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FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2012
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]

NOTE 3 – FEES PAID BY THE FUND AND RELATED PARTY TRANSACTIONS

 

USCF Management Fee

 

Under the LP Agreement, USCF is responsible for investing the assets of USBO in accordance with the objectives and policies of USBO. In addition, USCF has arranged for one or more third parties to provide administrative, custody, accounting, transfer agency and other necessary services to USBO. For these services, USBO is contractually obligated to pay USCF a fee, which is paid monthly, equal to 0.75% per annum of daily average net assets.

 

Ongoing Registration Fees and Other Offering Expenses

 

USBO pays all costs and expenses associated with the ongoing registration of its units subsequent to the initial offering. These costs include registration or other fees paid to regulatory agencies in connection with the offer and sale of units, and all legal, accounting, printing and other expenses associated with such offer and sale. For the years ended December 31, 2012, 2011 and 2010, USBO did not incur registration fees and other offering expenses.

 

Directors’ Fees and Expenses

 

USBO is responsible for paying its portion of the directors’ and officers’ liability insurance for USBO and the Related Public Funds and the fees and expenses of the independent directors who also serve as audit committee members of USBO and the Related Public Funds organized as limited partnerships and, as of July 8, 2011, the Related Public Funds organized as a series of a Delaware statutory trust. USBO shares the fees and expenses on a pro rata basis with each Related Public Fund, as described above, based on the relative assets of each fund computed on a daily basis. These fees and expenses for the year ended December 31, 2012 were $540,586 for USBO and the Related Public Funds. USBO’s portion of such fees and expenses for the year ended December 31, 2012 was $9,844. For the years ended December 31, 2011 and 2010, these fees and expenses were $607,582 and $1,107,140, respectively for USBO and the Related Public Funds. USBO’s portion of such fees and expenses for the year ended December 31, 2011 was $4,593 and for the period ended December 31, 2010, USBO’s portion of such fees and expenses was $421. Effective as of April 1, 2010, USBO became responsible for paying its portion of any payments that may become due to the independent directors pursuant to the deferred compensation agreements entered into between the independent directors, USCF, USBO and the Related Public Funds.

 

Investor Tax Reporting Cost

 

The fees and expenses associated with USBO’s audit expenses and tax accounting and reporting requirements are paid by USBO. These costs were approximately $75,000, $75,000 and $160,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

 

Other Expenses and Fees and Expense Waivers

 

In addition to the fees described above, USBO pays all brokerage fees and other expenses in connection with the operation of USBO, excluding costs and expenses paid by USCF as outlined in Note 4 below. USCF has voluntarily agreed to pay certain expenses typically borne by USBO, to the extent that such expenses exceed 0.15% (15 basis points) of USBO’s NAV, on an annualized basis, through at least June 30, 2013. USCF has no obligation to continue such payments into subsequent periods. For the year ended December 31, 2012, USCF waived $47,248 of USBO’s expenses. This voluntary waiver is in addition to those amounts USCF is contractually obligated to pay as described in Note 4.