Unassociated Document

FOCUSSHARES TRUST

Proxy Voting Policies and Procedures

Policy

It is the policy of the Board of Trustees (the “Board”) of the FocusShares Trust (the “Fund”) to delegate the responsibility for voting proxies relating to the securities held by the Fund to the investment adviser, FocusShares LLC (the “Advisor” ), subject to the Board’s continuing oversight. The Board hereby delegates such responsibility to the Advisor, and directs the Advisor to vote proxies relating to Fund portfolio securities managed by the Adviser consistent with the duties and procedures set forth below. The Advisor may retain a third party to review, monitor and recommend how to vote proxies in a manner consistent with the duties and procedures set forth below, to ensure such proxies are voted on a timely basis and to provide reporting and/or record retention services in connection with proxy voting for the Fund.

2.	Fiduciary Duty

The right to vote a proxy with respect to securities held by the Fund is an asset to the Fund. The Advisor, to which authority to vote on behalf of the Fund is delegated, acts as a fiduciary of the Fund and must vote proxies in a matter consistent with the best interest of the Fund and its shareholders. In discharging this fiduciary duty, the Advisor must maintain and adhere to its policies and procedures for addressing conflicts of interest and must vote in a manner substantially consistent with its policies, procedures and guidelines, as presented to the Board.

3.	Procedures

The following are the procedures adopted by the Board for the administration of this policy:

Review of Advisor’s Proxy Voting Procedures. The Advisor shall present to the Board their policies, procedures and other guidelines for voting proxies at least annually, and must notify the Board promptly of material changes to any of these documents, including changes to policies and procedures addressing conflicts of interest.

Voting Record Reporting. The Advisor shall ensure that the voting record necessary for the completion and filing of Form N-PX is provided to the Fund’s administrator at least annually. Such voting record information shall be in a form acceptable to the Fund and shall be provided at such time(s) as are required for the timely filing of Form N-PX and at such additional times(s) as the Fund and the Advisor may agree from time to time. With respect to those proxies that the Advisor has identified as involving a conflict of interest, the Advisor shall submit a report indicating the nature of the conflict of interest and how that conflict was resolved with respect to the voting of the proxy.

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Conflicts of Interest. Any actual or potential conflicts of interest between the Advisor and the Fund's shareholders arising from the proxy voting process will be addressed by the relevant Advisor and the Advisor’s application of its proxy voting procedures pursuant to the delegation of proxy voting responsibilities to the Advisor. In the event that the Advisor notifies the Chief Compliance Officer of the Fund (the “CCO”) that a conflict of interest cannot be resolved under the Advisor’s Proxy Voting Procedures, and the CCO is responsible for notifying the Chairman of the Board of the Fund of the irreconcilable conflict of interest and assisting the Chairman with any actions he determines are necessary.

As it is used in this document, the term "conflict of interest" refers to a situation in which the Advisor or an affiliated person of the advisor has a financial interest in a matter presented by a proxy other than the obligation they incur as Advisor to the Fund which could potentially compromise the Advisor’s independence of judgment and action with respect to the voting of the proxy.

4.	Revocation

The delegation by the Board of the authority to vote proxies relating to securities of the Fund is entirely voluntary and may be revoked by the Board, in whole or in part, at any time.

5.	Disclosure of Policy or Description/Proxy Voting Record

A. The Fund will disclose this proxy voting policy or a description of it (and the adviser’s proxy voting policy or a description of it), in the Fund’s Statement of Additional Information (“SAI”). The Fund also will disclose in its SAI that information is available about how the Fund voted proxies during the most recent twelve-month period ended June 30 without charge, upon request, (i) either by calling a specified toll-free telephone number, or on the Fund’s website at a specified address, or both, and (ii) on the Commission’s website. Upon any request for a proxy voting record by telephone, the Fund will send the policy or the description (or a copy of the SAI containing the policy or description) by first-class mail or other prompt delivery method within three business days of receipt of the request.

B. The Fund will disclose in its annual and semi-annual shareholder reports that this proxy voting policy or a description of it (and the adviser’s proxy voting policy or a description) is available without charge, upon request, (i) by calling a specified toll-free telephone number, (ii) on the Fund’s website, if applicable, and (iii) on the Commission’s website. Upon any request for a proxy voting policy or description of it, the Fund will send the policy or the description (or a copy of the SAI containing the policy or description) by first-class mail or other prompt delivery method within three business days of receipt of the request.

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C.The Fund also will disclose in its annual and semi-annual shareholder reports that information is available about how the Fund voted proxies during the most recent twelve-month period ended June 30 without charge, upon request, (i) either by calling a specified toll-free telephone number, or on or through the Fund’s website at a specified address, or both, and (ii) on the Commission’s website. Upon any request for a proxy voting record by telephone, the Fund will send the information disclosed in the Fund’s most recently filed report on Form N-PX by first-class mail or other prompt delivery method within three business days of receipt of the request.

D. The Fund will file Form N-PX containing its proxy voting record for the most recent twelve-month period ended June 30 with the SEC, and will provide a copy of the report (in paper form, online, or by reference to the SEC’s website) to shareholders who request it.

E. The Fund will disclose its proxy voting record for the most recent twelve-month period ended June 30 (on Form N-PX or otherwise) to shareholders either in paper form upon request, or on its website.

F. Related Procedures

The Fund currently satisfies the disclosure obligation set forth in Section E above by:

describing the proxy voting policy in the Fund’s SAI and disclosing in the Fund’s SAI that the information is available about how the Fund voted proxies during the most recent twelve-month period ended June 30 without charge, upon request by calling a specified toll-free telephone number and on the Commission’s website;

disclosing in its annual and semi-annual shareholder reports that this proxy voting policy (and the adviser’s proxy voting policy or a description) is available without charge, upon request by calling a specified toll-free telephone number and on the Commission’s website;

disclosing in its annual and semi-annual shareholder reports that information is available about how the Fund voted proxies during the most recent twelve-month period ended June 30 without charge, upon request, by calling a specified toll-free telephone number and on the Commission’s website; and

providing any shareholder, upon request, a paper form of the most recently filed report on Form N-PX by first-class mail or other prompt delivery method within three business days of receipt of the request.

G. Review of Policy

The Board shall review from time to time this policy to determine its sufficiency and shall make and approve any changes that it deems necessary from time to time.

Adopted February ___, 2011

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Issuing additional shares can dilute existing holders in limited circumstances. Further, the availability of additional shares, where the board has discretion to implement a poison pill, can often serve as a deterrent to interested suitors. Accordingly, where we find that the company has not detailed a plan for use of the proposed shares, or where the number of shares far exceeds those needed to accomplish a detailed plan, we typically recommend against the authorization of additional shares.

While we think that having adequate shares to allow management to make quick decisions and effectively operate the business is critical, we prefer that, for significant transactions, management come to shareholders to justify their use of additional shares rather than providing a blank check in the form of a large pool of unallocated shares available for any purpose.

ADVANCE NOTICE REQUIREMENTS

FOR SHAREHOLDER BALLOT PROPOSALS

We typically recommend that shareholders vote against proposals that would require advance notice of shareholder proposals or of director nominees.

These proposals typically attempt to require a certain amount of notice before shareholders are allowed to place proposals on the ballot. Notice requirements typically range between three to six months prior to the annual meeting. Advance notice requirements typically make it impossible for a shareholder who misses the deadline to present a shareholder proposal or a director nominee that might be in the best interests of the company and its shareholders.

We believe shareholders should be able to review and vote on all proposals and director nominees. Shareholders can always vote against proposals that appear with little prior notice. Shareholders, as owners of a business, are capable of identifying issues on which they have sufficient information and ignoring issues on which they have insufficient information. Setting arbitrary notice restrictions limits the opportunity for shareholders to raise issues that may come up after the window closes.

VOTING STRUCTURE

Cumulative Voting

We review cumulative voting proposals on a case-by-case basis, factoring in the independence of the board and the status of the company’s governance structure. But we typically find these proposals on ballots at companies where independence is lacking and where the appropriate checks and balances favoring shareholders are not in place. In those instances we typically recommend in favor of cumulative voting.

Cumulative voting is a process that maximizes minority shareholders’ ability to ensure representation of their views on the board. It can be important when a board is controlled by insiders or affiliates and where the company’s ownership structure includes one or more shareholders who control a majority-voting block of company stock.

Glass Lewis believes that cumulative voting generally acts as a safeguard for shareholders by ensuring that those who hold a significant minority of shares can elect a candidate of their choosing to the board. This allows the creation of boards that are responsive to the interests of all shareholders rather than just a small group of large holders.

Academic literature indicates that where a highly independent board is in place and the company has a shareholder-friendly governance structure, shareholders may be better off without cumulative voting. The analysis underlying this literature indicates that shareholder returns at firms with good governance structures are lower and that boards can become factionalized and prone to evaluating the needs of special interests over the general interests of shareholders collectively.

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Where a company has adopted a true majority vote standard (i.e., where a director must receive a majority of votes cast to be elected, as opposed to a modified policy indicated by a resignation policy only), Glass Lewis will recommend voting against cumulative voting proposals due to the incompatibility of the two election methods. For companies that have not adopted a true majority voting standard but have adopted some form of majority voting, Glass Lewis will also generally recommend voting against cumulative voting proposals if the company has not adopted antitakeover protections and has been responsive to shareholders.

Where a company has not adopted a majority voting standard and is facing both a shareholder proposal to adopt majority voting and a shareholder proposal to adopt cumulative voting, Glass Lewis will support only the majority voting proposal. When a company has both majority voting and cumulative voting in place, there is a higher likelihood of one or more directors not being elected as a result of not receiving a majority vote. This is because shareholders exercising the right to cumulate their votes could unintentionally cause the failed election of one or more directors for whom shareholders do not cumulate votes.

Supermajority Vote Requirements

Glass Lewis believes that supermajority vote requirements impede shareholder action on ballot items critical to shareholder interests. An example is in the takeover context, where supermajority vote requirements can strongly limit the voice of shareholders in making decisions on such crucial matters as selling the business. This in turn degrades share value and can limit the possibility of buyout premiums to shareholders. Moreover, we believe that a supermajority vote requirement can enable a small group of shareholders to overrule the will of the majority shareholders. We believe that a simple majority is appropriate to approve all matters presented to shareholders.

TRANSACTION OF OTHER BUSINESS

AT AN ANNUAL OR SPECIAL MEETING OF SHAREHOLDERS

We typically recommend that shareholders not give their proxy to management to vote on any other business items that may properly come before the annual meeting. In our opinion, granting unfettered discretion is unwise.

ANTI-GREENMAIL PROPOSALS

Glass Lewis will support proposals to adopt a provision preventing the payment of greenmail, which would serve to prevent companies from buying back company stock at significant premiums from a certain shareholder. Since a large or majority shareholder could attempt to compel a board into purchasing its shares at a large premium, the anti-greenmail provision would generally require that a majority of shareholders other than the majority shareholder approve the buyback.

MUTUAL FUNDS: INVESTMENT POLICIES AND ADVISORY AGREEMENTS

Glass Lewis believes that decisions about a fund’s structure and/or a fund’s relationship with its investment advisor or sub-advisors are generally best left to management and the members of the board, absent a showing of egregious or illegal conduct that might threaten shareholder value. As such, we focus our analyses of such proposals on the following main areas:

· The terms of any amended advisory or sub-advisory agreement;

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· Any changes in the fee structure paid to the investment advisor; and

· Any material changes to the fund’s investment objective or strategy.

We generally support amendments to a fund’s investment advisory agreement absent a material change that is not in the best interests of shareholders. A significant increase in the fees paid to an investment advisor would be reason for us to consider recommending voting against a proposed amendment to an investment advisory agreement. However, in certain cases, we are more inclined to support an increase in advisory fees if such increases result from being performance-based rather than asset-based. Furthermore, we generally support sub-advisory agreements between a fund’s advisor and sub-advisor, primarily because the fees received by the sub-advisor are paid by the advisor, and not by the fund.

In matters pertaining to a fund’s investment objective or strategy, we believe shareholders are best served when a fund’s objective or strategy closely resembles the investment discipline shareholders understood and selected when they initially bought into the fund. As such, we generally recommend voting against amendments to a fund’s investment objective or strategy when the proposed changes would leave shareholders with stakes in a fund that is noticeably different than when originally contemplated, and which could therefore potentially negatively impact some investors’ diversification strategies.

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V. Environmental, Social and

Governance Shareholder Initiatives

Glass Lewis evaluates shareholder proposals on a case-by-case basis. We generally recommend supporting shareholder proposals calling for the elimination or removal of, as well as to require shareholder approval of, antitakeover devices such as poison pills and classified boards, both discussed in detail above. We generally recommend supporting proposals likely to increase or protect shareholder value and/or promote the furtherance of shareholder rights. In addition, we also generally recommend supporting proposals seeking to promote director accountability and to improve compensation practices especially those promoting a closer link between compensation and performance.

However, we typically prefer to leave decisions regarding day-to-day management and policy decisions, including those related to social, environmental or political issues, to management and the board except when there is a clear link between the proposal and economic or financial value enhancement or risk mitigation for the firm. We feel strongly that shareholders should not attempt to micromanage the company, its businesses or its executives through the shareholder initiative process.

Rather, we believe shareholders should use their influence to push for governance structures that protect shareholders and promote director accountability, including majority voting for director elections, and then put in place a board they can trust to make informed and careful decisions that are in the best interests of the business and its owners. We believe shareholders should hold directors accountable for management and policy decisions through director elections. However, we recognize that support of appropriately crafted shareholder initiatives that provide shareholders with increased information, and that allow the board sufficient flexibility can, in some cases, serve to promote or protect shareholder value. The following is a discussion of Glass Lewis’ approach to certain common shareholder resolution proposals. We note that the following is not an exhaustive list of all shareholder proposals analyzed or expected.

GOVERNANCE

Right of Shareholders to Call a Special Meeting

Glass Lewis strongly supports the right of shareholders to call special meetings. Thus we believe in certain circumstances shareholders should have the ability to call meetings of shareholders between annual meetings to consider matters that require prompt attention. However, in order to prevent abuse and waste of corporate resources by a small minority of shareholders, we believe that shareholders representing at least a sizable minority of shares must support such a meeting prior to its calling. Should the threshold be set too low, companies might frequently be subjected to meetings whose effect could be the disruption of normal business operations in order to focus on the interests of only a small minority of owners. Typically we believe this threshold should not fall below 10-15% of shares, depending on company size.

In our evaluation whether to recommend supporting such proposals, we consider the following:

· Company size

· Shareholder base in both percentage of ownership and type of shareholder (e.g., hedge fund, activist investor, mutual fund, pension fund, etc.)

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· Responsiveness of board and management to shareholders evidenced by progressive shareholder rights policies (e.g., majority voting, declassifying boards, etc.) and reaction to shareholder proposals

· Company performance and steps taken to improve bad performance (e.g., new executives/directors, spin offs, etc.)

· Existence of anti-takeover protections or other entrenchment devices

· Opportunities for shareholder action (e.g., ability to act by written consent)

· Existing ability for shareholders to call a special meeting

Right of Shareholders to Act by Written Consent

Glass Lewis strongly supports shareholders’ right to act by written consent. As with the right to call special meetings, we believe such rights should be limited to, again depending on company size, a minimum of 10-15% of the shareholders requesting action by written consent, to prevent abuse and waste of corporate resources. Again, we believe a lower threshold may leave companies subject to meetings that may disrupt business operations to focus on the interests of a minority of owners. But we will support proposals to allow shareholders to act by written consent without a minimum threshold because shareholders are better off with this right than without it, and the benefit to shareholders outweighs the potential for abuse.

Board Composition

Glass Lewis believes the selection and screening process for identifying suitably qualified candidates for a company’s board of directors is one which requires the judgment of many factors, including the balance of skills and talents, as well as the breadth and diversity of experience of candidates and existing board members.

The diversity of skills, abilities and points of view can foster the development of a more creative and effective board. In general, however, we do not believe that it is in the best interests of shareholders for firms to be beholden to arbitrary rules regarding its board composition. We believe such matters should be left to a board’s nominating committee, which is generally responsible for establishing and implementing policies regarding the composition of the board, and which can be held accountable through their election.

Reimbursement of Solicitation Expenses

Glass Lewis feels that in some circumstances, replacing some or all directors on a company’s board is warranted where the incumbent director or directors have failed in their oversight of management by failing to address continuously poor performance. Where a dissident shareholder is seeking reimbursement for his or her expenses and has received the support of a majority of shareholders, Glass Lewis generally will recommend in favor of reimbursing the dissident for expenses incurred in waging the contest.

In those rare cases where a shareholder has put the shareholder’s own time and money into a successful campaign to unseat a poorly performing director, we feel that the dissident should be entitled to reimbursement of expenses by the company. In such a situation, other shareholders express their agreement by virtue of their majority vote for the dissident and will share in the improved company performance.

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Since contests are expensive and distracting to the management and the board, to avoid encouraging nuisance or agenda-driven contests, we only support the reimbursement of expenses where the dissident has convinced at least a majority of shareholders to support a certain candidate(s).

COMPENSATION

Severance Agreements

As a general rule, Glass Lewis believes that shareholders should not be involved in the approval of individual severance plans. Such matters should be left to the board’s compensation committee, which can be held accountable for its decisions through the election of its director members.

However, when proposals are crafted to only require approval if the benefit exceeds 2.99 times the amount of the executive’s base salary plus bonus, Glass Lewis typically supports such requests. Above this threshold, based on the executive’s average annual compensation for the most recent five years, the company can no longer deduct severance payments as an expense, and thus shareholders are deprived of a valuable benefit. We believe that shareholders should be consulted before relinquishing such a right, and that implementing such policies would still leave companies with sufficient freedom to enter into the vast majority of severance arrangements.

Additionally, investors should monitor severance agreements when they are initially put in place. If shareholders initially approved of a severance agreement, it is inappropriate to vote against the compensation committee later on when the severance agreement goes into effect. However, in the absence of a shareholder vote on severance agreements, Glass Lewis will evaluate the role of the compensation committee when the agreement was adopted.

Advisory Vote on Executive Compensation (“Say-on-Pay”)

As noted above, Glass Lewis does not believe shareholders should be involved in the design, negotiation, management or approval of compensation packages. Such matters should be left to the compensation committee, which can be held accountable for its decisions through their election.

In the case of advisory votes on compensation, however, proposals are typically crafted to allow shareholders a non-binding vote on the company’s executive officers’ compensation and policies. Glass Lewis believes that the advisory vote therefore provides an effective mechanism for enhancing transparency in setting executive pay, improving accountability to shareholders, and providing for a more effective link between pay and performance. Where shareholders believe compensation packages are inappropriately structured, a high negative vote could compel the board to reexamine its compensation practices and act accordingly. While a vote to approve the report will not directly affect the board’s ability to set compensation policy, it will allow shareholders to register their opinions regarding the company’s compensation practices.

While still somewhat nascent, empirical research regarding the effects of advisory votes in certain non-US markets paints a broadly positive picture of the impact of such votes. In particular, a 2004 study for the British Department of Trade and Industry found that the advisory voting requirement has resulted in “a number of well publicized situations where [compensation] committees have changed their policy or practice as a result of direct shareholder voting.” (“Report on the Impact of the Directors’ Remuneration Report Regulations.” Deloitte & Touche. 2004). The study also found that the extent to which companies consulted shareholders about compensation practices has greatly increased over the past two years.

Further empirical evidence suggests that CEO compensation in the UK has been more sensitive to negative operating metrics following the introduction of the remuneration report vote than in prior periods, indicating a decrease in “rewards for failure”. (Fabrizio Ferri and David Maber. “Say on Pay Vote and CEO Compensation: Evidence from the UK.” SSRN: http://ssrn.com/abstract=1169446. June 30, 2008.)

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We recognize that criticism has been raised with respect to shareholder advisory votes, such as injecting shareholders too far into compensation decisions and limiting the flexibility of companies to uniquely tailor their compensation policies as they strive to conform to external guidelines. (Laraine S. Rothenberg and Todd S. McCafferty. “’Say on Pay’: Linking Executive Pay to Performance”. New York Law Journal. September 24, 2008). However, we do not believe these arguments are persuasive since shareholders are already, and increasingly, reviewing all aspects of compensation irrespective of an opportunity to cast an advisory vote on compensation. Indeed, a growing number of institutional investors vote against compensation committee members as a means to express concern or dissatisfaction with companies’ compensation practices. As a result, some of these institutions do not feel the adoption of advisory votes is necessary since they will vote against compensation committee members directly.

Glass Lewis does, however, recognize that the use of advisory compensation votes does not necessarily reduce executive compensation. One recent study that found that executive remuneration in the UK has continued to rise at the same rate as prior to the adoption of say on pay, indicating a general failure to curb executive compensation. (Jeffrey Gordon. “’Say on Pay’: Cautionary Notes on the UK Experience and the Case for Muddling Through.” Columbia Law and Economics Working Paper No. 336. SSRN: http://ssrn.com/abstract=1262867. September 3, 2008). We, however, do not believe that the purpose of an advisory vote on compensation is to “rein in” executive pay. Rather it is to ensure that the remuneration paid to executives is firmly tied to the creation and advancement of long-term shareholder value.

Bonus Recoupments (“Clawbacks”)

Glass Lewis carefully reviews the compensation awarded to senior executives and we believe that senior executives of a company should never receive compensation for performance that was not achieved by the company.

We believe shareholders would be well-served by requiring the board to adopt a more detailed and stringent policy on recouping unearned bonuses, rather than relying on regulatory action such as requirements under Sarbanes Oxley. When examining proposals that require companies to recoup executives’ bonuses paid as a result of faulty accounting, Glass Lewis will first look to see if the company has already adopted a policy to recoup bonuses awarded to senior executives during a restatement, and whether that policy is included in the CEO’s contract. When the board has already committed to a proper course, in our opinion, and their current policy covers the major tenets of the proposal at hand while giving the board adequate flexibility to exercise discretion over these matters, we see no need for further action.

In some instances, shareholder proposals call for board action that may contravene the board’s legal obligations under existing employment agreements with executives. In addition, the board’s ability to exercise its judgment and reasonable discretion on this issue may be excessively limited under such proposals, which may not be warranted, depending on the specific situation of the company in question. We believe it is reasonable that a recoupment policy should only affect senior executives and those directly responsible for the company’s accounting errors.

Where a company is giving a new contract to an executive that does not include a clawback provision and the company has had a material restatement, especially if the restatement was due to fraud, Glass Lewis will recommend voting against the responsible members of the compensation committee. Compensation committee members have an obligation to build in reasonable controls to executive contracts to prevent payments in the case of inappropriate behavior.

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Linking Executive Pay to Social Criteria

We recognize that companies’ involvement in environmentally sensitive and labor-intensive industries influences the degree to which a firm’s overall strategy must weigh environmental and social concerns. However, we also understand that the value generated by incentivizing executives to prioritize environmental and social issues is difficult to quantify and therefore measure, and necessarily varies among industries and companies.

When reviewing such proposals seeking to tie executive compensation to environmental or social practices, we will review the target firm’s compliance with (or violation of) applicable laws and regulations, and examine any history of environmental and social related concerns including those resulting in material investigations, lawsuits, fines and settlements. We will also review the firm’s current compensation policies and practice. However, with respect to executive compensation, Glass Lewis generally believes that such policies should be left to the compensation committee. We view the election of directors, specifically those who sit on the compensation committee, as the appropriate mechanism for shareholders to express their disapproval of board policy on this issue.

ENVIRONMENT

When management and the board have displayed disregard for environmental risks, have engaged in egregious or illegal conduct, or have failed to adequately respond to current or imminent environmental risks that threaten shareholder value, we believe shareholders should hold directors accountable when they face reelection. We believe it is prudent for management to assess its potential exposure to all risks, including environmental and regulations pertaining thereto and incorporate this information into its overall business risk profile.

Glass Lewis recognizes the significant financial, legal and reputational risks to companies resulting from poor environmental practices or negligent oversight thereof. We believe part of the board’s role is to ensure that management conducts a complete risk analysis of company operations, including those that have environmental implications. Further, directors should monitor management’s performance in mitigating the environmental risks attendant with relevant operations in order to eliminate or minimize the risks to the company and shareholders.

While Glass Lewis recognizes that most environmental concerns are best addressed via avenues other than proxy proposals, when a substantial environmental risk has been ignored or inadequately addressed, we may recommend voting against responsible members of the governance committee. In some cases, we may recommend voting against all directors who were on the board when the substantial risk arose, was ignored, or was not mitigated.

Climate Change and Green House Gas Emission Disclosure Proposals

Glass Lewis will consider recommending a vote in favor of a reasonable shareholder proposal to disclose a company’s climate change and/or green house gas emission approaches when (i) a company has encountered problems such as lawsuits and/or government investigations or investors have established a link to impact on shareholder value from climate change and/or green house gas emission regulations, and (ii) the company has failed to adequately disclose how it has addressed these problems. We will examine such proposals in light of requests made to the company for additional information, its response and whether there is a reasonable case as to the negative implications to shareholders and the company.

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With respect to climate risk, Glass Lewis believes companies should actively consider their exposure to:

Direct environmental risk: Companies should evaluate their financial exposure to a potential rise in sea levels, increased wildfires and extreme weather, reduced air quality, water availability and public health problems brought on by higher temperatures.

Risk due to legislation/regulation: We believe companies, and particularly those operating in carbon-intensive industries, should evaluate their exposure to a potential increase or shift in environmental regulation with respect to their operations.

Legal and reputational risk: As has been seen relating to other environmental, social and governance matters, failure to take action may carry the risk of damaging negative publicity and potentially costly litigation.

As such, Glass Lewis will consider recommending a vote in favor of a reasonable proposal to disclose a company’s climate change and/or greenhouse gas emission strategies when (i) a company has suffered financial impact from reputational damage, lawsuits and/or government investigations, (ii) there is a strong link between climate change and/or its resultant regulation and shareholder value at the firm, and (iii) the company has failed to adequately disclose how it has addressed these risks.

Sustainability

With respect to shareholder proposals requesting that a firm produce a sustainability report, when evaluating these requests we will consider, among other things:

· The financial risk to the company from the firm’s environmental practices and/or regulation;

· The relevant company’s current level of disclosure;

· The level of sustainability information disclosed by the firm’s peers;

· The industry in which the firm operates;

· The level and type of sustainability concerns/controversies at the relevant firm, if any;

· The time frame within which the relevant report is to be produced; and

· The level of flexibility granted to the board in the implementation of the proposal.

Sustainable Forestry

Sustainable forestry provides for the long-term sustainable management and use of trees and other non-timber forest products. Retaining the economic viability of forests is one of the tenets of sustainable forestry, along with encouraging more responsible corporate use of forests. Sustainable land use and the effective management of land are viewed by some shareholders as important in light of the impact of climate change. Forestry certification has emerged as a way that corporations can address prudent forest management. There are currently several primary certification schemes such as the Sustainable Forestry Initiative (“SFI”) and the Forest Stewardship Council (“FSC”).

There are nine main principles that comprise the SFI: (i) sustainable forestry; (ii) responsible practices; (iii) reforestation and productive capacity; (iv) forest health and productivity; (v) long-term forest and soil productivity; (vi) protection of water resources; (vii) protection of special sites and biodiversity; (viii) legal compliance; and (ix) continual improvement.

The FSC adheres to ten basic principles: (i) compliance with laws and FSC principles; (ii) tenure and use rights and responsibilities; (iii) indigenous peoples’ rights; (iv) community relations and workers’ rights; (v) benefits from the forest; (vi) environmental impact; (vii) management plan; (viii) monitoring and assessment; (ix) maintenance of high conservation value forests; and (x) plantations.

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Shareholder proposals regarding sustainable forestry have typically requested that the firm comply with the above SFI or FSC principles as well as to assess the feasibility of phasing out the use of uncertified fiber and increasing the use of certified fiber. We will evaluate target firms’ current mix of certified and uncertified paper and the firms’ general approach to sustainable forestry practices, both absolutely and relative to its peers but will only support proposals of this nature when we believe that the proponent has clearly demonstrated that the implementation of this proposal is clearly linked to an increase in shareholder value.

SOCIAL ISSUES

Non-Discrimination Policies

Where there is clear evidence of employment practices resulting in significant negative economic exposure to the company, Glass Lewis will support shareholder proposals that seek to address labor policies, such as shareholder proposals calling for increased disclosure of labor policies and of steps a company has taken to mitigate the risks associated with those policies.

Glass Lewis recognizes that companies with a record of poor labor relations or treatment of its workers can face risks, such as employee lawsuits, poor employee work performance and turnover, and regulatory investigations. Glass Lewis will hold directors accountable for company decisions related to labor and employment problems.

As risk associated with sensitive issues such as EEO policies and investigations of discrimination have the potential to directly affect shareholder value, we believe shareholders should closely monitor the company’s policies regarding these issues. As an increasing number of peer companies adopt inclusive EEO policies, companies without comprehensive policies may face damaging recruitment, reputational and, potentially, legal risks. We recognize that the theoretical increase in, or protection of, shareholder value resulting from inclusive employment policies may be difficult, if not impossible, to identify or measure.

However, we believe that a pattern of making financial settlements as a result of lawsuits based on discrimination could indicate exposure to findings of discriminatory employment practices. As such, shareholders could, in some instances, benefit from codifying nondiscriminatory policies.

MacBride Principles

To promote peace, justice and equality regarding employment in Northern Ireland, Dr. Sean MacBride, founder of Amnesty International and Nobel Peace laureate, proposed the following equal opportunity employment principles:

1. Increasing the representation of individuals from underrepresented religious groups in the workforce including managerial, supervisory, administrative, clerical and technical jobs;

2. Adequate security for the protection of minority employees both at the workplace and while traveling to and from work;

3. The banning of provocative religious or political emblems from the workplace;

4. All job openings should be publicly advertised and special recruitment efforts should be made to attract applicants from underrepresented religious groups;

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5. Layoff, recall, and termination procedures should not, in practice, favor particular religious groupings;

6. The abolition of job reservations, apprenticeship restrictions, and differential employment criteria, which discriminate on the basis of religion or ethnic origin;

7. The development of training programs that will prepare substantial numbers of current minority employees for skilled jobs, including the expansion of existing programs and the creation of new programs to train, upgrade, and improve the skills of minority employees;

8. The establishment of procedures to assess, identify and actively recruit minority employees with potential for further advancement; and

9. The appointment of senior management staff member to oversee the company’s affirmative action efforts and setting up of timetables to carry out affirmative action principles.

Proposals requesting the implementation of the above principles are typically proposed at firms that operate, or maintain subsidiaries that operate, in Northern Ireland. In each case, we will examine the company’s current equal employment opportunity policy and the extent to which the company has been subject to protests, fines, or litigation regarding discrimination in the workplace, if any. Further, we will examine any evidence of the firm’s specific record of labor concerns in Northern Ireland.

Human Rights

Glass Lewis believes explicit policies set out by companies’ boards of directors on human rights provides shareholders with the means to evaluate whether the company has taken steps to mitigate risks from its human rights practices. As such, we believe that it is prudent for firms to actively evaluate risks to shareholder value stemming from global activities and human rights practices along entire supply chains. Findings and investigations of human rights abuses can inflict, at a minimum, reputational damage on targeted companies and have the potential to dramatically reduce shareholder value. This is particularly true for companies operating in emerging market countries in extractive industries and in politically unstable regions.

As such, while we typically rely on the expertise of the board on these important policy issues, we recognize that, in some instances, shareholders could benefit from increased reporting or further codification of human rights policies.

Military and US Government Business Policies

Glass Lewis believes that disclosure to shareholders of information on key company endeavors is important. However, we generally do not support resolutions that call for shareholder approval of policy statements for or against government programs, most of which are subject to thorough review by the federal government and elected officials at the national level. We also do not support proposals favoring disclosure of information where such disclosure is already mandated by law, unless circumstances exist that warrant the extra disclosure.

Foreign Government Business Policies

Where a corporation operates in a foreign country, Glass Lewis believes that the company and board should maintain sufficient controls to prevent illegal or egregious conduct with the potential to decrease shareholder value, examples of which include bribery, money laundering, severe environmental violations or proven human rights violations. We believe that shareholders should hold board members, and in particular members of the audit committee and CEO, accountable for these issues when they face reelection, as these concerns may subject the company to financial risk such as fines for violating the Foreign Corrupt Practices Act. In some instances, we will support appropriately crafted shareholder proposals specifically addressing concerns with the target firm’s actions outside its home jurisdiction.

A-48

Health Care Reform Principles

Health care reform in the United States has long been a contentious political issue and Glass Lewis therefore believes firms must evaluate and mitigate the level of risk to which they may be exposed regarding potential changes in health care legislation. In 2009, Glass Lewis reviewed multiple shareholder proposals requesting that boards adopt principles for comprehensive health reform, such as the following based upon principles reported by the Institute of Medicine:

· Health care coverage should be universal;

· Health care coverage should be continuous;

· Health care coverage should be affordable to individuals and families;

· The health insurance strategy should be affordable and sustainable for society; and

· Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered and equitable.

Given the current national debate regarding health care, we typically believe that individual board rooms are not the appropriate forum in which to address evolving and contentious national policy issues. The adoption of a narrow set of principles could limit the board’s ability to comply with new regulation or to appropriately and flexibly respond to health care issues as they arise. As such, barring a compelling reason to the contrary, we typically do not support the implementation of national health care reform principles at the company level.

Tobacco

Glass Lewis recognizes the contentious nature of the production, procurement, marketing and selling of tobacco. However, we typically do not support proposals requesting that firms shift away from, or significantly alter, the legal production or marketing of core products. We also recognize that tobacco companies are particularly susceptible to reputational and regulatory risk due to the nature of its operations. As such, we will consider supporting uniquely tailored and appropriately crafted shareholder proposals requesting increased information or the implementation of suitably broad policies at target firms on a case-by-case basis.

Reporting Contributions and Political Spending

Glass Lewis believes that disclosure of how a company uses its funds is an important component of corporate accountability to shareholders. In our view, a rigorous oversight process can minimize a company’s exposure to legal, reputational and financial risk by ensuring that corporate assets are used to enhance shareholder value in accordance with federal and state law, consistent with a company’s stated values, and the long-term interests of the company.

While corporate contributions to national political parties and committees controlled by federal officeholders are prohibited under federal law, corporations can legally donate to state and local candidates, organizations registered under 26 USC Sec. 527 of the Internal Revenue Code and state-level political committees. There is, however, no standardized manner in which companies must disclose this information. As such, shareholders often must search through numerous campaign finance reports and detailed tax documents to ascertain even limited information. Corporations also frequently join trade associations, generally paying dues to do so, as a means for corporate political action. However, trade associations are neither required to report funds they receive for nor spend on political activity. Therefore, the tracking of corporate expenditures to political causes through trade associations can be impossible, often leaving corporations unable to determine for themselves which causes or campaigns their dues or donations have gone to support. Since not all donations to trade organizations are used strictly for political purposes, we question how corporations are able to assess the efficacy of such donations or determine the effect of such expenditure on long-term shareholder value.

A-49

Further, the empirical evidence regarding the benefit to shareholders of corporate political contributions remains unclear. In one study of firm-level contributions to U.S. political campaigns from 1979 to 2004, researchers found that measures of support to candidates were positively and significantly correlated with a cross-section of future returns. This was especially the case when those contributions went to a large number of candidates in the same state as the contributing firm (Michael J. Cooper, Huseyin Gulen and Alexei V. Ovtchinnikov. “Corporate Political Contributions and Stock Returns.” SSRN. September 26, 2008). However, in a separate study of political contributions from 1991 to 2004, researchers found donations to be negatively correlated with future excess returns with only limited support for the contention that political donations represent an investment in political capital (Rajash K. Aggarwal, Felix Meschke and Tracy Yue Wang. “Corporate Political Contributions: Investment or Agency?” SSRN. August 11, 2008).

Given that political donations are strategic decisions intended to increase shareholder value and have the potential to negatively affect the company, we believe the board should either implement processes and procedures to ensure the proper use of the funds or closely evaluate the process and procedures used by management. At least one study found that close board oversight of lobbying strategies may minimize instances of the company contributing to causes that are not in shareholders best interests (Robert Repetto. “Best Practice in Internal Oversight of Lobbying Practice”. Yale Center for Environmental Law & Policy. September 1, 2006).

When evaluating whether the report requested would benefit shareholders, Glass Lewis seeks answers to the following three key questions:

· Is the Company’s disclosure comprehensive and readily accessible?

· How does the Company’s political expenditure policy and disclosure compare to its peers?

· What is the Company’s current level of oversight?

Glass Lewis will consider supporting a proposal seeking increased disclosure of corporate political expenditure and contributions if the firm’s current disclosure is insufficient, is lacking compared to its peers, and where there is inadequate board oversight, evidenced by some evidence or credible allegation that the Company is mismanaging corporate funds through political donations or has a record of doing so. We will, in each case, consider the merits of the proposal in the context of relevant company. If Glass Lewis discovers particularly egregious actions by the company, we will consider recommending voting against the governance committee members or other responsible directors.

Animal Welfare

Glass Lewis believes that it is prudent for management to assess potential exposure to regulatory, legal and reputational risks associated with all business practices including those related to animal welfare; failure to take action on certain issues may carry the risk of fines and damaging negative publicity. A high profile campaign launched against a company could result in shareholder action, a reduced customer base, protests and potentially costly litigation.

A-50

However, in general, we believe that the board and management are in the best position to determine policies relating to the care and use of animals. As such, we will typically vote against proposals seeking to eliminate or limit board discretion regarding animal welfare unless there is a clear and documented link between the board’s policies and the degradation of shareholder value.

For more information about

Glass Lewis’ policies

or approach to proxy analysis,

please visit

www.glasslewis.com

or contact

Chief Policy Officer

Robert McCormick at +1 415 678-4228

A-51

PART C: OTHER INFORMATION

Item 28. Exhibits:

(a)	Third Amended & Restated Declaration of Trust, previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(b)	Second Amended & Restated Bylaws of the Trust, previously filed with the Initial Registration Statement on Form N-1A on November 26, 2007 and incorporated by reference herein.

(c)	Instruments defining Rights of Security Holders. Not applicable.

(d)(1)	Form of Investment Advisory Agreement between the Registrant and FocusShares, LLC (the “Advisor”), previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(e)(1)	Form of Distribution Agreement between the Registrant and Foreside Fund Services, LLC (the “Distributor”), previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(e)(2)	Form of Authorized Participant Agreement, previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(f)	Bonus or Profit Sharing Contracts. Not applicable.

(g)	Form of Domestic Custody Agreement between the Registrant and JPMorgan Chase Bank, N.A. (“JPMorgan Chase”), previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(h)(1)	Form of Fund Servicing Agreement between the Registrant and JPMorgan Investor Services Co., previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(h)(2)	Form of Agency Services Agreement between the Registrant and JPMorgan Chase Bank, N.A., previously filed with post-effective amendment number 19 (under the Securities Act of 1933) and amendment number 20 (under the Investment Company Act of 1940) to the Registration Statement on December 10, 2010 and incorporated by reference herein.

(h)(3)	Sub-License Agreement between the Registrant and Advisor, to be filed by amendment.

(h)(4)	Form of PFO/Treasurer Agreement between the Registrant and Foreside Management Services, LLC, filed herewith.

(h)(5)	Form of Compliance Services Agreement between the Registrant and Foreside Compliance Services, LLC, filed herewith .

(i)	Opinion and consent of Katten Muchin Rosenman LLP, counsel to the Trust, to be filed by amendment.

(j)	Consent of [ ], independent registered public accounting firm to the Trust, to be filed by amendment.

(k)	Omitted Financial Statements. Not applicable.

(l)	Letter of Investment Intent, to be filed by amendment.

(m)	Rule 12b-1 Plan, to be filed by amendment.

(n)	Rule 18f-3 Plan. Not applicable.

(o)	Reserved. Not applicable.

(p)(1)	Form of Code of Ethics of the Registrant, filed herewith.

(p)(2)	Form of Code of Ethics of the Advisor, filed herewith.

(Other)	Powers of attorney

Item 29. Persons Controlled by or Under Common Control with Registrant

None.

Item 30. Indemnification

Reference is made to Section 8.5 of Article 8 of the Registrant’s Declaration of Trust which is incorporated herein:

The Registrant (also the “Trust”), organized as a Delaware statutory trust, operates pursuant to a Declaration of Trust dated December 8, 2010 (the “Declaration of Trust”) that permits the Registrant to indemnify every person who is, or has been, a Trustee, officer, employee or agent of the Trust, including persons who serve at the request of the Trust as directors, trustees, officers, employees or agents of another organization in which the Trust has an interest as a shareholder, creditor or otherwise (hereinafter referred to as a “Covered Person”), shall be indemnified by the Trust to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been such a Trustee, director, officer, employee or agent and against amounts paid or incurred by him in settlement thereof.

This indemnification is subject to the following conditions:

No indemnification shall be provided hereunder to a Covered Person:

(a) For any liability to the Trust or its Shareholders arising out of a final adjudication by the court or other body before which the proceeding was brought that the Covered Person engaged in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office;

(b) With respect to any matter as to which the Covered Person shall have been finally adjudicated not to have acted in good faith in the reasonable belief that his or her action was in the best interests of the Trust; or

(c) In the event of a settlement or other disposition not involving a final adjudication (as provided in paragraph (a) or (b) above and resulting in a payment by a Covered Person, unless there has been either a determination that such Covered Person did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office by the court or other body approving the settlement or other disposition, or a reasonable determination, based on a review of readily available facts (as opposed to a full trial-type inquiry), that he or she did not engage in such conduct, such determination being made by: (i) a vote of a majority of the Disinterested Trustees (as such term is defined in Section 8.5.5 of the Declaration of Trust) acting on the matter (provided that a majority of Disinterested Trustees then in office act on the matter); or (ii) a written opinion of independent legal counsel.

The rights of indemnification under the Declaration of Trust may be insured against by policies maintained by the Trust, and shall be severable, shall not affect any other rights to which any Covered Person may now or hereafter be entitled, shall continue as to a person who has ceased to be a Covered Person, and shall inure to the benefit of the heirs, executors and administrators of such a person. Nothing contained in the Declaration of Trust shall affect any rights to indemnification to which Trust personnel other than Covered Persons may be entitled by contract or otherwise under law.

Expenses of preparation and presentation of a defense to any claim, action, suit or proceeding subject to a claim for indemnification under Section 8.5 of the Declaration of Trust shall be advanced by the Trust prior to final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amount if it is ultimately determined that he or she is not entitled to indemnification under Section 8.5 of the Declaration of Trust, provided that either:

(a) Such undertaking is secured by a surety bond or some other appropriate security or the Trust shall be insured against losses arising out of any such advances; or

(b) A majority of the Disinterested Trustees acting on the matter (provided that a majority of the Disinterested Trustees then in office act on the matter) or independent legal counsel in a written opinion shall determine, based upon a review of the readily available facts (as opposed to the facts available upon a full trial), that there is reason to believe that the recipient ultimately will be found entitled to indemnification.

As used in Section 8.5.5 of the Declaration of Trust, the following words have the meanings set forth below:

(a) A “Disinterested Trustee” is one (i) who is not an Interested Person of the Trust (including anyone, as such Disinterested Trustee, who has been exempted from being an Interested Person by any rule, regulation or order of the SEC), and (ii) against whom none of such actions, suits or other proceedings or another action, suit or other proceeding on the same or similar grounds is then or has been pending;

(b) “Claim,” “action,” “suit” or “proceeding” shall apply to all claims, actions, suits, proceedings (civil, criminal, administrative or other, including appeals), actual or threatened; and

(c) “Liability” and “expenses” shall include without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities.

The Distribution Agreement provides that Foreside and the Trust agree to indemnify and hold harmless each other and each of their trustees/directors and officers and any person who controls the Trust or Foreside within the meaning of Section 15 of the 1933 Act against any loss, liability, claim, damages or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damages or expense and reasonable counsel fees incurred in connection therewith) arising out of or based upon (i) the allegation of any wrongful act of the Distributor of the Trust or any of their trustees/directors, officers or employees, (ii) the breach of any obligation, representation or warranty pursuant to the distribution agreement by the Trust or the Distributor, (iii) either party's failure to comply in any material respect with applicable securities laws, or (iv) allegation that the Registration Statement, Prospectus, Statement of Additional Information, Product Description, shareholder reports, any information or materials relating to the Trust included an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements not misleading, insofar as the statement or omission was made in reliance upon, and in conformity with information furnished by Foreside to the Trust or by the Trust to Foreside. In no case (i) is the indemnity of either party in favor of any Trust/Foreside affiliate to be deemed to protect any Trust/Foreside affiliate against any liability to the Trust or Foreside or its security holders to which such Trust/Foreside affiliate would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under the distribution agreement.

Item 31. Business and Other Connections of Investment Manager

See “Management” in the Statement of Additional Information. Information as to the directors and officers of the Advisor is included in its Form ADV filed with the SEC and is incorporated herein by reference thereto.

Item 32. Principal Underwriters

(a)

Foreside Fund Services, LLC, Registrant's underwriter, serves as principal underwriter for the following investment companies registered under the Investment Company Act of 1940, as amended:

1)	American Beacon Funds
2)	American Beacon Mileage Funds
3)	American Beacon Select Funds
4)	Henderson Global Funds
5)	Bridgeway Funds, Inc.
6)	Century Capital Management Trust
7)	Sound Shore Fund, Inc.
8)	Forum Funds
9)	Central Park Group Multi-Event Fund
10)	PMC Funds, Series of the Trust for Professional Managers
11)	Nomura Partners Funds, Inc.
12)	Wintergreen Fund, Inc.
13)	RevenueShares ETF Trust
14)	Direxion Share ETF Trust
15)	Javelin Exchange-Traded Trust
16)	AdvisorsShares Trust
17)	Liberty Street Horizon Fund, Series of the Investment Managers Series Trust
18)	DundeeWealth Funds
19)	U.S. One Trust
20)	Turner Funds
21)	Center Coast MLP Focus Fund, Series of the Investment Managers Series Trust

(b)	The following are officers and directors of Foreside Fund Services, LLC, the Registrant's underwriter. Their main business address is Three Canal Plaza, Suite 100, Portland, Maine 04101.

Name	Address	Position with Underwriter	Position with Registrant

Mark S. Redman	690 Taylor Road, Suite 150 Gahanna, OH 43230	President and Manager	None

Richard J. Berthy	Three Canal Plaza, Suite 100, Portland, ME 04101	Vice President, Treasurer and Manager	None

Jennifer E. Hoopes	Three Canal Plaza, Suite 100, Portland, ME 04101	Secretary	None

Nanette K. Chern	Three Canal Plaza, Suite 100, Portland, ME 04101	Vice President and Chief Compliance Officer	None

Mark A. Fairbanks	Three Canal Plaza, Suite 100, Portland, ME 04101	Vice President and Director of Compliance	None

(c)	Not applicable.

Item 33. Location of Accounts and Records

All accounts, books and other documents required by Section 31(a) of the Investment Company Act of 1940, as amended, and the rules thereunder are maintained at:

FocusShares, LLC

210 Summit Avenue - Suite C-11

Montvale, NJ 07645

JPMorgan Chase Bank, N.A.

One Chase Manhattan Plaza

New York, NY 10005

J.P. Morgan Investor Services Co.

70 Fargo Street

Boston, MA 02210

Foreside Fund Services, LLC

Three Canal Plaza, Suite 100

Portland, ME 04101

Item 34. Management Services

Not applicable.

Item 35. Undertakings

Not applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it has duly caused this Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of New York and State of New York on the 3rd day of February 2011.

	FOCUSSHARES TRUST


	By:	/s/ Erik Liik
		Erik Liik
		President

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following person in the capacities and on the date indicated.

Name	Title	Date


/s/ Karl-Otto Hartmann	Trustee	February 3, 2011
Karl-Otto Hartmann


/s/ Christopher C. Fox	Trustee	February 3, 2011
Christopher C. Fox


/s/ Michael J. LeVar	Trustee	February 3, 2011
Michael J. LeVar


/s/ Joan D. Malloy	Trustee	February 3, 2011
Joan D. Malloy


/s/ Patricia A. Milon	Trustee	February 3, 2011
Patricia A. Milon


/s/ Erik Liik	President	February 3, 2011
Erik Liik	(Principal Executive Officer)


/s/ Brent C. Arvidson	Chief Financial Officer and Treasurer	February 3, 2011
Brent C. Arvidson	(Principal Financial Officer)

EXHIBIT INDEX

(h)(4)		Form of PFO/Treasurer Agreement between the Registrant and Foreside Management Services, LLC

(h)(5)		Form of Compliance Services Agreement between the Registrant and Foreside Compliance Services, LLC

(p)(1)		Form of Code of Ethics of the Registrant

(p)(2)		Form of Code of Ethics of the Advisor

Other		Powers of Attorney

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933	x
Pre-Effective Amendment No.	¨
Post-Effective Amendment No. 20	x

Fund	CUSIP	Ticker

Focus Morningstar US Market Index ETF	34416W502	FMU
Focus Morningstar Large Cap Index ETF	34416W601	FLG
Focus Morningstar Mid Cap Index ETF	34416W700	FMM
Focus Morningstar Small Cap Index ETF	34416W809	FOS
Focus Morningstar Basic Materials Index ETF	34416W882	FBM
Focus Morningstar Communication Services Index ETF	34416W874	FCQ
Focus Morningstar Consumer Cyclical Index ETF	34416W866	FCL
Focus Morningstar Consumer Defensive Index ETF	34416W858	FCD
Focus Morningstar Energy Index ETF	34416W841	FEG
Focus Morningstar Financial Services Index ETF	34416W833	FFL
Focus Morningstar Health Care Index ETF	34416W825	FHC
Focus Morningstar Industrials Index ETF	34416W817	FIL
Focus Morningstar Real Estate Index ETF	34416W791	FRL
Focus Morningstar Technology Index ETF	34416W783	FTQ
Focus Morningstar Utilities Index ETF	34416W775	FUI

Focus Morningstar US Market Index ETF		1
Focus Morningstar Large Cap Index ETF		4
Focus Morningstar Mid Cap Index ETF		7
Focus Morningstar Small Cap Index ETF		10
Focus Morningstar Basic Materials Index ETF		13
Focus Morningstar Communication Services Index ETF		16
Focus Morningstar Consumer Cyclical Index ETF		19
Focus Morningstar Consumer Defensive Index ETF		22
Focus Morningstar Energy Index ETF		25
Focus Morningstar Financial Services Index ETF		28
Focus Morningstar Health Care Index ETF		31
Focus Morningstar Industrials Index ETF		34
Focus Morningstar Real Estate Index ETF		37
Focus Morningstar Technology Index ETF		40
Focus Morningstar Utilities Index ETF		43
Additional Description of the Principal Strategies of the Funds		46
Additional Description of the Principal Risks of the Funds		46
Additional Investment Strategies		50
Additional Risks		51
Continuous Offering		52
Creation and Redemption of Creation Units		53
Buying and Selling Shares in the Secondary Market		53
Management		54
Shareholder Information		56
Frequent Trading		57
Dividends, Distributions and Taxes		58
License Agreement		60
Code of Ethics		61
Fund Website and Disclosure of Portfolio Holdings		61
General Information		61
Financial Highlights		62
FocusShares Trust Privacy Policy		63

Management Fees	[·]	%
Distribution and Service (12b-1) Fees	0.00	%
Other Expenses(a)	[·]	%
Total Annual Fund Operating Expenses	[·]	%

YEAR		EXPENSES
1		$[·]
3		$[·]

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940	x
Amendment No. 21	x

Fund Name	Management Fee
Focus Morningstar US Market Index ETF		[•	]%
Focus Morningstar Large Cap Index ETF		[•	]%
Focus Morningstar Mid Cap Index ETF		[•	]%
Focus Morningstar Small Cap Index ETF		[•	]%
Focus Morningstar Basic Materials Index ETF		[•	]%
Focus Morningstar Communication Services Index ETF		[•	]%
Focus Morningstar Consumer Cyclical Index ETF		[•	]%
Focus Morningstar Consumer Defensive Index ETF		[•	]%
Focus Morningstar Energy Index ETF		[•	]%
Focus Morningstar Financial Services Index ETF		[•	]%
Focus Morningstar Health Care Index ETF		[•	]%
Focus Morningstar Industrials Index ETF		[•	]%
Focus Morningstar Real Estate Index ETF		[•	]%
Focus Morningstar Technology Index ETF		[•	]%
Focus Morningstar Utilities Index ETF		[•	]%

By telephone:	(866) 453-5199

By mail:	Foreside Fund Services, LLC
	Three Canal Plaza
	Portland, ME 04101
	Attn: ETF Services

On the Internet:	SEC Edgar database: www.sec.gov;
	Distributor website www.foreside.com or
	Trust website www.focusshares.com

GENERAL DESCRIPTION OF THE TRUST	1
EXCHANGE LISING AND TRADING	1
INVESTMENT OBJECTIVE AND POLICIES	2
INVESTMENT STRATEGIES AND RISKS	4
GENERAL CONSIDERATIONS AND RISKS	9
PORTFOLIO HOLDINGS DISCLOSURE	10
CONSTRUCTION AND MAINTENANCE OF THE UNDERLYING INDEXES	11
MANAGEMENT	13
CODE OF ETHICS	17
PROXY VOTING POLICIES AND PROCEDURES	17
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES	17
INVESTMENT ADVISORY, ADMINISTRATIVE AND DISTRIBUTION SERVICES	18
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	20
COUNSEL	20
PORTFOLIO TRANSACTIONS AND BROKERAGE	22
ADDITIONAL INFORMATION CONCERNING THE TRUST	22
BOOK ENTRY ONLY SYSTEM	23
CREATION AND REDEMPTION OF CREATION UNITS	24
DETERMINATION OF NET ASSET VALUE	29
INDICATIVE INTRA-DAY VALUE	29
DIVIDENDS AND DISTRIBUTIONS	30
FEDERAL INCOME TAXES	30
OTHER INFORMATION	35
FINANCIAL STATEMENTS	35

Name Of Trustee	Dollar Range of Equity Securities in FocusShares Trust (As of December 31, 2010)	Aggregate Dollar Range of Equity Securities in all Registered Investment Companies Overseen By Trustee in Family of Investment Companies (As of December 31, 2010)(1)

Karl-Otto Hartmann	None	None
Christopher C. Fox	None	None
Michael J. LeVar	None	None
Joan D. Malloy	None	None
Patricia A. Milon	None	None

Compensation Table
Name of Trustee	Aggregate Compensation From the Trust		Pension or Retirement Benefits Accrued as Part of the Trust’s Expenses		Estimated Annual Benefits Upon Retirement		Total Compensation From the Trust and the Fund Complex (1) Paid to Trustee
Karl-Otto Hartmann	$	22,750		N/A		N/A	$	22,750
Christopher C. Fox	$	17,750		N/A		N/A	$	17,750
Michael J. LeVar	$	17,750		N/A		N/A	$	17,750
Joan D. Malloy	$	17,750		N/A		N/A	$	17,750
Patricia A. Milon		None		N/A		N/A		None

Name of Fund	Advisory Fee Rate

Focus Morningstar US Market Index ETF		[•	]%
Focus Morningstar Large Cap Index ETF		[•	]%
Focus Morningstar Mid Cap Index ETF		[•	]%
Focus Morningstar Small Cap Index ETF		[•	]%
Focus Morningstar Basic Materials Index ETF		[•	]%
Focus Morningstar Communications Services Index ETF		[•	]%
Focus Morningstar Consumer Cyclical Index ETF		[•	]%
Focus Morningstar Consumer Defensive Index ETF		[•	]%
Focus Morningstar Energy Index ETF		[•	]%
Focus Morningstar Financial Services Index ETF		[•	]%
Focus Morningstar Health Care Index ETF		[•	]%
Focus Morningstar Industrials Index ETF		[•	]%
Focus Morningstar Real Estate Index ETF		[•	]%
Focus Morningstar Technology Index ETF		[•	]%
Focus Morningstar Utilities Index ETF		[•	]%

Portfolio Manager	Registered Investment Companies				Other Pooled Investment Vehicles				Other Accounts
	Number of Accounts		Total Assets ($mm)		Number of Accounts		Total Assets ($mm)		Number of Accounts		Total Assets ($mm)

Kristopher A. Wallace		0	$	0		0	$	0		1	$	25

Travis Trampe		0	$	0		0	$	0		1	$	25

ASSETS:

Cash	$	100,000

TOTAL ASSETS	$	100,000

Net assets	$	100,000

Components of Net Assets:
Paid-in Capital	$	100,000

Shares of beneficial interest outstanding (unlimited amount authorized, no par value)		4,000

Net asset value per share	$	25.00

I. A Board of Directors That Serves the Interests of Shareholders	A-8
Election of Directors	A-8
Independence	A-8
Voting Recommendations - Board Independence	A-10
Committee Independence	A-10
Independent Chairman	A-10
Performance	A-11
Voting Recommendations - Performance	A-11
Audit Committees and Performance	A-12
Standards for Assessing the Audit Committee	A-12
Compensation Committee Performance	A-15
Nominating and Governance Committee Performance	A-17
Board-level Risk Management Oversight	A-19
Experience	A-19
Voting Recommendations - Director Experience	A-19
Other Considerations	A-20
Conflicts of Interest	A-20
Size of the Board of Directors	A-21
Controlled Companies	A-21
Independence Exceptions	A-21
Size of the Board of Directors	A-22
Audit Committee Independence	A-22
Mutual Fund Boards	A-22
Declassified Boards	A-23
Mandatory Director Retirement Provisions	A-24
Director Term and Age Limits	A-24
Requiring Two or More Nominees per Board Seat	A-25
Shareholder Access	A-25
Majority Vote for the Election of Directors	A-25
The plurality vote standard	A-26
Advantages of a majority vote standard	A-26
II. Transparency and Integrity of Financial Reporting	A-27
Auditor Ratification	A-27
Voting Recommendations on Auditor Ratification	A-27
Pension Accounting Issues	A-28
III. The Link Between Compensation and Performance	A-29
Full Disclosure of Executive Compensation	A-29
Advisory Vote on Executive Compensation (“Say-on-Pay”)	A-29
Limits on Executive Compensation	A-30
Limits on Executive Stock Options	A-30
Equity-Based Compensation Plans	A-31

Option Exchanges	A-32
Performance-Based Options	A-32
Option Backdating, Spring-Loading, and Bullet-Dodging	A-33
162(m) Plans	A-33
Director Compensation Plans	A-34
IV. Governance Structure and the Shareholder Franchise	A-35
Anti-Takeover Measures	A-35
Poison Pills (Shareholder Rights Plans)	A-35
NOL Poison Pills	A-35
Fair Price Provisions	A-36
Reincorporation	A-36
Authorized Shares	A-37
Advance Notice Requirements for Shareholder Ballot Proposals	A-38
Voting Structure	A-38
Cumulative Voting	A-38
Supermajority Vote Requirements	A-39
Transaction of Other Business	A-39
Anti-Greenmail Proposals	A-39
Mutual Funds: Investment Policies and Advisory Agreements	A-39
V. Environmental, Social and Governance Shareholder Initiatives	A-41
Governance	A-41
Right of Shareholders to Call a Special Meeting	A-41
Right of Shareholders to Act by Written Consent	A-42
Board Composition	A-42
Compensation	A-43
Severance Agreements	A-43
Advisory Vote on Executive Compensation (“Say-on-Pay”)	A-43
Bonus Recoupments (“Clawbacks”)	A-44
Linking Executive Pay to Social Criteria	A-45
Environment	A-45
Climate Change, Green House Gas Emission Disclosure Proposals	A-45
Sustainability	A-46
Sustainable Forestry	A-46
Social Issues	A-47
Non-Discrimination Policies	A-47
MacBride Principles	A-47
Human Rights	A-48
Military and US Government Business Policies	A-48
Foreign Government Business Policies	A-48
Health Care Reform Principles	A-49
Tobacco	A-49
Reporting Contributions and Political Spending	A-49
Animal Welfare	A-50