Managing Risk

At Spartan, we believe that solid risk management and compliance are one of the cornerstones of any money management business. Our Risk Management Committee, comprised of our Chief Risk & Compliance Officer (CRO), Legal Counsel and Chief Investment Officer (CIO), utilizes the following procedures:

1. Separation of Duties: we ensure separation of duties between the trading function and the risk management/compliance function by having separate individuals in charge of each function and by having the Chief Risk & Compliance Officer report directly to the President. Externally, we utilize a 3rd party fund administrator to independently calculate the fund’s net asset value, a major Canadian bank acts as custodian for the assets of the funds that we manage and we also use a nationally recognized auditing firm to independently audit the fund’s financial statements.

2. Trading Limits: typically, our portfolio contains 50 trading ideas at any one time, but could contain upwards of 200, with a maximum exposure of 30% to any given strategy.

3. Operational Risk: we ensure that, amongst other things:
   1. trade blotters are being entered into our system by someone other than the trading group
   2. all movements of funds require authorization from two senior officers, one of whom is a non-trading officer
   3. all trades are tracked by our Chief Risk & Compliance Officer

4. Risk Monitoring: our Chief Risk & Compliance Officer:
   1. monitors a range of risk factors, including position limits, concentration and margin usage in “real time”.
   2. “stress tests” our portfolios by looking at how the portfolio would respond to large market movements.

5. Regulatory Compliance: registrations, along with all other necessary regulatory requirements including insurance, personal trading policies and capital requirements, are maintained by our Chief Risk & Compliance Officer.

6. Legal: legal counsel is required to review all documentation before they are signed.