Advisor or Multiple Hedge Fund accounts with Advisors as client accounts (three-level Advisor accounts) are subject to the following rules.
| Function | Advisor/ Multiple Hedge Fund Account | Proprietary Trading Group STL Account |
|---|---|---|
| Trading |
The top-level account cannot allocate trades to the second-level Advisor's client accounts. However, the second-level Advisor CAN allocate trades to his or her client accounts. The top-level account or second-level Advisor can impose restrictions on clients. Trading criteria are applied separately to the second-level Advisor and to the client accounts. The products that the top-level account is approved to trade determine the products that the second-level Advisor can trade. |
The account can trade for the STL Master account and for any of the STL sub accounts. The top-level account or the STL Master account can apply trading restrictions to the STL sub accounts. Trading criteria are applied in the same manner as they are applied for single organization accounts. |
| Margin | The second-level Advisor and his or her clients are margined in the same manner as a non-three-level Advisor account. As with existing Advisor accounts, the top-leveaccount and the second-level Advisor are margined separately. | The Advisor Master account and client accounts are margined separately. The STL and its sub accounts are margined in the same manner as a standalone STL account. |
| Markups and Fees |
The top-level account can enter a fee schedule for the second-level Advisor just as they can for their other client accounts. The second-level Advisor can enter fee and markup schedules for his or her clients. Clients must agree/sign off on Advisor fees as they currently do. The client will be charged both fee schedules and the fees should be labeled by type, not as Advisor 1 and/or Advisor 2 fee. That is, if there is a % of assets fee and a % of PNL fee, each fee is displayed separately on statements. Fees will be collected in the Master, and then swept back to the second-level Advisor account, where they originated according to the fee schedule. |
The Advisor or Hedge Fund Investment Manager will enter a fee schedule for the STL Master account just as they can for organization client accounts. Advisor fees will be placed in the Advisor Master account and swept to the Advisor's trading account at the end of each day. |
| Funding |
Top-level account cannot perform funding functions on behalf of a second-level Advisor or the second-level Advisor's clients. All existing top-level account funding functions are available to the second-level Advisor, include Additional Advisor Authorizations. |
Advisors can fund the STL Master account just as they can fund an organization client account. Deposits and withdrawals must be made from the STL Master account and transferred to/from the sub accounts. |
| Reporting |
A second-level Advisor has access to all of the reports that are available to any Advisor Master. The top-level account will be able to see Advisor accounts on an individual client and/or consolidated basis. Consolidated reporting is assumed to be for a particular second-level Advisor account structure only, meaning the top-level account can view a consolidated report for each second-level Advisor group. All tax reporting for the first- and second-level Advisors and their clients will be performed by us. |
The STL account under an Advisor or Hedge Fund Investment Manager has access to the same reports available as a standalone STL account. The top-level account can see STL accounts on an individual and/or consolidated basis. All tax reporting for the STL account will be performed by us. |
| White Branding | White branding is supported for a second-level Advisor as long as the Advisor is registered. | White branding is supported for an STL account under an Advisor account, as long as the Advisor is registered. |
| Manage Clients > Dashboard | Second-level Advisors have the access to the same Dashboard functions as the top-level account. |
The STL Master account has the same access to client accounts in Account Management as a stand-alone STL account. The top-level account has the same access to the STL Master and sub accounts as for any other Advisor client accounts. |