PROSPERGATE CAPITAL LTD, is a company registered under the laws of the Republic of Cyprus, with registration number C369583. It is a regulated Cyprus Investment Firm (‘CIF’) by the Cyprus Securities and Exchange Commission (‘CySEC’) under license number 361/18. The Company is also acting as the External Manager of PROSPERGATE FUND AILFNP V.C.I.C LTD under the Small Alternative Investment Fund Managers Law of 2020 (L. 81(I)/2020).

The registered office of the Company is situated at 2 Filiou Zannetou street, 3021 Limassol Cyprus.

For the purposes of, inter alia, this Remuneration Policy, the Company is operating under:

– Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on Markets in financial instruments (“Market in Financial Instruments Directive” or “MiFID II” which was implemented in Cyprus by the Investment Services and Activities and Regulated Markets Law of 2017 (Law 87(Ι)/2017).

– The Commission Delegated Regulation (EU) 2017/565, supplementing Directive 2014/65/EU of the European Parliament and of the Council with regard to organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive and Section 2 of the Questions and Answers of the European Securities and Markets Authority (“ESMA”) with respect to the provision of CFDs and other speculative products to retail investors under MiFID.

– The Directive 2011/61/E U of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers . The Alternative Investment Funds Law of 2018 L.124(I) of 2018 (“the AIF Law”) and the Small Alternative Investment Fund Managers Law of 2020 (L.81(I) of 2020) (“the SMALL AIFM Law”).

– the Prudential Supervision of Investment Firms Law of 2021 (165(I)/20211) the EBA guidelines2 and the relevant CySEC guidelines on sound Remuneration3

Prospergate ensures that its remuneration arrangements are compliant with the Remuneration Requirements and that the remuneration arrangements are aligned with “Conflict of Interest” and “Conduct of Business Obligations”, as set out in the Company’s Internal Operation Manual and other related documents, so that client’s interests are not impaired by the remuneration policies and practices adopted by the firm in the short, medium and/or long term. This Policy and related practices are consistent with and promote sound and effective risk management and are gender neutral.

1. https://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=7f44e19e-f8a1-4550-a7f9-7f1435297a3d

2. https://www.eba.europa.eu/sites/default/files/document_library/Publications/Guidelines/2021/1016720/Draft%20Final%20report%20on%20GL%20on%20remuneration%20policies%20under%20CRD.pdf

3. https://www.cysec.gov.cy/CMSPages/GetFile.aspx?guid=e1594ae4-294f-4908-997b-4685ea29e79b

This Policy is designed to support Prospergate’s strategic business objectives and core values in an appropriate risk-controlled manner, by providing the remuneration mechanisms for Prospergate to attract, retain and motivate its colleagues in a manner that is consistent with the expectations of the Remuneration Requirements. In addition to the Remuneration Requirements, under Regulation (EU) 2019/2088 (the “Sustainable Finance Disclosure Regulation”), a financial market participant (such as Prospergate) is required to include in its remuneration policy information on the integration of sustainability risks and how the remuneration structure is consistent with the integration of sustainability risks, such information is set out below.

The EBA Guidelines define remuneration as:

“all forms of fixed and variable remuneration and includes payments and benefits, monetary or non-monetary, awarded directly to staff by or on behalf of investment firms in exchange for professional services rendered by staff, carried interest payments….and other payments made via methods and
vehicles which, if they were not considered as remuneration, would lead to a circumvention of the remuneration requirements of IFD”.;

”Fixed remuneration” primarily reflects relevant professional experience and organizational responsibility as set out in an employee’s job description as part of his or her terms of employment.

“Variable remuneration” reflects a sustainable and risk adjusted performance of the employee, as well as performance in excess of the employee’s job description.

In accordance with Section 24(1) –(3) of this Law (titled: “Remuneration Policies”), each CIF, when establishing and applying its remuneration policies for categories of staff, such overall remuneration should be equal to at least the lowest remuneration received by the same category of staff taking into account whether the professional activities of each employee have a material impact on the risk profile of the CIF or of the assets that it manages and shall comply with the following principles:

Section 24(1)
(a) The policy is clearly documented and proportionate to the size, internal organization and nature as well as to the scope and complexity of the activities of the CIF

(b) The policy is gender-neutral

(c) It is consistent with and promotes sound and effective risk management

(d) It is in line with the business strategy and objectives of the CIF and also takes into account long term effects of the investment decisions taken

(e) It contains measures to avoid conflicts of interest, encourages responsible business conduct and promotes risk awareness and prudent risk taking

(f) The Board of Directors in its supervisory function adopts and periodically reviews the remuneration policy and has overall responsibility for overseeing its implementation

(g) Its implementation is subject to a central and independent internal review by control functions at least annually

(h) Staff engaged in control functions are independent from the business units they oversee, have appropriate authority, and are remunerated in accordance with the achievement of the objectives linked to their functions, regardless of the performance of the business areas they control

(i) The remuneration of the senior officers, in the risk management and compliance functions, is overseen by the remuneration committee or by the Board of Directors in its supervisory function

(j) The remuneration policy makes a clear distinction between the criteria applied to determine the following:
a. Basic fixed remuneration, which primarily reflects relevant professional experience and organisational responsibility as set out in the employees job description as part of his or her terms of employment
b. Variable remuneration, which reflects a sustainable and risk adjusted performance of the employee, as well as performance in excess of the employee’s job description

(k) The fixed component represents a sufficiently high proportion of the total remuneration so as to enable the operation of a fully flexible policy on variable remuneration components, including the possibility of paying no variable remuneration component.

Section 24(2) –
For the purposes of paragraph (k) of subsection (1), CIFs shall set the appropriate rations between the variable and the fixed component of the total remuneration in their remuneration policies, taking into account the business activities of the CIF and associated risks, as well as the impact that different categories of staff referred to in subsection (1) have on the risk profile of the CIF.

Section 24(3)-
CIFs shall establish and apply the principles referred to in subsection (1) in a manner that is appropriate to their size and internal organization and to the nature, scope and complexity of activities.

This Remuneration Policy (hereinafter – «the Policy») of the Company applies to all members of the Prospergate Board of Directors and Prospergate employees.

The remuneration practice of the Company is based on the fixed remuneration method and thus, based on the individual’s academic accolades, years of employment, experience, position in the Company and the risks associated with the position.

Although the Company does not exclude the possibility of using the method of “Variable Remuneration” in the future, it has not yet implemented the same. In case it considers remunerating any employee(s) with variable remuneration, it will consider the business activities and associated risks, as well as the impact that different categories of staff have on the risk profile of the firm. It will also take into account the provisions of Section 26 of the Prudential Supervision of Investment Firms law of 2021 (165(i)/2021) as set out below in more detail.

A “discretionary bonus” is set out as a possibility in the employment agreements signed between the Company and all its employees. As per the provisions of the Contract of Employment, such a “bonus” is not at all guaranteed but may be distributed at the end of the given calendar year to the employees, based on the General Manager’s discretion. As a rule of thumb, the General Manager might decide to distribute a monetary bonus to all the employees of the company provided that the financial performance of the CIF for the year ended was good. The amounts of the bonus remuneration are distributed fairly and in accordance with the fixed remuneration each employee is awarded.

The Company takes any and all reasonable steps to ensure that any bonus remuneration given to the employees of the Company reflects the letter of the laws and guidelines of the EBA and ESMA, as aforementioned.

The Company has not yet implemented a clawback policy for the annual bonus awards. However, it might probably implement such policy, thus recoup (or “claw back”) bonuses in the event of misconduct.

The Policy and related practices are consistent with the principle of equal pay for male, female and diverse workers for equal work or work of equal value as laid down in Article 157 of the Treaty on the Functioning of the European Union (TFEU) and that are assumed to affect all sexes equally.

This Policy and all related employment conditions that have an impact on pay are gender neutral. This includes, but is not limited to remuneration, including award and payout conditions, recruitment policies, career development and succession plans, access to training and ability to apply for internal vacancies. In order to monitor that gender neutral remuneration policies are applied, Prospergate has documented job descriptions for all positions and determined which positions are considered as equal or of equal value per unit of measurement or time rate, taking into account at least the type of activities, tasks and responsibilities assigned to the position or staff member.

As already mentioned, the CIF does not give any variable remuneration to its employees and/or the Board of Directors, although it has the right to amend its remuneration policy in order to include the variable remuneration practice. However, in case the Company decides to remunerate its employees and/or Board of Directors using a variable remuneration basis (i.e. performance related), the total amount of variable remuneration will be based on a combination of the assessment of the performance of the Prospergate Group of Companies, the individual employee, and his/her business unit concerned.

In addition to the general requirements under this Policy and, inter alia, by virtue of Section 26 of the Prudential Supervision of Investment Firms Law, when the CIF awards and pays such remuneration to categories of staff, it should always be appropriate to the CIF’s size and internal organization, the nature, scope and complexity of its activities.

In case the Company decides to adopt the Variable Remuneration practice, the following specific requirements will be taken into account:

(a) when assessing the performance of the individual, both financial and non‐financial criteria will be taken into account;

(b) the assessment of the performance referred to in point (a) will be based on a multi‐year period, taking into account Prospergate’s business cycle and its business risks;

(c) the variable remuneration will not affect Prospergate’s ability to ensure a sound capital base;

(d) payments relating to the early termination of an employment contract will reflect the performance achieved over time by the individual and shall not reward failure or misconduct;

(e) remuneration packages relating to compensation or buy out from contracts in previous employment will be aligned with Prospergate’s long‐term interests and will be structured to not reward failure;

(f) The measurement of performance used as a basis to calculate pools of variable remuneration will take into account all types of current and future risks and Prospergate’s capital and liquidity requirements;

(g) the allocation of the variable remuneration components will take into account all types of current and future risks;

(h) up to 100 % of the variable remuneration will be contracted where the financial performance of Prospergate is subdued or negative, including through malus or clawback arrangements subject to criteria which will be set by the Company that will cover in particular situations where the individual in question:

(i) participated in or was responsible for conduct which resulted in significant losses for the Company;

(ii) is no longer considered fit and proper;

(i) Employees will be prohibited from using personal hedging strategies or remuneration and liability‐ related insurances to undermine the principles referred to in this section.

(j) Variable remuneration will not be paid through financial vehicles or methods that facilitate non‐compliance with this Policy.

The board of directors of Prospergate Capital Ltd (the “Board”) has adopted, maintains and oversees the implementation of the Policy. The Board is responsible for the Policy and Prospergate’s remuneration arrangements including approval of any subsequent material exemptions made for individual staff members. The senior management team is responsible for the day-to-day implementation of the Policy and the monitoring of compliance risks related to the Policy.

The Board is responsible for approving this Policy and any further amendments to the Policy. The implementation of the Policy is subject to a central and independent internal review by control functions at least annually. Staff engaged in control functions are independent from the business units they oversee, have appropriate authority, and are remunerated in accordance with the achievement of the objectives linked to their functions, regardless of the performance of the business areas they control.

The Company, due to its current size and business activities, has not established a remuneration committee but the Board of Directors, who holds the discretionary right will decide on and distribute any variable remuneration that might be distributed in the future and will take into consideration all which has been set out in this Policy and related practices including the incentive for managing risk, capital and liquidity.

The General Manager will determine and oversee the remuneration of the executive members of Board and oversee directly the remuneration of the senior officers in the independent control functions, including the compliance function and the risk management function.

The risk management function will assist in and inform on the definition of suitable risk-adjusted performance measures (including ex post adjustments), as well as in assessing how the variable remuneration structure affects (or will affect) the firm’s risk profile and culture. The risk management function will validate and assess risk adjustment data as well as be invited to assist the General Manager on this matter.

The compliance function will analyse how the remuneration policy affects (or will affect) Prospergate’s compliance with legislation, regulations, internal policies and risk culture and will report all identified compliance risks and issues of non-compliance to the Board. The findings of the compliance function will be taken into account by the General Manager during the approval, review procedures and oversight of the remuneration policy.

The internal audit function will carry out an independent review of the design, implementation and effects of the remuneration policies on the Company’s risk profile and the way these effects are managed.

No individual is allowed to be involved in designing their own compensation plans.

As well as the methodologies outlined above, the performance management process (and therefore the remuneration arrangements) will also integrate non-financial methodologies in order to promote sound and effective risk management with respect to sustainability risks. This ensures that Prospergate’s remuneration structure will not encourage excessive risk‐taking with respect to sustainability risks and will be linked to risk‐ adjusted performance.

In order to achieve this, specific sustainability goals will be developed. All employees of Prospergate will be expected to support the business in undertaking its activities in a responsible manner through the inclusion of sustainability considerations in their roles and in their decision-making process.

These sustainability related goals will also be considered as part of the individual assessment referred to in this Policy.

This Policy will be internally disclosed to all staff and accessible for all staff at all times.

In the event that Variable Remuneration practices are adopted by the Company, the latter will inform its employees on the characteristics of their variable remuneration, as well as the process and criteria that will be used to assess the impact of their professional activities on the risk profile of the firm and their variable remuneration. In particular, the appraisal process with regard to the individual’s performance will be properly documented and transparent to the staff concerned.

The Company will notify Employees affected by material changes in this Remuneration Policy and/or the adoption of Variable Remuneration practices.

This policy may be updated and changed from time to time in order to comply with any new legal requirements and/or amendments. Should such changes commence, the updated document will be published on our website.

If you would like to contact us with any queries or comments, please send an email to [email protected]

Prospergate Capital Ltd is a Cyprus Investment Firm (CIF) that is authorized by the Cyprus Securities and Exchange Commission (CySEC) (License number 361/18), with the license to perform portfolio management services. The company externally manages, on a discretionary basis, client funds that are located in global financial institutions pursuant to a pre-defined investment strategy. Since the risk of investing in certain financial instruments is generally high and the market value of such financial instruments may be exposed to varying factors, such as a turbulent economic and political environment, fluctuations in foreign exchange rates and shifts in market sentiment, the investor takes full responsibility for the risk involved with such investments and understands and acknowledges that investment yield and or capital preservation is not guaranteed. The investor should ensure that they are fully aware of the potential risks connected with Portfolio Management services and with their chosen investment strategy. The investor should be aware of the fact that some investment strategies may involve a higher degree of risk compared to other strategies and investments within this framework which may result in the loss of all or part of the initial investment. The investor should also understand and acknowledge that past performance does not guarantee future returns. Past performance should not be taken as an indication or guarantee of future performance.