Embarking on a marketing effort with the major European financial centers as the initial focus is, however, extremely arduous for new, particularly non-European, groups.

Given appropriate lists of contacts, one-on-one meetings can be arranged relatively straightforwardly, but their effectiveness is dependent on a series ofcriteria beyond the chemistry of the meeting itself.

Press relations, actively undertaken, will serve both to boost familiarity of a fund management group and, moreover, can prove a valuable information source to the group as well as from it.

Over the past few years, the European press has increasingly reacted positively—with certain exceptions—to the derivatives industry as a whole and to managed derivatives in particular. Read more »

Posted: March 17th, 2008 under Uncategorized.
Comments: 1

Embarking on a marketing effort with the major European financial centers as the initial focus is, however, extremely arduous for new, particularly non-European, groups.

Given appropriate lists of contacts, one-on-one meetings can be arranged relatively straightforwardly, but their effectiveness is dependent on a series ofcriteria beyond the chemistry of the meeting itself.

Press relations, actively undertaken, will serve both to boost familiarity of a fund management group and, moreover, can prove a valuable information source to the group as well as from it. Read more »

Posted: February 17th, 2008 under Future Management, Future Trading, Futures Quotes, Managed Futures.
Comments: 2

European Institutions

The preparedness of European institutions to purchase either managed derivatives funds or programmes varies across the continent and is dependent upon a series of factors some of which may be addressed by marketing.

1. The regulatory (and tax) environment;
2. general familiarity with the derivatives and managed derivatives industry;
3. familiarity with the fund management group attempting to sell product;
4. presence and format of a track record (at least for past funds if a new product is offered);
5. money under management within the fund group;
6. technical expertise within the fund group;
7. performance aspirations for the fund or investment programme;
8. quality and content of the explanatory/sales materials;
9. financial considerations such as fees implicit within the fund or programme.

Read more »

Posted: February 16th, 2008 under Foreign Exchange Futures, Future Fund, Futures Trading System, Oil Futures.
Comments: 2

Agents

One marketing consideration that generally affects fund groups attempting international retail sales is a need for agents in various countries.

Making contact with such agents has, in the past, normally been achieved by advertising (often classified) in such publications as The Economist or the International Herald Tribune supported by editorial coverage of a fund group’s ambitions in agents‘ trade magazines (of which there are a growing number).

There are three principal messages that need to be put across. The first, most obviously, is the size of the upfront sales commission and of the so-called ‘trail’ or ‘trailing commission’ (the ongoing income to an agent whose clients stay with the fund). Quite reasonably, fund companies have become uncomfortable with an exclusive focus on upfront commissions since certain groups found themselves being burnt by commission earning money coming into a fund and then, mysteriously, moving on somewhere else.

The second message is support. Agents increasingly respond well to formal training sessions — both about the managed derivatives market in general as well as about the specific product on offer. Supplementing such events, many fund groups also put together specific agents packages which include simplified written explanations of aspects of the derivatives industry and on the historical/academic arguments often used to promote derivatives funds—Portfolio Diversification^,Futures as a Separate Asset Class, Modern Portfolio Theory and so on. Read more »

Posted: February 12th, 2008 under Managed Futures.
Comments: none

Conventionally, funds are promoted in Europe through a prospectus, some form of explanatory memorandum or summary and, often, a sheaf of figures to substantiate the various financial claims. (Reprinted press cuttings may also be included in the pack.)

Prospectus

US and European prospectuses tend to differ not only in content (forced on the writers by different regulatory jurisdictions) but also in lay-out and style. Whereas in the USA, prospectuses are normally economically printed in one colour only, European prospectuses which are often significantly shorter may also double as sales support documents and may thus be produced more artistically to include performance graphs and other coloured charts. European prospectuses also often have separate (card) front covers. Read more »

Posted: February 11th, 2008 under Future Fund.
Comments: 3

European Institutions

The preparedness of European institutions to purchase either managed derivatives funds or programmes varies across the continent and is dependent upon a series of factors some of which may be addressed by marketing.

1. The regulatory (and tax) environment;
2. general familiarity with the derivatives and managed derivatives industry;
3. familiarity with the fund management group attempting to sell product;
4. presence and format of a track record (at least for past funds if a new product is offered);
5. money under management within the fund group;
6. technical expertise within the fund group;
7. performance aspirations for the fund or investment programme;
8. quality and content of the explanatory/sales materials;
9. financial considerations such as fees implicit within the fund or programme.

Read more »

Posted: February 11th, 2008 under Managed Futures.
Comments: none

This article covers the regulatory environment for managed futures funds in a selection of European offshore centers:

• Gibraltar;
• Isle of Man;
• Guernsey;
• Jersey.

GIBRALTAR

There are no specific regulations for futures funds in Gibraltar, but the Financial Services (Collective Investment Schemes) Regulations, 1991 apply to futures funds established in Gibraltar in addition to the Part III of the Financial Services Ordinance.

The regulator of the financial industry in Gibraltar is the Financial Services Commission (FSC) which may impose specific further requirements on particular funds under its discretionary powers. Read more »

Posted: February 10th, 2008 under Future Fund, Future Investing.
Comments: 2

Use of Derivatives by Investment Companies

As long as ICs comply with SEC regulations concerning asset coverage, there are no significant restrictions on their use of derivatives. However, an IC which uses derivatives more than just as a hedging strategy potentially faces the need to register with the CFTC as a CPO and may be required to comply with two different regulatory regimes.

Where an IC is registered with the SEC, its operator is not required to register with the CFTC as a CPO, if the IC enters into transactions in CFTC regulated derivatives for bona fide hedging purposes.

This exemption is dependent on the IC complying with the following conditions:

1. it commits no more than 5 per cent of its total net assets to initial margin and option premiums;

Read more »

Posted: February 9th, 2008 under Commodities Futures, Future Broker.
Comments: 4

Regulatory Prohibitions/Exchange Controls

It should not be forgotten that some countries continue to impose foreign exchange and other controls that effectively prevent residents from investing in any kind of offshore fund. In Western Europe, Greece is the only country to retain some form of exchange control. However, for comparison purposes only, in the Middle East, such restrictions apply in Israel and Saudi Arabia; South Africa has particularly strict controls; and certain Central and South American countries have similar restrictions. For instance, Mexican laws prohibit investment in any non-Mexican funds and provide that only Mexican institutions and brokers may deal in securities.

Nevertheless, in practice, investors resident in such countries may be permitted to invest in overseas funds—for example, if they have access to legitimate funds outside of the local jurisdiction and the transaction takes place offshore. Read more »

Posted: February 6th, 2008 under Future Fund.
Comments: 2

You might ask, “What happens if someone decides not to pay for the commodity as promised or if a particular farmer is unable to deliver the wheat?” This is a good question. If it were possible for people to back out of the trade without fulfilling their parts of the promises, the futures system would not work. People would lose confidence in the system, and it would not be attractive to either hedgers or speculators. Eliminating this uncertainty is the role of the clearing corporation.

Each exchange has a clearing corporation performing a critical duty: ensuring the integrity of the futures contract. Read more »

Posted: February 1st, 2008 under Futures Contracts.
Comments: 4