United States Diesel Heating Oil Fund : Prospectus

Microsoft Word - i00287 US Diesel-Heating Oil Fund UHN.doc PROSPECTUS‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌ Filed Pursuant to Rule 424(b)(3) Registration No. 333-210541 United States Diesel-Heating Oil Fund, LP®*‌‌ 58,800,000 Shares‌‌‌ *Principal U.S. Listing Exchange: NYSE Arca, Inc.

The United States Diesel-Heating Oil Fund, LP ("UHN") is an exchange traded fund organized as a limited partnership that issues shares that trade on the NYSE Arca stock exchange ("NYSE Arca"). UHN's investment objective is to track a benchmark of short-term futures contracts. UHN pays its general partner, United States Commodity Funds LLC ("USCF"), a limited liability company, a management fee and incurs operating costs. The address of both UHN and USCF is 1999 Harrison Street, Suite 1530, Oakland, CA 94612. The telephone number for both UHN and USCF is 510.522.9600. In order for a hypothetical investment in shares to break even over the next 12 months, assuming a selling price of $12.69 (the net asset value as of March 31, 2016), the investment would have to generate 0.696% return or $0.088, rounded to $0.09. The amount for this breakeven analysis takes into account a fee waiver, which USCF may terminate at any time in its discretion. Please see page 29 for more information.‌‌‌‌‌‌‌‌‌‌‌‌

UHN is an exchange traded fund. This means that most investors who decide to buy or sell shares of UHN place their trade orders through their brokers and may incur customary brokerage commissions and charges. Shares trade on the NYSE Arca under the ticker symbol "UHN" and are bought and sold throughout the trading day at bid and ask prices like other publicly traded securities.‌

Shares trade on the NYSE Arca after they are initially purchased by "Authorized Participants," institutional firms that purchase shares in blocks of 50,000 shares called "baskets" through UHN's marketing agent, ALPS Distributors, Inc. (the "Marketing Agent"). The price of a basket is equal to the net asset value ("NAV") of 50,000 shares on the day that the order to purchase the basket is accepted by the Marketing Agent. The NAV per share is calculated by taking the current market value of UHN's total assets (after close of NYSE Arca) subtracting any liabilities and dividing that total by the total number of outstanding shares. The offering of UHN's shares is a "best efforts" offering, which means that neither the Marketing Agent nor any Authorized Participant is required to purchase a specific number or dollar amount of shares. USCF pays the Marketing Agent a marketing fee consisting of a fixed annual amount plus an incentive fee based on the amount of shares sold. Authorized Participants will not receive from UHN, USCF or any of their affiliates any fee or other compensation in connection with the sale of shares. Aggregate compensation paid to the Marketing Agent and any affiliate of USCF for distribution-related services in connection with this offering of shares will not exceed ten percent (10%) of the gross proceeds of the offering.‌‌‌‌‌‌‌

Investors who buy or sell shares during the day from their broker may do so at a premium or discount relative to the market value of the underlying heating oil futures contracts in which UHN invests due to supply and demand forces at work in the secondary trading market for shares that are closely related to, but not identical to, the same forces influencing the prices of diesel-heating oil and the heating oil futures contracts that serve as UHN's investment benchmark. Investing in UHN involves risks similar to those involved with an investment directly in the diesel-heating oil market, the correlation risk described above, and other significant risks. See "Risk Factors Involved with an Investment in UHN" beginning on page 4.

The offering of UHN's shares is registered with the Securities and Exchange Commission ("SEC") in accordance with the Securities Act of 1933 (the "1933 Act"). The offering is intended to be a continuous offering and is not expected to terminate until all of the registered shares have been sold or three years from the date of the original offering, whichever is earlier, unless extended as permitted under the rules under the 1933 Act, although the offering may be temporarily suspended if and when no suitable investments for UHN are available or practicable. UHN is not a mutual fund registered under the Investment Company Act of 1940 ("1940 Act") and is not subject to regulation under such Act.‌

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED IN THIS PROSPECTUS, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

UHN is a commodity pool and USCF is a commodity pool operator subject to regulation by the Commodity Futures Trading Commission and the National Futures Association under the Commodities Exchange Act.

THE COMMODITY FUTURES TRADING COMMISSION HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN THIS POOL NOR HAS THE COMMISSION PASSED ON THE ADEQUACY OR ACCURACY OF THIS DISCLOSURE DOCUMENT. The date of this prospectus is April 29, 2016. COMMODITY FUTURES TRADING COMMISSION RISK DISCLOSURE STATEMENT YOU SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO PARTICIPATE IN A COMMODITY POOL. IN SO DOING, YOU SHOULD BE AWARE THAT COMMODITY INTEREST TRADING CAN QUICKLY LEAD TO LARGE LOSSES AS WELL AS GAINS. SUCH TRADING LOSSES CAN SHARPLY REDUCE THE NET ASSET VALUE OF THE POOL AND CONSEQUENTLY THE VALUE OF YOUR INTEREST IN THE POOL. IN ADDITION, RESTRICTIONS ON REDEMPTIONS MAY AFFECT YOUR ABILITY TO WITHDRAW YOUR PARTICIPATION IN THE POOL. FURTHER, COMMODITY POOLS MAY BE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT, AND ADVISORY AND BROKERAGE FEES. IT MAY BE NECESSARY FOR THOSE POOLS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THIS DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF EACH EXPENSE TO BE CHARGED THIS POOL AT PAGE 28 AND A STATEMENT OF THE PERCENTAGE RETURN NECESSARY TO BREAK EVEN, THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT, AT PAGE 29. THIS BRIEF STATEMENT CANNOT DISCLOSE ALL THE RISKS AND OTHER FACTORS NECESSARY TO EVALUATE YOUR PARTICIPATION IN THIS COMMODITY POOL. THEREFORE, BEFORE YOU DECIDE TO PARTICIPATE IN THIS COMMODITY POOL, YOU SHOULD CAREFULLY STUDY THIS DISCLOSURE DOCUMENT, INCLUDING A DESCRIPTION OF THE PRINCIPAL RISK FACTORS OF THIS INVESTMENT, AT PAGE 4. YOU SHOULD ALSO BE AWARE THAT THIS COMMODITY POOL MAY TRADE FOREIGN FUTURES OR OPTIONS CONTRACTS. TRANSACTIONS ON MARKETS LOCATED OUTSIDE THE UNITED STATES, INCLUDING MARKETS FORMALLY LINKED TO A UNITED STATES MARKET, MAY BE SUBJECT TO REGULATIONS WHICH OFFER DIFFERENT OR DIMINISHED PROTECTION TO THE POOL AND ITS PARTICIPANTS. FURTHER, UNITED STATES REGULATORY AUTHORITIES MAY BE UNABLE TO COMPEL THE ENFORCEMENT OF THE RULES OF REGULATORY AUTHORITIES OR MARKETS IN NON- UNITED STATES JURISDICTIONS WHERE TRANSACTIONS FOR THE POOL MAY BE EFFECTED. SWAPS TRANSACTIONS, LIKE OTHER FINANCIAL TRANSACTIONS, INVOLVE A VARIETY OF SIGNIFICANT RISKS. THE SPECIFIC RISKS PRESENTED BY A PARTICULAR SWAP TRANSACTION NECESSARILY DEPEND UPON THE TERMS OF THE TRANSACTION AND YOUR CIRCUMSTANCES. IN GENERAL, HOWEVER, ALL SWAPS TRANSACTIONS INVOLVE SOME COMBINATION OF MARKET RISK, CREDIT RISK, COUNTERPARTY CREDIT RISK, FUNDING RISK, LIQUIDITY RISK, AND OPERATIONAL RISK. HIGHLY CUSTOMIZED SWAPS TRANSACTIONS IN PARTICULAR MAY INCREASE LIQUIDITY RISK, WHICH MAY RESULT IN A SUSPENSION OF REDEMPTIONS. HIGHLY LEVERAGED TRANSACTIONS MAY EXPERIENCE SUBSTANTIAL GAINS OR LOSSES IN VALUE AS A RESULT OF RELATIVELY SMALL CHANGES IN THE VALUE OR LEVEL OF AN UNDERLYING OR RELATED MARKET FACTOR. IN EVALUATING THE RISKS AND CONTRACTUAL OBLIGATIONS ASSOCIATED WITH A PARTICULAR SWAP TRANSACTION, IT IS IMPORTANT TO CONSIDER THAT A SWAP TRANSACTION MAY BE MODIFIED OR TERMINATED ONLY BY MUTUAL CONSENT OF THE ORIGINAL PARTIES AND SUBJECT TO AGREEMENT ON INDIVIDUALLY NEGOTIATED TERMS. THEREFORE, IT MAY NOT BE POSSIBLE FOR THE COMMODITY POOL OPERATOR TO MODIFY, TERMINATE, OR OFFSET THE POOL'S OBLIGATIONS OR THE POOL'S EXPOSURE TO THE RISKS ASSOCIATED WITH A TRANSACTION PRIOR TO ITS SCHEDULED TERMINATION DATE.

UNITED STATES DIESEL-HEATING OIL FUND, LP Table of Contents	Page
Disclosure Document: Prospectus Summary	1
UHN's Investment Objective and Strategy	1
Principal Investment Risks of an Investment in UHN	2
UHN's Fees and Expenses	3
Risk Factors Involved with an Investment in UHN	4
Investment Risk	4
Correlation Risk	5
Tax Risk	7
OTC Contract Risk	9
Other Risks	9
Additional Information about UHN, its Investment Objective and Investments	14
Impact of Contango and Backwardation on Total Returns	16
What are the Trading Policies of UHN?	20
Prior Performance of UHN	21
Composite Performance Data for UHN	22
UHN's Operations	23
USCF and its Management and Traders	23
UHN's Service Providers	26
UHN's Fees and Expenses	28
Breakeven Analysis	29
Conflicts of Interest	30
Ownership or Beneficial Interests in UHN	31
USCF's Responsibilities and Remedies	31
Liability and Indemnification	32
Meetings	32
Termination Events	32
Provisions of Law	33
Books and Records	33
Statements, Filings and Reports	33
Fiscal Year	34
Governing Law; Consent to Delaware Jurisdiction	34
Legal Matters	34
U.S. Federal Income Tax Considerations	35
Backup Withholding	43
Other Tax Considerations	43
Investment by ERISA Accounts	43
Form of Shares	45
Transfer of Shares	46
What is the Plan of Distribution?	47
Calculating Per Share NAV	48
Creation and Redemption of Shares	49
Use of Proceeds	53
Information You Should Know	54
Summary of Promotional and Sales Material	54
Intellectual Property	54
Where You Can Find More Information	55
Statement Regarding Forward-Looking Statements	55
Incorporation by Reference of Certain Information	55
Privacy Policy Appendix A Glossary of Defined Terms	56 A-1 A-1

PROSPECTUS SUMMARY‌

This is only a summary of the prospectus and, while it contains material information about UHN and its shares, it does not contain or summarize all of the information about UHN and the shares contained in this prospectus that is material and/or which may be important to you. You should read this entire prospectus, including "Risk Factors Involved with an Investment in UHN" beginning on page 4, before making an investment decision about the shares. For a glossary of defined terms, see Appendix A.

United States Diesel-Heating Oil Fund, LP ("UHN"), a Delaware limited partnership, is a commodity pool that continuously issues common shares of beneficial interest that may be purchased and sold on the NYSE Arca stock exchange ("NYSE Arca"). UHN is managed and controlled by United States Commodity Funds LLC ("USCF"), a Delaware limited liability company. USCF is registered as a commodity pool operator ("CPO") with the Commodity Futures Trading Commission ("CFTC") and is a member of the National Futures Association ("NFA'').

UHN's Investment Objective and Strategy

The investment objective of UHN is for the daily changes in percentage terms of its shares' per share net asset value ("NAV") to reflect the daily changes in percentage terms of the spot price of heating oil (also known as No. 2 fuel) for delivery at the New York harbor, as measured by the daily changes in the price of a specified short-term futures contract on heating oil called the "Benchmark Futures Contract", less UHN's expenses.

What Are the "Benchmark Futures Contracts"?

The Benchmark Futures Contracts are the futures contracts on diesel-heating oil as traded on the New York Mercantile Exchange (the "NYMEX") that are the near month contract to expire, except when the near month contract is within two weeks of expiration, in which case it will be the next month contract to expire.

UHN seeks to achieve its investment objective by investing in futures contracts for diesel-heating oil, crude oil, gasoline, natural gas and other petroleum-based fuels that are traded on the NYMEX, ICE Futures Exchange or other U.S. and foreign exchanges (such futures contracts are collectively referred to herein as "Futures Contracts"), and to a lesser extent, in order to comply with regulatory requirements or in view of market conditions, other heating oil-related investment such as cash- settled options on Futures Contracts, forward contracts for diesel-heating oil, crude oil and other petroleum-based fuels, cleared swap contracts, and non-exchange traded ("over-the-counter") transactions that are based on the price of diesel- heating oil, crude oil and other petroleum-based fuels, Futures Contracts and indices based on the foregoing (collectively, "Other Diesel-Heating Oil-Related Investments"). Market conditions that USCF currently anticipates could cause UHN to invest in Other Diesel-Heating Oil-Related Investments include those allowing UHN to obtain greater liquidity or to execute transactions with more favorable pricing. For convenience and unless otherwise specified, Futures Contracts and Other Diesel-Heating Oil-Related Investments collectively are referred to as "Diesel-Heating Oil Interests" in this prospectus.

Heating Oil Contract. The heating oil contract offered by NYMEX was the first energy commodity futures contract listed in the United States in 1978, predating similar contracts on crude oil, natural gas, and gasoline by a number of years. Heating oil is physically similar to diesel fuel with the primary physical difference historically being the amount of allowable sulfur permitted in heating oil versus the lower levels of sulfur permitted in diesel fuel. Despite this physical difference, the similarities between the two distilled products was such that physical producers or users of diesel fuel, as well as financial investors, have traditionally used the heating oil contract to hedge or speculate on diesel fuel prices. In recent years several diesel-specific contracts have been listed on U.S. futures exchanges. However, none of these contracts have seen much use as the diesel market continued to make use of the heating oil contract, which provided greater liquidity. At the same time, several states in the U.S. Northeast have proposed new standards for heating oil that would require heating oil to contain lower levels of sulfur. These new levels of permitted sulfur will have the effect of removing the single largest physical difference between heating oil and diesel fuel.

Following the transition to lower sulfur specifications, the heating oil futures contract will serve as a dual-use price benchmark for both the heating oil and on-road diesel markets. It will also more closely match diesel specifications in international markets, including the European ultra-low sulfur diesel market.

NYMEX has made clear their desire to encourage the use of the heating oil futures contracts as a proxy for the diesel fuel market, and in fact, renamed the contract to "NY Harbor ULSD Futures" in April 2013.