShares. Prior to Bank’s delivery to NSCC of these computer generated files that it has received from Distributor and containing Bullish and Bearish ProShares trades, Bank shall remove from these files by their identifying CUSIP numbers the Bearish ProShares orders at DTC and post these Bearish ProShares orders to Bank’s custody system for settlement to the Bank’s designated participant account at DTC.
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