Stargate Capital Management Limited is the investment manager for FXPerpetual.

Transcription

1 Capital Protected Managed Account Information Brochure for Master Introducer Networks This document has been issued for informational purposes only and does not constitute an offer or solicitation to subscribe to an FXPerpetual Managed Account. Stargate Capital Management Limited is the investment manager for FXPerpetual. Authorised and Regulated by the Financial Conduct Authority (No ) Address: 71 Queen Victoria Street, London, EC4V 4BE, United Kingdom.

2 Information Brochure Returns are not guaranteed. The high degree of leverage can work against you as well as for you. You may get back less than originally invested and should be fully aware that you may experience loss of capital. Whilst FXPerpetual employs five risk control strategies there is a risk of capital loss, trading on a margin basis means that any market movement will have a proportionate effect on your deposited capital and may result in the loss of your entire balance. You may also potentially be exposed to an additional loss over and above your initial investment, for which you will be liable for any resulting deficit. The level of return will depend on the performance of the Managed Account. Stop losses are not guaranteed. Basket Stop Reserve (BSR) is not guaranteed to protect against losses. Investment in the FXPerpetual Managed Account is not covered by the FCA Cancellation Rules. There is therefore no regulatory requirement to allow cancellation, however cancellation requests will be considered but may incur an administration charge. Tax legislation may change and this may have an adverse affect on the tax treatment of your investment.

3 Glossary of Terms 24/5 Trading Forex trading will commence from the time Wellington, New Zealand opens for trading until New York, USA closes for trading Algorithmic Trading System Developer Account Anniversary Date Additional Deposits Applicant/Client/Investor Basket Stop Reserve (BSR) Bear Market Broker Bull Market Capital/Investment Capital Closed Trade Basket Profit and Loss Balance Currency Drawdown Drawing Speed Forex Guardian Hedge UK Innovative TI Ltd registered in England & Wales No: whose registered office is at 1000 Lakeside, North Harbour, Portsmouth, PO6 3EN The Anniversary Date is calculated 12 months from the Dealing Day the account starts trading. The Anniversary Date is reset every 12 Months. Account deposits are permitted at anytime. Additional account deposits equal to or less than 10,000 can be added at any time, these account deposits will be protected by BSR and covered under the original accounts BSR anniversary date. Deposits exceeding a total of 10,000 will be placed in a new sub account which will have its own BSR Anniversary Date. The person, persons, or entity applying for the Managed Account BSR is similar to a cash flow overdraft and an insurance pool, account holders are entitled to make a claim at their account anniversary to compensate for any net loss on their account, net loss is measured by closed trade basket profit and loss. BSR claims are non recourse to the account holder meaning they are not expected to be paid back similar to an insurance payout. A market in which prices are falling The Broker provides a Trading Account. The Broker acts as an agent in the forex market, working on behalf of the client to buy and sell currencies. A market in which prices are rising. The amount of funds that are managed. Closed trade basket profit and loss balance is the value of each account as measured by profits and losses made as each trade basket closes, either for a profit or loss Any form of money issued by the government or central bank and used as legal tender and a basis of trade. The effect of negative open trades on the current Managed Account equity. Any losses are not applied to the account balance until trades are closed. The difference between the buying and selling price of a currency contract Foriegn Exchange - currency trading The Guardian is an automated risk management strategy that employs hedge trades to protect trade baskets from stopping out for crystallised losses. High Watermark Discretionary Investment Manager (DIM) Leverage Long Position Managed Account Managed Account Balance Managed Account Equity Margin Open Equity PAMM Performance Fee Pip Set-Up Fee Stop Losses Short Position Surrender Value Technical Advisor Trade Basket Trading Account Trading Margin Trading Platform A High Watermark value is calculated by the manager for each account based on profits and losses made by closed trade baskets. The High Watermark value represents the highest value each account has historically reached, performance fees are only deducted from returns over the High Watermark level. Stargate Capital Management Ltd, Registered Office at 71 Queen Victoria Street, London, EC4V 4BE, United Kingdom with FXPerpetual C/O Suite Central 216, 1000 Lakeside, North Harbour, Portsmouth, PO6 3EN Leverage is a loan facility provided by the Broker which enables larger currency trades to take place, but without any physical borrowing. It means that only a fraction of the capital on deposit is required in order to place a trade. This is known as trading on margin A position taken in anticipation of a rising market, to go long means to buy a currency The Managed Account is a Trading Account managed by the Discretionary Investment Manager ( DIM ) under a power of attorney arrangement The current investment capital on deposit with the Broker The Managed Account balance plus the current value of any open trades The capital held in Trading Account used as security for leveraged forex trading Open equity represents the spot valuation of each open trade, the spot value is calculated by the broker and will fluctuate based on price movements up and down. The open equity value represents unrealised profits and losses or open trades. Percentage Allocation Money Management - A software application which allows a money manager to manage multiple trading accounts on one trading platform. Performance fees are deducted by the manager from profits made on each account over that has increased over its High Watermark level In forex trading, a Percentage In Point or Price Interest Point ( pip ) is the smallest change in price of a given currency pair 1% of starting account balance per month for the first 5 months A pre-defined buy or sell order that is used to close a trade when the market has moved a specified amount against the position, therefore limiting the loss of a trade. Stop losses cannot be guaranteed. A position taken in anticipation of a falling market, to go short means to sell a currency The surrender value will reflect the accounts percentage allocation of the trades open on the MAM Master account. The clients will then be notified of the Surrender Value of their account and then has the option to accept or decline the withdrawal request. If the client accepts the surrender value, the account will be withdrawn from the Managed Account program within 48hrs at the Surrender Value, if the clients declines to take the Surrender value the account will continue to be traded. UKITI is the Technical Advisor to the Investment Manager. Trade baskets are a series of counter trend trades placed at strategic levels, the manager expects a high percentage of trade basket to close on price retracements making a pre determined profit level. An account opened with the Broker to enable trades to be placed into the forex market Margin is the amount of money needed as a good faith deposit to open a position with the broker. It is used by the broker to maintain our positions. IT software supplied by the Broker to facilitate the analysis, placing and execution of currency trade, e.g MT4

4 Account Overview Aims The Managed Account will trade a range of global currencies via a portfolio of algorithms with the aim of returning a smoothed return whilst protecting the original capital invested, however neither is guaranteed. Capital Protected Managed Account FXPerpetual is the brand name for a Capital Protected Managed Currency Account. FXPerpetual offers a unique systematic, capital protected, absolute return Forex Managed Account. The minimum investment is 10,000 GBP. There is no fixed term however the Managed Account should be considered as a medium-term investment. FXPerpetual is comprised of 3 components: 1. An FCA authorised and regulated Discretionary Investment Manager (DIM) who has limited power of attorney over the accounts 2. FCA authorised and regulated Account Custodian and Execution Brokers who hold all client funds in segregated accounts and executes the trade orders from the DIM 3. The capital protection provider who operates a reserve (Basket Stop Reserve) to cover the risk of capital loss. The Discretionary Investment Manager ( DIM ) Stargate Capital Management Limited ( Stargate ) Authorised and regulated by the Financial Conduct Authority (FCA) (No: ) Address: 71 Queen Victoria Street, London, EC4V 4BE, United Kingdom. Brokers Hantec Markets Limited ( Hantec ) Authorised and regulated by the Financial Conduct Authority (FCA) (No: ) Address: Hantec Markets Limited, Hantec House, Wilfred Street, London, SW1E 6PL. VARIANSE VARIANSE is a trading name of Vibhs Financial Limited. Vibhs Financial Limited is authorised and regulated by the Financial Conduct Authority (FCA) (No: ) Address: Aml Maybrook House, 97 Godstone Road, Caterham, Surrey, CR3 6RE The Basket Stop Reserve ( BSR ) Provider UK Innovative TI Limited ( UKITI ) Registered in England and Wales ( ) Address: 1000 Lakeside, North Harbour, Portsmouth, Hampshire PO6 3EN, United Kingdom.

5 Fees Set-Up Fee Trade Execution Charges Performance Fees 1% of starting account balance per month for the first 5 months of trading. Costs of trade execution are charged at variable rates up to 5 pips over and above the wholesale market rate. These amounts will only be increased with 30 days written notice The manager reserves the right to change the trade execution amount at any time. Performance fees of 35% of any monthly overall profit (after trade execution charges) will be deducted. The high watermark is set when a new high monthly balance is achieved (net of fees) each month. The high watermark will be calculated on closed trade basket profits and losses. The performance fee deducted is paid to the Discretionary Investment Manager and the Technical Advisor to the Discretionary Investment Manager. Fees may be subject to VAT and/or other applicable statutory taxes. The Strategy FXPerpetual is a fully automated systematic algorithmic trading strategy that operates in real time by reacting to exchange rate price movements across a highly diversified portfolio of global exchange rates. The strategy is 100% reactive and does not rely on any form of price prediction. The strategy is designed to maximize profits for investors by capitalizing on the reversal of price trends in both bull and bear markets. The strategy does not attempt to predict future price trends; instead it reacts to current price movements, placing trades in the opposite direction to a price trend as it unfolds, e.g. placing sell orders in bull markets and buy orders in bear markets. As these trades are made against a price trend, they are grouped together into a Trade Basket. Each trade put into the Trade Basket is of higher value than the last, dynamically calculated in a way that is designed to minimise the amount of trend reversal needed to close all trades in the respective trade basket. The systematic nature of the strategy provides key advantages over a manual approach including: 1. The ability to take full advantage of the 24/5 nature of the Forex market 2. The ability to trade the strategy to multiple currency pairs simultaneously 3. Trade execution orders are carried out more efficiently 4. Human emotion is eliminated 5. Automatic execution of hedging and stop loss risk controls. Each basket is assigned a minimum target price at which all trades are closed with the aim of generating a profit for investors. Due to the composition of the baskets, only a small price trend reversal may be required to close trades at the specified profit level. If a price trend continues beyond the original target, the number of trades in the basket increases and the target price is dynamically adjusted to maximise the profitability of the trade basket.

6 Risk Management Diversification The strategy trades up to 25 currency pairs simultaneously with up to 4 algorithms applied to each currency pair, which means up to 100 algorithms are trading in a highly diversified portfolio. Each algorithm is assigned a low percentage of investment capital, thereby limiting the effect of market risk in high volatile market conditions. The Guardian Hedge If the price trend does not reverse an automated Guardian Hedge strategy is employed. The Guardian Hedge strategy trades an equal or greater value of the trades in the opposite direction to the existing basket of trades. The Guardian Hedge is designed to freeze the effect of account equity drawdowns. Guardian Hedge trades are closed on the reversal of price trends, enabling the existing trades in the trade basket to close at the pre-determined profit level. Basket Stop Loss In the event of a failure of the Guardian Hedge and the remaining basket of trades fail to recoup the loss, a basket stop loss is activated. Example of Risk Controls In this example we showcase how the Guardian Hedge strategy works. This was taken from a live trading session on the 15th December As the trend goes long, the trade basket begins to form with a series of short trades. After the 15th trade our system detects that the trend has a likely chance of continuing. It places a guardian trade that is of equal value to the trade basket (the 15 red trades before it). The trend continues as predicted and the Guardian Hedge protects the trade basket from futher drawdown (the blue area). Once the trend retraces, the Guardian Hedge trade is closed for a profit. The strategy places one further trade at level 16 before the price continues to retrace further and close the basket for a net profit. The Guardian Hedge protected the trade basket against a sustained trend, allowing it to resume trading when conditions were more favourable.

7 Basket Stop Reserve (BSR) The Basket Stop Reserve (BSR) makes FXPerpetual unique. The BSR is a unique capital protection reserve provided by UKITI which enables account holders to claim back trading losses on their account anniversary. The BSR is funded from UKITI s trade execution revenue. At the first account anniversary, if the account value (measured by the closed trade balance) is lower than the account start balance, the account holder is entitled to claim back the loss from the BSR. In subsequent years, if the account value (as measured by closed trade balance) is lower than the previous anniversary balance, the account holder is entitled to claim back the loss from the BSR. This means that investors can lock in any profits they ve made over the past 12 months and continue to trade with capital protection at the new value. The BSR applies to any net trading losses caused by market risks and does not apply in instances where losses were caused by failure to perform by the trade execution broker or any technology failures. UKITI holds the reserve to fund BSR claims, as measured by the closed trade value in a seperate reserve account. Open trade positions are not taken into consideration when applying the BSR. A partial redemption of an account prior to the clients Anniversary Date resets the BSR anniversary to 12 months from the partial redemption. If insufficient reserve is available, BSR claims can be deferred at the discretion of UKITI. UKITI reserves the right (following any period of adverse performance) to defer any BSR claim date for up to 12 months.

8 FAQ What is Forex? Foreign Exchange is the simultaneous buying of one currency and selling of another. The foreign exchange market (forex) is the largest financial market in the world, with a volume of over $4 trillion* daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the forex market has no physical location or central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the forex market to operate on a 24-hour/5 days a week basis, spanning from one zone to another across the major financial centres. Typical traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions, although Governments would not normally be trading for profits. Trading volume has increased rapidly over time, especially since exchange rates were allowed to float freely in *Source: Bank for International Settlements (December 2010). How are the trading risks mitigated? The Investment Manager will employ a defined selection of techniques with the aim of mitigating the risks associated with forex trading and smoothing volatility. 1) Diversification of Capital. The strategy trades multiple currency pairs simultaneously via the application of multiple algorithms. Each algorithm is assigned a low percentage of investment capital, thereby limiting the effect on the overall account balance in adverse market conditions. Each algorithm opens a series of trades (Trade basket) within a counter trend strategy, trade baskets require a trend price reversal to close each basket at a pre defined profit*. 2) If price trends do not reverse an automated Guardian Hedge** strategy is employed. A Guardian Hedge is a series of trades equal to or greater than the value of the trades in the basket placed in the direction of the price trend. As these trades are placed in the opposite direction to the basket, the basket trades are hedged with the aim of freezing and/or eliminating the effect of any negative trades (known as drawdown ). Once the trend begins to reverse, the Guardian Hedge is closed and the trade basket continues until it closes at the pre-determined profit level. 3) In the event of a failure of the Guardian Hedge a basket stop loss is employed. Trade basket stop events cause crystallised losses on the account. 4) In the event of trade basket stop events causing a net loss to your account as measured by closed trade baskets on your account, any net loss will be credited to your account via a non recourse Basket Stop Reserve (BSR) on the annual anniversary of your account opening.*** *Trade basket profit levels cannot be guaranteed. ** The Guardian Hedge strategy cannot be guaranteed to eliminate drawdown. *** See terms of the BSR as outlined in the FXPerpetual account opening application.f.a.q

9 How do I find out the current value of my Account? Once your Managed Account has commenced trading, you will receive a monthly statement detailing your Managed Account equity as of the last business day of the previous month. How is my capital protected against provider failure? The Broker is required to hold your investment capital in a segregated bank account. Your capital will be deposited into a client money bank account. If the Discretionary Investment Manager or Brokers were to become insolvent, all investment capital held in the segregated bank accounts would be protected. Can I top up my Account with additional investment capital? Yes, the minimum acceptable amount for a Managed Account top up is 1,000 GBP. Deposits over 10,000 will be deposited under a new sub-account. How can I make a partial withdrawal from my Account? Should you wish to make a full or partial withdrawal, you must first notify FXPerpetual in writing by ing admin@fxperpetual.com. Please include information such as your name, account number, withdrawal amount and the reason for the withdrawal. Once received, a member of the FXPerpetual Admin team will contact you to discuss the withdrawal in more detail and, should you still wish to proceed, you will be issued with a broker withdrawal form to submit to the Broker. Your withdrawal will be processed on the Dealing Day and should you request a full withdrawal, you will be issued with a Surrender Value. FXPerpetual will liaise with the broker to facilitate the withdrawal and you will be notified by FXPerpetual once the process is complete. Depending on the withdrawal request timing, you may affect your ability to claim against the BSR. Withdrawals will be processed in line with Terms and Conditions as detailed in the application form. How does a Managed Account affect my tax situation? If you are in any doubt about your tax situation we recommend you seek professional advice from a qualified tax adviser. Stargate does not provide individual tax advice. Am I protected by BSR if I close my account or make a partial withdrawal during the yearly protection period? No, closing your account or withdrawing funds after a basket stop will make your account ineligible to redeem your losses via BSR for that basket stop. How do I apply for my Managed Account? Please follow account opening process as detailed on our website - What happens if I want to complain? Stargate is committed to providing a first-class investment management service. If for any reason you are not satisfied with any aspect of our service, please let us know as soon as possible using the details below: admin@fxperpetual.com This document is issued by Stargate Capital Management Limited which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA) and is for informational purposes only. This document does not constitute an offer or a solicitation to subscribe to an FXPerpetual Managed Account Stargate Capital Management Limited Authorised and Regulated by the Financial Conduct Authority (No ) Address: 71 Queen Victoria Street, London, EC4V 4BE, United Kingdom.