FREQUENTLY ASKED QUESTIONS
WHAT OUR CLIENTS ASK TO US
There is no central marketplace for currency exchange; trade is conducted over the counter (OTC). The forex market is open 24 hours a day, five days a week and currencies are traded worldwide among the major financial centres of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney.
The foreign exchange market (also called Forex, FX, Interbank or currency market) is a global decentralised market for the trading of currencies. It determines the relative values of different currencies and it is by far the largest market in the world in terms of the total cash value traded. According to the 2016 Triennial Survey, turnover in global FX markets averaged $5.1 trillion per day in 2016 (Bank for International Settlements 2016).
The foreign exchange market works through financial institutions and it operates on several levels. The main participants in this market are the larger international banks. Financial centres around the world triggers trading between a wide range of multiple types of buyers and sellers around the clock. Any person, firm or country may participate in this market.
The foreign exchange market is unique because of the following characteristics:
- its huge trading volume representing the largest asset class in the world leading to high liquidity;
- its geographical dispersion;
- its continuous operation: 24 hours a day except weekends, i.e., trading from 22:00 GMT on Sunday (Sydney) until 22:00 GMT Friday (New York);
- the variety of factors that affect exchange rates;
- the low margins of relative profit compared with other markets of fixed income; and
- the use of leverage to enhance profit and loss margins and with respect to account size.
As such, it has been referred to as the market closest to the ideal of perfect competition, notwithstanding currency intervention by central banks.
The interbank market is the digital exchange of foreign currencies made by the largest banks of the world among them and with other financial participants. Transactions done in the interbank market takes place via telephone, direct line or electronic dealing networks. Most of Forex Trading takes place in the interbank market.
Net earnings are defined as the total increase in net equity (including both: realised and floating trades). It is the difference between the initial equity and the equity as at the end of the month in course, understood as only including earnings and/or operating losses. In other words, it does not take into account cash transactions (increases and/or withdrawals of funds).
The net earnings comprise the final earnings existing on the account of the investor client, free of any previously applicable charges, open for management or other.
For all purposes, the earnings / losses on the Net Equity and their resultant Performance Fees are calculated as follows:
(a) Total earnings / losses generated from closed trades as from the first day of assets management, plus / minus:
(b) Earnings / losses still not carried out as at the close of trading on the last working day of the month, minus:
(c) Any transaction charge applicable to the account (if existing), minus:
(d) Any previously paid success fees.
* The net earnings are always calculated as from the start date of the trading contract up until the last working day of the calculation period.
** The net earnings are free (net) of operating Brokerage costs or any other applicable commissions, taking into account the total earnings/losses during the entire management period.
***All existing net losses, as applicable, are carried forward to future sessions until they are offset by new net capital earnings.
Pairstech Capital Management reserves the right, at their exclusive discretion, to share its revenues with third parties such as referring Agents or other account intermediaries if applicable.
Firms that provide currency traders with access to a trading platform that allows them to buy and sell foreign currencies. A currency trading broker, also known as a retail forex broker, or forex broker, process a portion of the volume of the overall foreign exchange market. Currency traders use these brokers as Principals or agents to access the 24-hour currency market.
Banks with No Dealing Desks provides immediate and automated access to the interbank market. This is different than trading through the dealing desks that are found in many financial institutions, causing in certain instances a delay and or distortion in the execution of an order. The No Dealing Desk based execution avoids the risk of conflicts of interest from arising between traders and Brokers.
The high-water mark ensures that the manager does not get paid any sums for poor performance. So if the manager loses money over a certain period, they must get the account funds to a level higher than the last High-Water Mark before receiving a Performance Fee.
If the trading activity produces a gain higher than the prior High-Water Mark equity level, there is an agreed Performance Fee to be paid to Pairstech. This amount is calculated on a monthly basis based on the net earnings produced on the account’s equity through total realised and unrealised trades. Net earnings are net of any operational costs. Once determined net earnings are multiplied by the agreed Performance Fee percentage. The broker then deducts this Fee from client account and pays it to your designated Trading Agent.
Multi Account Manager (MAM) is an essential integrated software tool to quickly execute block orders with one click under a master account arrangement and conveniently automate trade allocations to customer accounts.
The FCA regulates financial firms providing services to consumers and maintains the integrity of the UK’s financial markets. It focuses on the regulation of conduct by both retail and wholesale financial services firms.
You can search the Register to find out whether a firm you are using, or plan to do business with, is authorised or registered by the FCA, or is exempt. You can also see if a consumer credit firm has interim permission. To check Equiti – Divisa UK Ltd.’s registration number please go to https://register.fca.org.uk/ and enter number 528328. To check Pairstech Capital Management’s registration number please go to https://register.fca.org.uk/ and enter number 477155.
The European Union applicable Markets in Financial Instruments Directive (MiFID) adopts two main categories of client: retail and professional. MiFID attaches different regulatory protections to each of these categories, with the result that those falling within the retail category – the less experienced, knowledgeable and sophisticated investors – will be afforded a higher level of protection than that afforded to investors in the professional or eligible counterparty category.
On the other hand, prospective clients may apply to request treatment as an ‘elective’ professional client and fall under the category of a Professional Client. Such waiver of the protection afforded by the Financial Conduct Authority shall be considered valid only if an adequate assessment of the expertise, experience and knowledge of the client, undertaken by Pairstech, gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the undersigned is capable of making his own investment decisions and understanding the risks involved. This needs to be suitably documented and appropriately evidenced.
Professional Clients or Eligible Counterparties are accepted as European customers might be accepted once all compliance requirements has been approved by Pairstech.
Professional Clients are those considered to be more experienced, knowledgeable and sophisticated than retail clients as well as able to assess their own risk and make their own investment decisions, so they are afforded less regulatory protection. Where we treat you as a professional client some of the retail-oriented rules will cease to apply. In example: you will be given fewer information disclosures with regard to the firm and the risks involved in derivatives trading since we all can assume that you have the necessary level of knowledge and experience to understand the risks involved in it.
Within MiFID definitions there is a separate and distinct third category for a limited range of businesses: eligible counterparty. Eligible Counterparties are investment firms, credit institutions, insurance companies, UCITS and their management companies, other regulated financial institutions and in certain cases, other undertakings. They are considered to be the most sophisticated investors or capital market participants. Where we treat you as an eligible counterparty, you will be entitled fewer protections rules than you would be entitled to as a professional client.
Yes, Pairstech Capital Management is licenced and authorised to provide Investment Management services also to retail Customers. This can be verified at https://register.fca.org.uk/ and entering the number 477155 an looking at Permission tab/ Advising on investments.
- Eligible Counterparty
- Retail (Investment)
Further to MiFID implementation there are significant barriers for non-EU and EU -firms in providing services to retail clients within EU due to, among others, the lack level of investment experience and risk awareness that characterises this kind of client profile. We however are authorised to accept all client classifications according to our regulatory status and licence permissions.
Due to the United States Commodity Futures Trading Commission regulatory restrictions, foreign firms not locally regulated in the US are unable to open accounts for retail customers from the U.S. Upon implementation of the Dodd Frank Act since July 15th 2011 all OTC derivatives market participants, including retail forex brokers and market participants became subject to CFTC and SEC registration and regulation.
Accredited Investors from the United States might be accepted once all compliance requirements has been approved by Equiti – Divisa UK Ltd.
A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Accredited investors might include individuals, banks, insurance companies, employee benefit plans, and trusts. Accredited investors may be accepted as US customers for Chelton Capital.
Risk Disclosure: Trading the financial markets on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to open a trading account, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading financial instruments, and seek advice from an independent financial advisor if you have any doubts. Read more
Copyright © 2018 Chelton Capital. All rights reserved.
Chelton Capital Limited (FCA FRN 820628) is an appointed representative-introducer of Pairstech Capital Management LLP (FCA FRN 477155) which is authorised and regulated by the Financial Conduct Authority (FCA). Chelton Capital Limited is registered in England and Wales under No: 11493173.