The Fund Manager may provide investment services to Elective Professional Clients in accordance with FSA rules. Under these rules, the Fund Manager may treat as an Elective Professional Client a customer who would otherwise be a Retail Client if:
• it has taken reasonable care to determine that the customer has sufficient experience and understanding to be classified as an Elective Professional Client; and
• it has given written warning to the customer of protections under the regulatory system which the customer will lose; and
• it has given the customer sufficient time to consider the implications of being classified as an Elective Professional Client; and
• it has obtained the customer’s separate written consent or is otherwise able to demonstrate that informed consent has been given.
The following factors will be taken into consideration when determining whether you have the requisite experience and understanding:
• your knowledge and understanding of the relevant investments and markets, and of the risks involved;
• the length of time that you have been active in these markets and the frequency of your dealings;
• the size and nature of transactions that you have undertaken in these markets; and
• your financial standing.
If you have been advised by an authorised intermediary, who is able to advise on EIS investments and who completes Section 6 of the Application Form in the Calculus Capital EIS Fund 10 Information Memorandum, you will be treated as having satisfied the above criteria. However, if you have applied directly you may have to complete a form in relation to your investment experience, which will be sent by the Fund Manager to you. The information provided by you will be kept confidential by the Fund Manager but it is important to enable the Fund Manager to categorise you as an Elective Professional Client as defined by the FSA rules. An application to the Fund will only be accepted from you if you can be treated as such a client by reason of your experience and understanding of the nature of the risks involved in investing in such a Fund or if you have been advised by an authorised intermediary and therefore the intermediary took the responsibility for assessing the suitability of the investment for you.
Notice to Elective Professional Clients
• Once you are treated as an Elective Professional Client, you lose the protections applicable exclusively to Retail Clients under the FSA Rules;
• certain rules of the FSA will automatically be limited or modified in their application to you; and
• certain rules of the FSA will be capable of modification in their application to such investors in relation to any business carried out by the Fund Manager under the terms of the Calculus Capital EIS Fund 10 Information Memorandum.
Protections which will not apply to you:
• Risk warnings
We will not be obliged to warn you of the nature of any risks involved in any potential investments in the Fund.
• Disclosure of charges, remuneration and commission
The Fund Manager will not be obliged to disclose to you the basis or amount of its charges for any services the Fund Manager provides to you in the course of carrying out business with you or on your behalf or the nature or amount of any other income that the Fund Manager may receive from third parties in connection with such services.
• Financial promotions
The Fund Manager will not be obliged to set out any of the prescribed contents, disclosures or risk warnings needed for Retail Clients in prospectuses, marketing brochures and other non-real time financial or promotional material nor will we be subject to the restrictions that apply in relation to a Retail Client in relation to unsolicited real-time communications with you.
The Fund Manager will not be required to give you the warnings required for Retail Clients in relation to material which may lead you to deal with or use overseas firms which are not regulated under the Financial Services and Markets Act 2000 nor will the Fund Manager have to satisfy itself that the overseas firm will deal with you in an honest and reliable way. The Fund Manager will also not be required to comply with the FSA Rules relating to restrictions on and the content of direct offer advertisements.
Rules which will be limited or modified in their application to you:
The majority of rules of the FSA in relation to the form and content of financial promotions will not be applicable in respect of any financial promotion communicated or approved by the Fund Manager.
The Fund Manager will not be required by the FSA to provide you with a periodic statement on the value and composition of your account or Portfolio with the Fund Manager where you have requested the Fund Manager not to do so or where the Fund Manager has taken reasonable steps to establish that you do not want them.
Rules which will be capable of modification in their application to the investor:
Best execution
The Fund Manager may be permitted under FSA rules to agree in writing with you that the Fund Manager need not owe you a duty of best execution in respect of business transacted on a recognised market and by signing and returning the Application Form which forms part of the Agreement you hereby agree that such duty is expressly excluded. As such, the Fund Manager is not obliged to take reasonable care to ascertain the price which is the best available for you in the relevant market at the time for transactions of the kind and size concerned or to execute your instructions at such a price (or a better price).
Custody and Client Money
If the Fund Manager provides you with custody services, you should note that you will not be covered by certain protections applicable to Retail Clients and the investor will be permitted under the rules of the FSA to waive by written acknowledgement the protections conferred by the client money rules in respect of any money the Fund Manager holds for the investor. If the investor chooses to do so, the Fund Manager will not be required necessarily to segregate the investor’s money from Calculus Capital. Accordingly, in such circumstances in the event of insolvency, the investor would rank only as a general creditor of Calculus Capital in respect of any uninvested money.
Notwithstanding the foregoing, it is the policy of the Fund Manager to segregate investors’ money by holding it in a segregated client account and, where appropriate, in a money market account which are maintained separately from the Fund Manager’s own money.
Complaints
You will lose the right to access the Financial Ombudsman Service, except in so far as you may wish to challenge advice received from an intermediary.
Communications
The Fund Manager may have regard to your expertise when complying with the requirements under the regulatory system that communications must be clear, fair and not misleading.
Annual review
Under FSA rules, the Fund Manager has to review its categorisation of customers at least once a year. As part of this review procedure, the Fund Manager may write to you.
Back
