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Direxion Shares announces reverse share split of ETF

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Direxion is to execute a 1-for-10 reverse split of the shares of Direxion Daily Emerging Markets Bear 3x Shares ETF (EDZ) for shareholders of record after the close of the markets on Wednesday, March 3, 2010.

EDZ shares will begin trading on NYSE Arca, Inc. (NYSE Arca) on a split-adjusted basis on Thursday March 4, 2010. The CUSIP for EDZ will change to 25459W 482 from 25459W 409.
 
As a result of the EDZ 1-for-10 reverse split, every ten shares of EDZ will be exchanged for one share. Accordingly, the number of EDZ shares issued and outstanding, will decrease by approximately 90% and the net asset value (NAV) and price of each share at the opening of the markets on Thursday March 4, 2010 will increase 10-fold.  
 
The shares of each fund will be offered on a split-adjusted basis on March 4, 2010. The total market value of the EDZ shares outstanding will not be affected as a result of this reverse split except with respect to the redemption of fractional shares.
Shareholders of EDZ on March 3, 2010 will participate in the reverse splits. The Depository Trust Company ("DTC"), the registered owner of all EDZ shares, has been notified of the reverse splits and has been instructed to adjust each shareholder’s investment accordingly.
 
As a result of the reverse split, a shareholder of EDZ could potentially hold a fractional share.  However, fractional shares cannot trade on NYSE Arca. In such instances,, EDZ will redeem for cash a shareholder’s fractional shares at the fund’s split-adjusted NAV as of March 3, 2010. Such redemptions could cause a shareholder to realize a gain or loss. Otherwise, the reverse split will not result in a taxable transaction for holders of EDZ shares. No transaction fee will be imposed on shareholders for such redemption.
 
As a result of the reverse split, EDZ will have outstanding one aggregation of less than 50,000 shares to make a creation unit, or an "odd lot unit." Thus, each fund will provide one authorized participant with a one-time opportunity to redeem the respective odd lot unit at its split-adjusted NAV, or at the NAV on such date the authorized participant seeks to redeem the odd lot unit.

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