Licensing Programs

The Global Hub & Spoke System requires know-how and software in addition to the know-how and software generally used to operate conventional collective investment products in a conventional manner in a single market segment of a single jurisdiction. GFX licenses this incremental know-how and software to asset management firms and their service providers in the United States, Europe and elsewhere throughout the world. 

The additional know-how gives most of the administrative areas of the design and operation of a collective investment product greater flexibility. These areas include legal, regulatory, fiscal, financial, accounting, operations, and compliance. The additional know-how will vary depending on the jurisdiction and market segment (e.g., conventional fund, exchange traded fund, banking, insurance, pension, separate account) which is involved. 

The additional software performs those additional accounting and information system functions required to operate in the Global Hub & Spoke System. These functions involve the 

❖ identification of the book and tax economic activity at the HubSM portfolio level which is attributable to each SpokeSM fund, 

❖ the specific tax lots of securities and other assets to which each Spoke fund would be entitled upon its complete withdrawal from the Hub portfolio, and 

❖ normalization of shares of the various Spoke funds investing through the same single Hub portfolio. 

A licensing program to implement and operate a Global Hub & Spoke System has three phases, in each of which GFX and its professional advisors work with the senior staff of the asset management firm and its service providers:

1. Evaluation Phase, to identify the specifics of the additional work which would be required and to prepare a time and responsibility chart for the project and a financial projection of organizational and operating expenses; 

2. Implementation Phase, to obtain all necessary regulatory and fiscal permissions to operate in each jurisdiction and each market segment, and to ensure that each service provider is fully capable of operating in the Global Hub & Spoke System; and 

3. Ongoing/Operational Phase, to monitor regulatory, operational and other developments in each jurisdiction to identify and resolve to the extent practicable any inconsistency with the Global Hub & Spoke System. 

The annual base license fee in the third phase is charged at the Hub portfolio level. There is no ongoing fee to the asset management firm or any service provider. Appropriate fees for the services of GFX and its professional advisors in the first two phases are charged to the asset management firm.