What do you need to know about the AMC setup on bankable assets in Luxembourg?
Variant 1 "Compartment"
The compartment (SPV) opens the account/deposit in its name. This option takes very long with the broker/banks but is straight forward. In Guernsey it is the standard (GENTWO).
Variant 2.1 "Loan / Pledge" (simplest solution ≠ AMC)
The client opens the account/deposit and pledges the account to the compartment. In this case MTCM has no control obligations. Via a "Total Return Swap" the performance is given to the SPV and the NAV is calculated. Money transfers only take place for purchases, sales and liquidations.
A cautious customer could insert here an SPV as a replacement instead of his company (SPV setup EUR 5-10k & EUR 1k running). This way he would not have the loan (Total Return Swap) in his company balance sheet.
Variant 2.2 "Index Sponsor"
The client has an index sponsor (index of his strategy). The trading account replicates the index. The client advises the index and the index determines the allocation. Effectively and operationally, the customer is the strategy manager. MTCM has a control function here (Legal Framework Agreement + Index).
Good to know
In principle, an SRO or equivalent is required by law (for a portfolio on bankable assets). MTCM could, in individual cases, make an exception to policy (do not promote this!). MTCM would charge additional 20bps p.a. declare themselves as asset manager and the client would become their advisor. This is only possible via Luxembourg. Such special cases must be discussed internally before contacting MTCM.