Common use of Late Trading and Market Timing Clause in Contracts

Late Trading and Market Timing. If there is cause to suspect that an applicant is engaging or intends to engage in late trading or market timing, the AIFM and/or the Depositary may refuse to accept the subscription, conversion or redemption application until such time as the applicant has dispelled all doubt with regard to his or her application. Late trading is the acceptance of a subscription, conversion or redemption application that was actually received after the acceptance deadline (cut-off time) for unit transactions on the day in question and the execution of that application at the price based on the net asset value prevailing on that day. Late trading may enable investors to gain advantages or profit from the knowledge of events or information published after the acceptance deadline but not yet factored into the price at which the investor's order is settled. The investor in question therefore has an unfair advantage over those investors who have complied with the official acceptance deadline. This advantage is magnified if the investor is able to combine late trading with market timing. The term "market timing" is given to arbitrage trading whereby an investor systematically subscribes to and then quickly sells back or converts units of the same AIF or unit class in order to exploit the time lag and/or errors or shortcomings of the system in calculating the net asset value of the AIF or unit class concerned.

Late Trading and Market Timing. If there is cause to suspect that an applicant is engaging or intends to engage in late trading or market timing, the AIFM and/or the Depositary may refuse to accept the subscription, conversion or redemption application until such time as the applicant has dispelled all doubt with regard to his or her application. Late trading Late trading is the acceptance of a subscription, conversion or redemption application that was actually received after the acceptance deadline (cut-off time) for unit transactions on the day in question and the execution of that application at the price based on the net asset value prevailing on that day. Late trading may enable investors to gain advantages or profit from the knowledge of events or information published after the acceptance deadline but not yet factored into the price at which the investor's order is settled. The investor in question therefore has an unfair advantage over those investors who have complied with the official acceptance deadline. This advantage is magnified if the investor is able to combine late trading with market timing. Market timing The term "market timing" is given to arbitrage trading whereby an investor systematically subscribes to and then quickly sells back or converts units of the same AIF or unit class in order to exploit the time lag and/or errors or shortcomings of the system in calculating the net asset value of the AIF or unit class concerned.