Item 5: Fees and Compensation
CCSZF Management LLC has entered into a Tri-Partite Agreement with CCSZF Cayman
Ltd and Relative Value Trading Fund Ltd. and receives compensation from its client based
on negotiated fee schedules specific to each class of shares. For certain classes of
investments, the compensation is based on a fixed fee, which may periodically be
renegotiated based on assets under management. These classes of investments are charged
an annual fixed management fee which is set at the beginning of each calendar year and
paid quarterly in advance. For other classes of investments in Relative Value Trading Fund,
the compensation includes both management fees and performance-based incentive fees.
The management fees are charged quarterly at the beginning of each quarter based on a
percentage of the starting net asset value of the investment as specified in the Private Place
Memorandum of Relative Value Trading Fund (PPM). The incentive fees are charged at
the end of the calendar year or upon redemption of underlying investment based on a
certain percentage of the net capital appreciation as specified in the PPM.
CCSZF’s fee schedules, including both management fees and incentive fees applicable to
various classes of investments, are negotiated and set at the start of each calendar year.
Under the Tri-Partite Agreement, Relative Value Trading Fund Ltd shall pay a
management fee to the Investment Manager CCSZF Management LLC (the “Management
Fee”) and an advisory fee to the Fund Advisor CCSZF Cayman Ltd (the “Advisory Fee”),
in amounts and with frequency as agreed by the contracted parties from time to time. The
aggregate amounts of the Management Fee and the Advisory Fee will be equal to the Fees,
as described in the Private Place Memorandum of Relative Value Trading Fund (PPM).
The Fund has entered into various agreements with Industrial and Commercial Bank of
China Financial Services LLC, a Delaware limited liability company (“ICBCFS”) to
receive clearing, financing and custodial services from ICBCFS. Under various agreements
with ICBCFS, the Fund pays ICBCFS according to a fee schedule which includes
transaction-based fees with monthly minimums and variable fees & surcharges linked to
the Fund’s usage of balance sheet, trading volume and profits generated through such
trading facility, paid quarterly. The fee schedule may be updated or modified from time to
time, based on changes in trading activities and mutual negotiations. The Firm has also
entered various agreements with other companies and other parties to receive clearing,
financing, custodial and other services based on the negotiated fee schedules, and will enter
new agreements with companies for such services to satisfy the needs of the Fund.
The Fund also pays for all of its operating expenses which include, without limitation:
expenses incurred in the buying, selling and holding of portfolio investments, such as all
taxes, administrative expenses and investment expenses (e.g., expenses which are
reasonably determined to be directly related to the investment and trading of the Fund’s
assets, such as brokerage and commission expenses, margin, premium and interest
expenses, out-of-pocket costs related to investments and potential investments, including
travel expenses, research, data, software and related equipment expenses, consultant
expenses, fees and charges and disbursements of custodians and sub-custodians, and fees
and charges and disbursements of escrow agents); the cost of maintaining the Fund’s
registered office; accounting, legal and auditing expenses; Directors’ fees; insurance
expenses; fees and expenses of the Fund’s service providers; annual reports and other
financial information and similar ongoing operational expenses.
For more information on brokerage transactions and costs, please see Item 12: Brokerage
Practices.
Investors in the Fund are only allowed to withdraw capital under certain circumstances as
described in the Fund’s governing documents. CCSZF will not refund any of its fees paid
in advance.