CFM RC VA20 Arbitrage Index
SRI Operating Memorandum
CFM RC VA20 Arbitrage Index SRI Operating Memorandum
Introduction The CFM RC VA20 Arbitrage Index (the “Index”) was formed by Capital Financial Markets Limited (“CFML”) in June 2011.
Operating Memorandum This Operating Memorandum details the basis by which the Index will be managed and how the index levels are calculated.
Reference Strategy The Index is based on the performance of an underlying reference strategy called the CFM RC VA20 Arbitrage Strategy (the “Strategy”) and the rest of this document details how this Strategy operates.
Strategy Manager The Strategy is managed by Capital Financial Markets Limited (“CFML” or the “Strategy Manager”) of Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG.
Participation Units Participation in the Strategy will be sub-divided into standard participation units with a nominal value of £1 each. The Strategy Manager may issue additional units or cancel units as necessary to facilitate contributions to or withdrawals from the Strategy.
Valuation The Strategy will be valued on a mark to market basis quarterly on the last calendar day of each quarter. The Strategy Manager may at its absolute discretion determine additional valuation dates on an ad-hoc basis. The Strategy’s value will be determined by deducting the total liabilities from the total assets of the Strategy. The value of the assets and liabilities of the Strategy will be determined in accordance with CFML’s standard strategy valuation policy, which is available on request and may be published from time to time on CFML’s website.
CFML is a specialist provider and issuer of contracts for difference and spread bet contracts. CFML is licensed by the Isle of Man Financial Supervision Commission (“FSC”).
Unit Pricing
CFML is a wholly owned subsidiary of Capital International Limited (“CIL”).
The Directors reserve the right to adjust the unit price on any valuation date to reflect the approximate true cost or value per unit associated with any investment or redemption from the strategy.
CFML is a member of the Capital International Group.
Custodian & Broker The Strategy Manager has appointed Capital International Limited (“CIL”) of Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG as lead custodian and broker to the Strategy. CIL provides international dealing, custody, investment management and portfolio administration services. At the time of publication, CIL administered over $4 billion of assets. CIL is a member of the London Stock Exchange and is licensed by the FSC. CIL is a member of the Capital International Group.
The net asset value per unit will be calculated by dividing the net asset value of the Strategy by the total number of units participating in the Strategy.
Publication of Unit Pricing The unit price of the strategy will be available on request from CFML. The unit price may also be published on CFML’s website. CFML will additionally endeavour to maintain pricing of the strategy on Bloomberg.
Contributions & Withdrawals
Fees, Charges and Expenses
The Strategy is a private strategy operated by CFML. From time to time CFML may choose to contribute additional monies to or withdraw monies from the Strategy at its absolute discretion.
he following fees and charges will be applied to the Strategy.
Contribution and withdrawals may only be made on a valuation date. The amount of the contribution or withdrawal (after deduction of any charges) divided by the unit price on that valuation date will determine the number of units invested or disinvested. The Strategy is subject to certain restrictions and minimum notice periods with respect to withdrawals.
Investment Objective To track the performance of the Venture 20 Cell, a Cell of the Venture Assets PCC (the “Fund”).
Base Currency Sterling
Management Approach The Strategy is passively managed by the Strategy Manager and is intended to track the performance of the Fund.
Leverage & Borrowing Powers The Strategy will not utilise leverage or borrow against the assets of the Strategy.
Restrictions The Strategy only tracks the Fund, and no other securities. It is anticipated that the Strategy will hold a modest cash balance from time to time.
An initial Set-Up Fee of 1.0% will be deducted at outset. An Investment Administration Fee will be calculated and deducted quarterly, as follows: 0.7% per annum on first £1m of assets valued in the Strategy 0.5% per annum on assets held in the Strategy of between £1m and £2.5m 0.3% per annum on assets held in the Strategy of between £2.5m to £5m 0.2% per annum on assets held in the Strategy of between £5m to £10m 0.1% per annum on assets held in the Strategy in excess of £10m Financial Advisers may be paid initial and ongoing commission and these amounts will be levied in addition to the Set-Up Fee and the Investment Administration Fee. For further details prospective investors should contact their financial advisers. The Set-Up Fee and the Investment Administration Fees are inclusive of all custody and administration charges. All dealing and clearing costs, miscellaneous and legal costs will passed onto the Strategy.
Risk Due to the focused nature of the investment Strategy, there is likely to be higher levels of volatility and risk when compared to more diversified strategies. It is the responsibility of the regulated adviser, recommending the Index to a client, to provide a copy of this Memorandum and such relevant documentation relating to the Fund, in order that the client is able to adequately understand the risks of entering into a spread bet against the Index.
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Adviser Declaration SRI Operating Memorandum The constituents of CFM RC VA20 Arbitrage Index include certain non-regulated funds, including but not limited to the Venture 20 Cell - a Cell of the Venture Assets PCC (the “Fund”), which is only suitable for persons that are Experienced, Sophisticated, Professional or Institutional Investors and are sufficiently experienced to understand the risks associated with an investment in the Fund. This declaration is to be completed by the financial adviser who has advised the investor with regard to a spread bet referenced against the CFM RC VA20 Arbitrage Index. I confirm that:a) I am the appointed financial adviser for the client
; and
b) I have discussed the features and risks attendant to this CFM RC VA20 Arbitrage Index and the constituent exposure to the performance of the Fund; and c) I have discussed the specific risks attendant to an exposure to the Fund and the possible impact thereof on the performance of the client’s spread bet against the CFM RC VA20 Arbitrage Index; and d) I have provided the client with a copy of this Index Memorandum and such relevant documentation relating to the Fund to enable the client to adequately understand the risks of entering into a spread bet against the CFM RC VA20 Arbitrage Index; and e) the client has confirmed that they are a sufficiently qualified and experienced investor to understand these risks and wish to deal in spread bets referenced against the CFM RC VA20 Arbitrage Index and I consider this a suitable transaction for the client. I am not aware of any information that would lead me to believe that the client does not understand and accepts these risks.
Signature Print Name Business Name
Capital Financial Markets Limited Capital House Circular Road Douglas Isle of Man IM1 1AG www.capital-iom.com T : +44 (0) 1624 654200 E: info@capital-iom.com Capital International Limited and Capital Financial Markets Limited are members of the Capital International Group Capital International is a member of the London Stock Exchange and is licensed by the Isle of Man Financial Supervision Commission Capital Financial Markets Limited is licensed by the Isle of Man Financial Supervision Commission Registered Address: Capital House, Circular Road, Douglas, Isle of Man, IM1 1AG
CFML - SRIOM RC VA20 Arbitrage Index - V1.01-06.11
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