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Collateral Reserve

All Vortex Currency Group Managed Account Clients will have the amount of their initial account value and any subsequent account contributions secured through an Assignment of Death Benefit contract in the Collateral Reserve Trust managed by Swiss Alliance Trust AG (1976) Geneva Switzerland. An amount equal to 30% of a Client’s account contributions will be transferred to the Collateral Reserve Trust for a period of up to 5 years as detailed in the Client’s Collateral Reserve Designation Form. This amount is referred to as the Collateral Reserve.

The Collateral Reserve Trust will purchase a predetermined amount of Secured "Seasoned Investment Grade Life Insurance" Policies. The Secured "Seasoned Investment Grade Life Insurance" Policies have been issued through United States “A” Rated insurance carriers. The "Return of Investment" by these policies is based upon insurance actuarial tables. The Collateral Reserve Trust will purchase an amount equal to the total of funds invested by a Client in the Managed Account. The Collateral Reserve Trust will be the sole owner and beneficiary of these policies. The Managed Account Client will have an Assignment of Death Benefit contract in the Trust equal to the total of all Managed Account contributions for a period of five years from the date of each contribution or such time as the Collateral Reserve is returned. However, if a Client’s Managed Account balance has increased in value to an amount equal to two hundred percent (200%) of any specific account contribution, the Collateral Reserve portion of the account contribution will be added back to their currency trading account and all beneficial interest in the underlying securitization of the Collateral Reserve Trust for that specific contribution will terminate. This 200% “trigger” is calculated separately for each new contribution made by the Client.

A Client’s Collateral Reserve in the Collateral Reserve Trust will have a five (5) year surrender period from the date of contribution. The surrender value will only apply to a complete withdrawal from the Managed Account. The surrender value of the Collateral Reserve will vest at a rate of twenty percent (20%) per year for five years. On the five (5) year anniversary of each Managed Account contribution the Collateral Reserve in addition to any trading losses (if any) will be released and added back to their Trading Account and all beneficial interest in the Collateral Reserve Trust will terminate. At the completion of the five (5) year term of the Collateral Reserve, a Client may, at the sole discretion of the Adviser, establish a new Collateral Reserve equal to thirty percent (30%) of the amount of their current Managed Account balance they wish to secure. A new five (5) year surrender period would apply to this Collateral Reserve amount from the date of execution.