Due Diligence for Individual Strategy Providers
Contract person name
Telephone number
*
Email
Website
General
Provide a brief background of key personnel
Assets Under Management
Inception Date of the trading program
/
Month
/
Day
Year
Date
Maximum capital capacity for your trading program with current strategy, broker
Strategy
Describe the trading strategy
Types of instruments traded
Types of Asset class
Equities
Options
Futures
Forex
Fixed Income
ETFs
Commodities
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Trade Parameters
Does each trade have a hard stop?
Yes
No
If so, what is the stop loss or avg stop?
Do you use basket trading?
Yes
No
Do you add to losers?
Yes
No
Previous explain
What is your risk or average risk per trade?
What is your max leverage per trade?
What is your max overall leverage?
What is the programs risk reward ratio?
Do you employ an overall equity stop?
Yes
No
Do you employ a max daily or monthly risk?
Yes
No
if so to previous, what is it?
What is the programs Max drawdown?
What is the programs max open equity drawdown?
How many trades are open at one time?
How long did it take to recover your recent 3 drawdowns?
How do you monitor pre-trade investment restrictions? Is this supported by IT systems?
Are any third parties involved in verifying adherence to risk limits? Please describe.
Trading Aspect
Is your strategy?
Automated
Semi- Automated
manual
FIX Api MT4 or MT5?
What pairs do you trade?
What time zones do you normally trade through?
Does the strategy rely on tight spreads? Or can it be traded on normal spreads?
How many trades does the program average per day?
What's the Average holding time?
Do you have a Circuit breaker/Throttle monitor ?
Yes
No
What's the Average trade size ?
(per $100,000 traded)
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Verification
Are your results Audited or 3rd party verified?
Yes
No
3rd party verification link
Please upload any Trading Statements
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Strategy Provider Risk controls
Max Drawdown Per Trade
Max Leverage Per Trade
Max Leverage Per Symbol
Max Leverage Total
Client Mandate
(Agreed hard stop with the client. There is always a buffer between the Hard stop to the trader and the Client Hard stop)
Position Size
Instruments traded
Please provide details
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Outsourcing
Does your company outsource any tasks and/or processes?
Yes
No
In case of outsourcing, please state which tasks and/or processes are outsourced to which company. Please precisely state the registered trade name (name) and registered office (address) of such company and – as far as required – whether the company is admitted to engage in asset management business.
Please provide copy of admission notice, if applicable.
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Have you outsourced parts of your internal control systems (e.g. risk management, internal audit, and compliance)?
Yes
No
Please describe your oversight process of the outsourced tasks and/or processes.
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Regulatory/Legal/Compliance
Has there ever been any criminal, civil or administrative proceedings in which the Company and/or any of the funds, managers, advisors or any other company within the group is involved, or outsourced parties or any similar such matters including reparations, arbitrations and negotiated settlements? If so, please provide details.
Have there ever been, or are there currently pending, any regulatory sanctions, against the Company, managers employed by the Company or any of the sub-managers used in the past or currently in use? If so, please provide a detailed explanation.
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Administration/Operations
How are trades authorised, recorded and executed?
What is the Company’s policy with respect to trading and system errors? Please explain in detail.
What is the company's policy with respect to pre- and post- trading incidents? Please describe the key features.
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Systems
Applications
Which IT-systems are used?
Risk Management
Investment Guideline Monitoring
Operations
Reporting
Other
Infrastructure
Who supports these systems?
Are there any system changes/migrations planned in the next 2 years?
Yes
No
Please explain
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