What are RISCMTP-Notes?

RISCMTP-Notes are a unique debt security combining the liquidity of cash with the quality and managed returns of government money market funds. What’s more, RISCMTP-Notes are versatile collateral instruments that are designed to be more liquid, capital-efficient and secure than short-term credit securities (e.g., CP and CDs), prime money market funds or ETFs. In short, your money works harder with RISCMTP-Notes.

What are RISCMTP-Notes?

RISCMTP-Notes are a unique debt security combining the liquidity of cash with the quality and managed returns of government money market funds. What’s more, RISCMTP-Notes are versatile collateral instruments that are designed to be more liquid, capital-efficient and secure than short-term credit securities (e.g., CP and CDs), prime money market funds or ETFs. In short, your money works harder with RISCMTP-Notes.

What are RISCMTP-Notes?

RISCMTP-Notes are a unique debt security combining the liquidity of cash with the quality and managed returns of government money market funds. What’s more, RISCMTP-Notes are versatile collateral instruments that are designed to be more liquid, capital-efficient and secure than short-term credit securities (e.g., CP and CDs), prime money market funds or ETFs. In short, your money works harder with RISCMTP-Notes.

RISCMTP-Notes are securities representing a proportional interest in a pooled investment fund predominantly consisting of U.S. Treasuries and <31-day credit assets that provide an attractive alternative to investing in government money market funds and bank deposits.

RISCMTP-Notes are investment securities issued with a 10-year maturity that are:

      • exchange-listed and transferable with market I.D. numbers (i.e., CUSIP: G75730AA2, ISIN: USG75730AA25)
      • predominantly backed by a portfolio of U.S. Treasuries
      • issued for a 10-year term
      • expected to be rated [Aaa by Moody’s]
      • tri-party and repo eligible
      • redeemable at the Noteholder’s option at any time for same-day settlement1, on an In-Kind or Liquidated Asset Value (LAV) basis
      • redeemable at par plus Unamortised Utility Premium (UUP), i.e., Book Value, on the Annual Optional Redemption Date of each RISCMTP-Note (again, for same-day settlement)
      • priced daily and viewable on Bloomberg
    1. Subject to cut-off times.

RISCMTP-Notes are securities representing a proportional interest in a pooled investment fund predominantly consisting of U.S. Treasuries and <31-day credit assets that provide an attractive alternative to investing in government money market funds and bank deposits.

RISCMTP-Notes are investment securities issued with a 10-year maturity that are:

      • exchange-listed and transferable with market I.D. numbers (i.e., CUSIP: G75730AA2, ISIN: USG75730AA25)
      • predominantly backed by a portfolio of U.S. Treasuries
      • issued for a 10-year term
      • expected to be rated [Aaa by Moody’s]
      • tri-party and repo eligible
      • redeemable at the Noteholder’s option at any time for same-day settlement1, on an In-Kind or Liquidated Asset Value (LAV) basis
      • redeemable at par plus Unamortised Utility Premium (UUP), i.e., Book Value, on the Annual Optional Redemption Date of each RISCMTP-Note (again, for same-day settlement)
      • priced daily and viewable on Bloomberg
    1. Subject to cut-off times.

RISCMTP-Notes are securities representing a proportional interest in a pooled investment fund predominantly consisting of U.S. Treasuries and <31-day credit assets that provide an attractive alternative to investing in government money market funds and bank deposits.

RISCMTP-Notes are investment securities issued with a 10-year maturity that are:

      • exchange-listed and transferable with market I.D. numbers (i.e., CUSIP: G75730AA2, ISIN: USG75730AA25)
      • predominantly backed by a portfolio of U.S. Treasuries
      • issued for a 10-year term
      • expected to be rated [Aaa by Moody’s]
      • tri-party and repo eligible
      • redeemable at the Noteholder’s option at any time for same-day settlement1, on an In-Kind or Liquidated Asset Value (LAV) basis
      • redeemable at par plus Unamortised Utility Premium (UUP), i.e., Book Value, on the Annual Optional Redemption Date of each RISCMTP-Note (again, for same-day settlement)
      • priced daily and viewable on Bloomberg
    1. Subject to cut-off times.

What are the advantages of RISCMTP-Notes?

Compared to money market funds
RISCMTP-Notes employ money market management techniques to replicate money market returns in a listed, rated fixed income security that enables the investor to exit at any time for current Liquidated Asset Value (LAV), without gating or penalties, and at Book Value at each Annual Optional Redemption Date.

Compared to Treasury Bills
RISCMTP-Notes are the closest thing to owning Treasury Bills without having to choose or manage them yourself.

Compared to cash
RISCMTP-Notes are like cash with an imbedded, managed return. Cash begs the questions: What will I earn? What can I buy? Am I capital-efficient? RISCMTP-Notes are the answer.

Compared to ETFs
RISCMTP-Notes are redeemable at any time for the investor’s share of portfolio LAV (or underlying securities) and are redeemable at Book Value on the Annual Optional Redemption Date. They are like zero risk-weighted ETFs without all the market risk.

No additives, derivatives or synthetics, just a simple, straightforward participation in the underlying note portfolio securities.

  • Expected to be rated [Aaa by Moody’s].
  • Redeemable at any time, for same-day settlement, on an In-Kind or LAV basis.
  • Expected to compete with O/N Fed Funds Effective Rate, 3- to 6- month U.S.Treasuries and government money market funds.
  • Freely transferable in accordance with applicable securities laws.
  • Versatile collateral instrument designed to be acceptable for:
  • derivatives collateral (initial margin under Dodd-Frank and EMIR rules)
  • repos and securities lending transactions
  • central bank and bilateral secured borrowing transactions
  • collateralised reinsurance transactions
  • regulatory surplus/solvency relief transactions (in the U.S., U.K., Canada and Europe)
  • Portable: more acceptable as collateral than a fund investment (e.g., a money market fund).
  • Attractive managed returns with a daily price on Bloomberg
  • The Notes’ superior utility should allow the Notes to trade at a premium to their Book Value, resulting in pay-as-you go utility.
  • Having the Utility Premium (UP) imbedded in the Notes enhances their collateral value (by the amount of the unamortised UP), reducing the need to overcollateralise security requirements and adding yet another utility feature.

These represent RFPS opinions. For actual application, you will need to consult with the receiving party for confirmation of acceptability.

What are the advantages of RISCMTP-Notes?

Compared to money market funds
RISCMTP-Notes employ money market management techniques to replicate money market returns in a listed, rated fixed income security that enables the investor to exit at any time for current Liquidated Asset Value (LAV), without gating or penalties, and at Book Value at each Annual Optional Redemption Date.

Compared to Treasury Bills
RISCMTP-Notes are the closest thing to owning Treasury Bills without having to choose or manage them yourself.

Compared to cash
RISCMTP-Notes are like cash with an imbedded, managed return. Cash begs the questions: What will I earn? What can I buy? Am I capital-efficient? RISCMTP-Notes are the answer.

Compared to ETFs
RISCMTP-Notes are redeemable at any time for the investor’s share of portfolio LAV (or underlying securities) and are redeemable at Book Value on the Annual Optional Redemption Date. They are like zero risk-weighted ETFs without all the market risk.

No additives, derivatives or synthetics, just a simple, straightforward participation in the underlying note portfolio securities.

  • Expected to be rated [Aaa by Moody’s].
  • Redeemable at any time, for same-day settlement, on an In-Kind or LAV basis.
  • Expected to compete with O/N Fed Funds Effective Rate, 3- to 6- month U.S.Treasuries and government money market funds.
  • Freely transferable in accordance with applicable securities laws.
  • Versatile collateral instrument designed to be acceptable for:
  • derivatives collateral (initial margin under Dodd-Frank and EMIR rules)
  • repos and securities lending transactions
  • central bank and bilateral secured borrowing transactions
  • collateralised reinsurance transactions
  • regulatory surplus/solvency relief transactions (in the U.S., U.K., Canada and Europe)
  • Portable: more acceptable as collateral than a fund investment (e.g., a money market fund).
  • Attractive managed returns with a daily price on Bloomberg
  • The Notes’ superior utility should allow the Notes to trade at a premium to their Book Value, resulting in pay-as-you go utility.
  • Having the Utility Premium (UP) imbedded in the Notes enhances their collateral value (by the amount of the unamortised UP), reducing the need to overcollateralise security requirements and adding yet another utility feature.

These represent RFPS opinions. For actual application, you will need to consult with the receiving party for confirmation of acceptability.

What are the advantages of RISCMTP-Notes?

Compared to money market funds
RISCMTP-Notes employ money market management techniques to replicate money market returns in a listed, rated fixed income security that enables the investor to exit at any time for current Liquidated Asset Value (LAV), without gating or penalties, and at Book Value at each Annual Optional Redemption Date.

Compared to Treasury Bills
RISCMTP-Notes are the closest thing to owning Treasury Bills without having to choose or manage them yourself.

Compared to cash
RISCMTP-Notes are like cash with an imbedded, managed return. Cash begs the questions: What will I earn? What can I buy? Am I capital-efficient? RISCMTP-Notes are the answer.

Compared to ETFs
RISCMTP-Notes are redeemable at any time for the investor’s share of portfolio LAV (or underlying securities) and are redeemable at Book Value on the Annual Optional Redemption Date. They are like zero risk-weighted ETFs without all the market risk.

No additives, derivatives or synthetics, just a simple, straightforward participation in the underlying note portfolio securities.

  • Expected to be rated [Aaa by Moody’s].
  • Redeemable at any time, for same-day settlement, on an In-Kind or LAV basis.
  • Expected to compete with O/N Fed Funds Effective Rate, 3- to 6- month U.S.Treasuries and government money market funds.
  • Freely transferable in accordance with applicable securities laws.
  • Versatile collateral instrument designed to be acceptable for:
  • derivatives collateral (initial margin under Dodd-Frank and EMIR rules)
  • repos and securities lending transactions
  • central bank and bilateral secured borrowing transactions
  • collateralised reinsurance transactions
  • regulatory surplus/solvency relief transactions (in the U.S., U.K., Canada and Europe)
  • Portable: more acceptable as collateral than a fund investment (e.g., a money market fund).
  • Attractive managed returns with a daily price on Bloomberg
  • The Notes’ superior utility should allow the Notes to trade at a premium to their Book Value, resulting in pay-as-you go utility.
  • Having the Utility Premium (UP) imbedded in the Notes enhances their collateral value (by the amount of the unamortised UP), reducing the need to overcollateralise security requirements and adding yet another utility feature.

These represent RFPS opinions. For actual application, you will need to consult with the receiving party for confirmation of acceptability.

RISCMTP-Notes are backed by portfolios that are managed by some of the world’s best professional managers of short-term investments.

  • All RISCMTP-Notes will have their issuance proceeds invested in a portfolio that is managed in a segregated account (the RISCMTP-Note Portfolio) by a professional investment manager (the Investment Manager) according to a specified set of investment criteria set out in the Investment Management Agreement (the IMA) for each RISCMTP-Note (the IMA Criteria).
  • The initial RISCMTP-Note Portfolio will be managed by DWS (formerly known as Deutsche Investment Management Americas, Inc.).
  • The RISCMTP-Note Portfolio will be managed without leverage to provide:
  • capital preservation
  • liquidity
  • low market volatility
  • attractive performance characteristics (e.g., relative to Performance Benchmarks)
  • This is achieved by maintaining a weighted average maturity on the RISCMTP-Note Portfolio of 9 months or less and each security in the portfolio must mature and settle by the Annual Optional Redemption Date or by the maturity date, whichever is later.
  • The Investment Manager will deploy the RISCMTP-Note issuance proceeds to acquire the collateral that backs each RISCMTP-Note (i.e., the RISCMTP-Note Portfolio) according to the investment guidelines summarised below and further specified in the IMA.
  • Permitted Investments: Obligations of the U.S. Department of Treasury and Servicing Assets as previously referenced (see IMA).
  • Maturities & Duration: The effective duration of the RISCMTP-Note Portfolio may not exceed 9 months. All Treasuries must mature on or before the next RISCMTP-Note Annual Optional Redemption Date. Servicing Assets have a maximum maturity of 60 days when acquired, provided that those with maturities exceeding 30 days may not exceed 10% of the RISCMTP-Note Portfolio. In any case, all RISCMTP-Note Portfolio assets must mature and settle no later than the next Annual Optional Redemption Date.
  • Performance Benchmarks: O/N Fed Funds Effective Rate, 3 to 6-month U.S. Treasuries and government money market funds.
Redemption by RISCMTP-Note Holder:

  • RISCMTP-Notes may be redeemed by the holder at any time, on an In-Kind or LAV basis.
  • Redemption settlement whether in cash or portfolio securities will be same-day, subject to the redemption notice being received by 8 a.m. New York time on any business day.
  • Finally, all RISCMTP-Notes may be redeemed by the issuer or the holder for their Book Value on the Annual Optional Redemption Date or may be increased through additional investment.

Redemption by RISCMTP-Note Issuer:

  • In addition to having the right to redeem the notes on the Annual Optional Redemption Date, the RISCMTP-Note issuer will have the right to execute one or more early redemptions at Book Value (in whole or in part, the Issuer Call Option Redemptions) if:

    • the Investment Manager is unable to reinvest sufficiently in U.S. Treasuries to maintain IMA concentration limits, or
    • the Issuer has been unable to replace the Investment Manager or the Calculation Agent after its bankruptcy or termination, or
    • the Investment Manager is unable to invest in Permitted Investments with a positive yield.
  • All Issuer Call Option Redemptions will be subject to Notice being given by the Manager on behalf of the Issuer and will be settled in cash on the date that payments are received on RISCMTP-Note Portfolio securities as they mature. Settlement amounts received from the maturing RISCMTP-Note Portfolio securities will be paid to all RISCMTP-Note holders on a proportional basis.
Market AlternativesRISCMTP-Notes
FeaturesGov't Money
Market Funds
Ultra-Short
Treasury
Bond ETFs
Repos
Collateral UtilityA few casesNoNoYes
Liquidity Options
In-Kind / LAV redemptionn/aAt any timen/aAt any time
Book value redemptionAt any timen/an/aAt AORD1 or Maturity
Sale at market pricen/aAt any timen/aAt any time
Repo of noten/aMayben/aAt any time
Settlement Date of Liquidity Option:
RedemptionSame dayNot same dayn/aSame day
Salen/aSame dayn/aSame day
Out-performance vs. O/N Fed Funds Effective RateNoNoMaybeExpected
Maturity Daten/an/aAgreed by parties10-year

1Annual Optional Redemption Date

  • RISCMTP-Notes have a Principal Amount of 100% and are sold with a “Utility Premium” (UP) of 1.0% to reflect their value as managed, collateral-eligible investments. A portion of the UP will be amortised at issuance of the Notes, and the balance will be earned and amortised on each anniversary date until the 10th year. The Book Value of the Notes will include the Unamortised Utility Premium (UUP) on the annual Put/Call date, i.e., the Annual Optional Redemption Date.
  • The UP is a prepayment by the investor of 10 years’ worth of RFPS Ltd., agent and service provider fees to pay for the maintenance of the Issuer and the Notes and the unique utility features of the Notes.
  • The UUP will be combined with the Principal to make up the Book Value of the Notes, which will be the exercise price for the annual Noteholder and issuer redemption options.
  • The Investor may recover all or part of the unused portion of the amortised UP in each year by selling the Notes in the market (e.g., via a market maker). The Investor will otherwise be able to recoup the UUP:

    • at market value (i.e., LAV), by giving a Noteholder Early Redemption Notice;
    • at Book Value, by giving a Noteholder Annual Redemption Option Notice
  • Having the UP imbedded in the Notes increases their collateral value (by the amount of the UUP), reducing the need to overcollateralise security requirements and adding yet another utility feature.
Source of LiquidityGov't Money
Market Funds
Ultra-Short
Treasury
Bond ETFs
Commercial PaperReposRISCMTP-Notes
Selln/aYesYesn/aYes
Repon/an/an/an/aYes
RedeemYesYesn/an/aYes
  • According to the “look-through approach” or LTA under BIS CRE60, banks holding investments in RISCMTP–Notes in the banking book should “risk weight the underlying exposures of a fund as if the exposures were held directly by the bank.” As the US government securities carry a zero-risk weight, so should the government bond component of the investments in RISCMTP–Notes. 
  • RISCMTP-Notes are designed to satisfy the requirements set out in regulation 17 CFR 23.156(a)(1)(ix) enacted by the Commodities Futures Trading Commission for Eligible Collateral for derivatives.
  • The US Patent and Trademark Office (USPTO) has issued a notice of allowance recognizing RISCMTP-Notes as a trademark belonging to the RISConsulting Group LLC, which it has licensed  to RFPS. 
  • A patent application covering the business process for structuring and issuing RISCMTP-Notes is currently pending with the USPTO.

RISCMTP-Notes are backed by portfolios that are managed by some of the world’s best professional managers of short-term investments.

  • All RISCMTP-Notes will have their issuance proceeds invested in a portfolio that is managed in a segregated account (the RISCMTP-Note Portfolio) by a professional investment manager (the Investment Manager) according to a specified set of investment criteria set out in the Investment Management Agreement (the IMA) for each RISCMTP-Note (the IMA Criteria).
  • The initial RISCMTP-Note Portfolio will be managed by DWS (formerly known as Deutsche Investment Management Americas, Inc.).
  • The RISCMTP-Note Portfolio will be managed without leverage to provide:
  • capital preservation
  • liquidity
  • low market volatility
  • attractive performance characteristics (e.g., relative to Performance Benchmarks)
  • This is achieved by maintaining a weighted average maturity on the RISCMTP-Note Portfolio of 9 months or less and each security in the portfolio must mature and settle by the Annual Optional Redemption Date or by the maturity date, whichever is later.
  • The Investment Manager will deploy the RISCMTP-Note issuance proceeds to acquire the collateral that backs each RISCMTP-Note (i.e., the RISCMTP-Note Portfolio) according to the investment guidelines summarised below and further specified in the IMA.
  • Permitted Investments: Obligations of the U.S. Department of Treasury and Servicing Assets as previously referenced (see IMA).
  • Maturities & Duration: The effective duration of the RISCMTP-Note Portfolio may not exceed 9 months. All Treasuries must mature on or before the next RISCMTP-Note Annual Optional Redemption Date. Servicing Assets have a maximum maturity of 60 days when acquired, provided that those with maturities exceeding 30 days may not exceed 10% of the RISCMTP-Note Portfolio. In any case, all RISCMTP-Note Portfolio assets must mature and settle no later than the next Annual Optional Redemption Date.
  • Performance Benchmarks: O/N Fed Funds Effective Rate, 3 to 6-month U.S. Treasuries and government money market funds.
Redemption by RISCMTP-Note Holder:

  • RISCMTP-Notes may be redeemed by the holder at any time, on an In-Kind or LAV basis.
  • Redemption settlement whether in cash or portfolio securities will be same-day, subject to the redemption notice being received by 8 a.m. New York time on any business day.
  • Finally, all RISCMTP-Notes may be redeemed by the issuer or the holder for their Book Value on the Annual Optional Redemption Date or may be increased through additional investment.

Redemption by RISCMTP-Note Issuer:

  • In addition to having the right to redeem the notes on the Annual Optional Redemption Date, the RISCMTP-Note issuer will have the right to execute one or more early redemptions at Book Value (in whole or in part, the Issuer Call Option Redemptions) if:

    • the Investment Manager is unable to reinvest sufficiently in U.S. Treasuries to maintain IMA concentration limits, or
    • the Issuer has been unable to replace the Investment Manager or the Calculation Agent after its bankruptcy or termination, or
    • the Investment Manager is unable to invest in Permitted Investments with a positive yield.
  • All Issuer Call Option Redemptions will be subject to Notice being given by the Manager on behalf of the Issuer and will be settled in cash on the date that payments are received on RISCMTP-Note Portfolio securities as they mature. Settlement amounts received from the maturing RISCMTP-Note Portfolio securities will be paid to all RISCMTP-Note holders on a proportional basis.
Market AlternativesRISCMTP-Notes
FeaturesGov't Money
Market Funds
Ultra-Short
Treasury
Bond ETFs
Repos
Collateral UtilityA few casesNoNoYes
Liquidity Options
In-Kind / LAV redemptionn/aAt any timen/aAt any time
Book value redemptionAt any timen/an/aAt AORD1 or Maturity
Sale at market pricen/aAt any timen/aAt any time
Repo of noten/aMayben/aAt any time
Settlement Date of Liquidity Option:
RedemptionSame dayNot same dayn/aSame day
Salen/aSame dayn/aSame day
Out-performance vs. O/N Fed Funds Effective RateNoNoMaybeExpected
Maturity Daten/an/aAgreed by parties10-year

1Annual Optional Redemption Date

  • RISCMTP-Notes have a Principal Amount of 100% and are sold with a “Utility Premium” (UP) of 1.0% to reflect their value as managed, collateral-eligible investments. A portion of the UP will be amortised at issuance of the Notes, and the balance will be earned and amortised on each anniversary date until the 10th year. The Book Value of the Notes will include the Unamortised Utility Premium (UUP) on the annual Put/Call date, i.e., the Annual Optional Redemption Date.
  • The UP is a prepayment by the investor of 10 years’ worth of RFPS Ltd., agent and service provider fees to pay for the maintenance of the Issuer and the Notes and the unique utility features of the Notes.
  • The UUP will be combined with the Principal to make up the Book Value of the Notes, which will be the exercise price for the annual Noteholder and issuer redemption options.
  • The Investor may recover all or part of the unused portion of the amortised UP in each year by selling the Notes in the market (e.g., via a market maker). The Investor will otherwise be able to recoup the UUP:

    • at market value (i.e., LAV), by giving a Noteholder Early Redemption Notice;
    • at Book Value, by giving a Noteholder Annual Redemption Option Notice
  • Having the UP imbedded in the Notes increases their collateral value (by the amount of the UUP), reducing the need to overcollateralise security requirements and adding yet another utility feature.
Source of LiquidityGov't Money
Market Funds
Ultra-Short
Treasury
Bond ETFs
Commercial PaperReposRISCMTP-Notes
Selln/aYesYesn/aYes
Repon/an/an/an/aYes
RedeemYesYesn/an/aYes
  • According to the “look-through approach” or LTA under BIS CRE60, banks holding investments in RISCMTP–Notes in the banking book should “risk weight the underlying exposures of a fund as if the exposures were held directly by the bank.” As the US government securities carry a zero-risk weight, so should the government bond component of the investments in RISCMTP–Notes. 
  • RISCMTP-Notes are designed to satisfy the requirements set out in regulation 17 CFR 23.156(a)(1)(ix) enacted by the Commodities Futures Trading Commission for Eligible Collateral for derivatives.
  • The US Patent and Trademark Office (USPTO) has issued a notice of allowance recognizing RISCMTP-Notes as a trademark belonging to the RISConsulting Group LLC, which it has licensed  to RFPS. 
  • A patent application covering the business process for structuring and issuing RISCMTP-Notes is currently pending with the USPTO.

RISCMTP-Notes are backed by portfolios that are managed by some of the world’s best professional managers of short-term investments.

  • All RISCMTP-Notes will have their issuance proceeds invested in a portfolio that is managed in a segregated account (the RISCMTP-Note Portfolio) by a professional investment manager (the Investment Manager) according to a specified set of investment criteria set out in the Investment Management Agreement (the IMA) for each RISCMTP-Note (the IMA Criteria).
  • The initial RISCMTP-Note Portfolio will be managed by DWS (formerly known as Deutsche Investment Management Americas, Inc.).
  • The RISCMTP-Note Portfolio will be managed without leverage to provide:
  • capital preservation
  • liquidity
  • low market volatility
  • attractive performance characteristics (e.g., relative to Performance Benchmarks)
  • This is achieved by maintaining a weighted average maturity on the RISCMTP-Note Portfolio of 9 months or less and each security in the portfolio must mature and settle by the Annual Optional Redemption Date or by the maturity date, whichever is later.
  • The Investment Manager will deploy the RISCMTP-Note issuance proceeds to acquire the collateral that backs each RISCMTP-Note (i.e., the RISCMTP-Note Portfolio) according to the investment guidelines summarised below and further specified in the IMA.
  • Permitted Investments: Obligations of the U.S. Department of Treasury and Servicing Assets as previously referenced (see IMA).
  • Maturities & Duration: The effective duration of the RISCMTP-Note Portfolio may not exceed 9 months. All Treasuries must mature on or before the next RISCMTP-Note Annual Optional Redemption Date. Servicing Assets have a maximum maturity of 60 days when acquired, provided that those with maturities exceeding 30 days may not exceed 10% of the RISCMTP-Note Portfolio. In any case, all RISCMTP-Note Portfolio assets must mature and settle no later than the next Annual Optional Redemption Date.
  • Performance Benchmarks: O/N Fed Funds Effective Rate, 3 to 6-month U.S. Treasuries and government money market funds.
Redemption by RISCMTP-Note Holder:

  • RISCMTP-Notes may be redeemed by the holder at any time, on an In-Kind or LAV basis.
  • Redemption settlement whether in cash or portfolio securities will be same-day, subject to the redemption notice being received by 8 a.m. New York time on any business day.
  • Finally, all RISCMTP-Notes may be redeemed by the issuer or the holder for their Book Value on the Annual Optional Redemption Date or may be increased through additional investment.

Redemption by RISCMTP-Note Issuer:

  • In addition to having the right to redeem the notes on the Annual Optional Redemption Date, the RISCMTP-Note issuer will have the right to execute one or more early redemptions at Book Value (in whole or in part, the Issuer Call Option Redemptions) if:

    • the Investment Manager is unable to reinvest sufficiently in U.S. Treasuries to maintain IMA concentration limits, or
    • the Issuer has been unable to replace the Investment Manager or the Calculation Agent after its bankruptcy or termination, or
    • the Investment Manager is unable to invest in Permitted Investments with a positive yield.
  • All Issuer Call Option Redemptions will be subject to Notice being given by the Manager on behalf of the Issuer and will be settled in cash on the date that payments are received on RISCMTP-Note Portfolio securities as they mature. Settlement amounts received from the maturing RISCMTP-Note Portfolio securities will be paid to all RISCMTP-Note holders on a proportional basis.
View Table
  • RISCMTP-Notes have a Principal Amount of 100% and are sold with a “Utility Premium” (UP) of 1.0% to reflect their value as managed, collateral-eligible investments. A portion of the UP will be amortised at issuance of the Notes, and the balance will be earned and amortised on each anniversary date until the 10th year. The Book Value of the Notes will include the Unamortised Utility Premium (UUP) on the annual Put/Call date, i.e., the Annual Optional Redemption Date.
  • The UP is a prepayment by the investor of 10 years’ worth of RFPS Ltd., agent and service provider fees to pay for the maintenance of the Issuer and the Notes and the unique utility features of the Notes.
  • The UUP will be combined with the Principal to make up the Book Value of the Notes, which will be the exercise price for the annual Noteholder and issuer redemption options.
  • The Investor may recover all or part of the unused portion of the amortised UP in each year by selling the Notes in the market (e.g., via a market maker). The Investor will otherwise be able to recoup the UUP:

    • at market value (i.e., LAV), by giving a Noteholder Early Redemption Notice;
    • at Book Value, by giving a Noteholder Annual Redemption Option Notice
  • Having the UP imbedded in the Notes increases their collateral value (by the amount of the UUP), reducing the need to overcollateralise security requirements and adding yet another utility feature.
View Table
  • According to the “look-through approach” or LTA under BIS CRE60, banks holding investments in RISCMTP–Notes in the banking book should “risk weight the underlying exposures of a fund as if the exposures were held directly by the bank.” As the US government securities carry a zero-risk weight, so should the government bond component of the investments in RISCMTP–Notes. 
  • RISCMTP-Notes are designed to satisfy the requirements set out in regulation 17 CFR 23.156(a)(1)(ix) enacted by the Commodities Futures Trading Commission for Eligible Collateral for derivatives.
  • The US Patent and Trademark Office (USPTO) has issued a notice of allowance recognizing RISCMTP-Notes as a trademark belonging to the RISConsulting Group LLC, which it has licensed  to RFPS. 
  • A patent application covering the business process for structuring and issuing RISCMTP-Notes is currently pending with the USPTO.

RISCMTP-Notes Product Brief

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