Cube

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Important Notice

This website is maintained by CET Capital Limited which is a limited company registered in England. Its registered offices are at Kemp House, 152-160 City Road, London, EC1V 2DW. CET is authorised and regulated by the Financial Conduct Authority no. 446267.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

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Retail Investors

Structured products are “complex instruments” this means that they will only be appropriate for you if you have sufficient knowledge and experience. In order to access the site you need to be able to agree to all of the following statements

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than ***. This includes any Prospectus. *** is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, *** shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes any warranty as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.

Risk Warnings

You should always bear in mind that;

  • You already hold other retail investments like funds, investment trusts or structured products
  • You would consider yourself to be a knowledgeable and informed investor
  • You understand the way that the investment return, the maturity value and any income are calculated by reference to the performance of underlying assets
  • You realize that you are not investing in the underlying assets but instead into a products whose performance is linked to these assets
  • You are prepared to invest into products where your capital is at risk
  • You have sufficient financial resources to be able to accept a loss on investments you make
  • You understand that the investment return and any coupon that you receive from structured products will depend on the performance of the underlying assets, and so you may not receive any investment return or income
  • The return of the capital may also be linked to the performance of the underlying assets. You understand how this is calculated, and appreciate that the amount that you receive back when a product matures may be less than you paid for it
  • The defined value of each product will only be realised if the product is held to the maturity date. You understand that if you sell a product before the maturity date you will not get the defined value, and the amount that you receive may be less than the amount that you invested.
  • You understand that if the issuer is unable to meet their obligations to pay the amount due when the product matures, that you will not receive the defined value and will loose some or all of the money you have invested
  • You understand that there are charges built into structured products.
  • You understand the personal tax implications associated with investing in structured products

United States Persons

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area.

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than CET Capital Limited. This includes any Prospectus. CET Capital Limited is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, CET Capital Limited shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes any warranty as to the accuracy of any information or content on the website. The description of any Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on request and should be read prior to making any investment.

Risk Warnings

Investments of the type described therein may involve a high degree of risk, and the value of such instruments may be highly volatile. Such risks may include, without limitation, risk of adverse or unanticipated market developments, risk of counterparty or issuer default and risk of liquidity. Accordingly you must independently determine, with your own advisors, the appropriateness for you of the securities/transaction before investing or transacting. You should always bear in mind that;

  • The investment performance of any security referred to on this website can be volatile and can go up or down and you can lose your entire investment.
  • Past performance is not an indication of future performance.
  • Rates of exchange may affect the value of investments.
  • Applications to invest in securities referred to on this website must only be made on the basis of the relevant Prospectus.

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NO ACTION HAS BEEN TAKEN OR WILL BE TAKEN THAT WOULD PERMIT A PUBLIC OFFERING OF THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION IN WHICH ACTION FOR THAT PURPOSE IS REQUIRED. NO OFFERS, SALES, RESALES OR DELIVERY OF THE SECURITIES DESCRIBED HEREIN OR DISTRIBUTION OF ANY OFFERING MATERIAL RELATING TO SUCH SECURITIES MAY BE MADE IN OR FROM ANY JURISDICTION EXCEPT IN CIRCUMSTANCES WHICH WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS AND REGULATIONS AND WHICH WILL NOT IMPOSE ANY OBLIGATION ON CET OR ANY OF ITS AFFILIATES. THIS WEBSITE DOES NOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ISSUES RELATED TO AN INVESTMENT IN THE SECURITIES/TRANSACTION. PRIOR TO TRANSACTING, POTENTIAL INVESTORS SHOULD ENSURE THAT THEY FULLY UNDERSTAND THE TERMS OF THE SECURITIES/TRANSACTION AND ANY APPLICABLE RISKS. THIS WEBSITE IS NOT A PROSPECTUS FOR ANY SECURITIES DESCRIBED HEREIN. INVESTORS SHOULD ONLY SUBSCRIBE FOR ANY TRANSFERABLE SECURITIES DESCRIBED HEREIN ON THE BASIS OF INFORMATION IN THE RELEVANT PROSPECTUS (WHICH HAS BEEN OR WILL BE PUBLISHED AND MAY BE OBTAINED FROM CET), AND NOT ON THE BASIS OF ANY INFORMATION PROVIDED HEREIN.

CET Investing is a trading division of CET Capital Ltd, Registered in England No. 04986900. CET Capital Ltd is regulated by the Financial Conduct Authority No. 446267. This website is confidential, and no part of it may be reproduced, distributed or transmitted without the prior written permission of CET.

(1) I HAVE READ UNDERSTOOD AND ACCEPT THIS DISCLAIMER AND

(2) I CONFIRM THAT I AM NOT A RESIDENT OF THE UNITED STATES AND UNDERSTAND (A) THAT THE INFORMATION THAT FOLLOWS IS ONLY BEING OFFERED TO AND IS ONLY INTENDED TO BE AVAILABLE TO PERSONS WHO ARE NOT RESIDENTS OF THE UNITED STATES AND (B) THAT CET AND ITS AFFILIATES WILL RELY ON THE ACCURACY OF THIS INFORMATION

Please read and agree to the following statements

Structured products are “complex instruments” this means that they will only be appropriate for you if you have sufficient knowledge and experience. In order to access the site you need to be able to agree to all of the following statements

  • I already hold other retail investments like funds, investment trusts or structured products
  • I consider myself to be a knowledgeable and informed investor
  • I understand the way that the investment return, the maturity value and any income are calculated by reference to the performance of underlying assets
  • I realize that I am not investing in the underlying assets but instead into a products whose performance is linked to these assets
  • I am prepared to invest into products where my capital is at risk
  • I have sufficient financial resources to be able to accept a loss on investments I make
  • I understand that the investment return and any coupon that I receive from structured products will depend on the performance of the underlying assets, and so I may not receive any investment return or income
  • The return of the capital may also be linked to the performance of the underlying assets.
  • I understand how this is calculated, and appreciate that the amount that you receive back when a product matures may be less than I paid for it
  • The defined value of each product will only be realised if the product is held to the maturity date. I understand that if I sell a product before the maturity date I will not get the defined value, and the amount that I receive may be less than the amount that I invested.
  • I understand that if the issuer is unable to meet their obligations to pay the amount due when the product matures, that I will not receive the defined value and will lose some or all of the money I have invested
  • I understand that there are charges built into structured products.
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Frequently Asked Questions

Frequently Asked Questions

Why do Cube offer investments through platforms?

Cube is the first independent structured investment provider to develop investments specifically designed to be bought through wrap and brokerage platforms. We believe that most retail investors want to hold structured investments alongside other assets in existing wrap and brokerage accounts.

What does Cube Offer?

Cube offer unbundled listed securities that can be purchased directly from wrap and brokerage platforms.

Is a Plan necessary?

A plan is essentially an administration wrapper that allows advisers to buy the investment for their clients. The Plan will also pay the adviser their agreed fee, and will provide regular valuations for the investor. For investors who already have an account with a wrap or platform, this plan wrapper is unnecessary, as the dealing and administration is already provided (and charged for), by the platform.

What is the difference between buying direct through a platform and a plan manager?

All that an adviser needs to do to buy a structured investment through a wrap is to give the wrap an instruction to buy the security. Provided that there is enough cash in the clients account, the wrap will execute the trade immediately. When an adviser buys a plan, they need to fill in the application for each client, attach a cheque and send this to the Plan Manager. They have to then wait for a confirmation, and then will have to remember to add the plan value to the clients other assets when reviewing the client’s portfolio.

Buying a structured investment directly through a wrap also means that there is far less administration for the investor and their adviser. There is no application form to complete as the investor already has an account. The reduced administration burden eliminates a major impediment for a lot of investors and advisers. In the post RDR world many advisers are struggling to justify the time and effort required to invest into off platform structured plans.

Do these cost savings mean Cube can offer improved terms?

Absolutely. Compared with Structured Plans, a direct investment through a Wrap can offer improved terms because it is cheaper and quicker for Cube to issue a note and prepare the brochure than it is for other providers to issue a note and create a plan. The reduction of time, cost and risk all feed directly through to better terms for investors.

By investing directly into structured investments through a Wrap, Cube can eliminate costly layers of double administration, and investors also benefit from the additional liquidity offered by listed products.

So how much are the cost savings?

Eliminating the plan means eliminating the costs associated with the plan. To put this into context when plan management administration and brokerage fees are disclosed they are typically between 0.5% and 1%. This is the value that we are able to keep in the product to benefit investors.

I haven’t used structured products because it has been difficult to assess past performance

Structured products have received a lot of bad publicity recently, and have been under close inspection by the regulator. The focus of the regulators attention has been products distributed by the high-street banks through their own advisers. Products distributed through advisers, and those used by discretionary managers have in fact performed very well. The reality is that all structured products that have matured over the last 5 years have delivered exactly what they promised, and many have offered a better return than the underlying market. Looking forward we think that structured products can be created that offer a very appealing mix of risk and return for investors looking forward.

What FCA permissions do I need to advise on Cube’s investments?

Listed structured products fall under the FCA definition of “retail investment products”. This includes both structured investments and Plans. Bundling a structured investment into a plan makes absolutely no difference to the way that the regulator classifies it. If you have the requisite professional qualification to advise on other retail investments, such as unit trusts and life bonds, you will also be able to advise on structured products.

How do I keep track of Cube investments?

Our investments have a daily price feed to your platform much like ETFs and Funds, so when a client looks at the value of their portfolio, our structured investments will be shown along with all of their other assets.

Do you support Adviser charging?

Adviser charging is supported via your wrap platform.

I don’t recommend structured products because they’re too complex for my clients

It is important that clients understand what investments they hold. We appreciate that some structured investments are very simple, while others have more complicated features. We calculate a complexity rating for each investment so that you can easily see if it is suitable for each clients’ level of understanding and financial sophistication.

Are the offer terms fixed?

Most of the investments we offer will have a 6-week trading period before the strike is set. This will give investors a chance to buy the product at “par” and know that the terms are fixed.

Can Cube’s structured investments be bought and sold every day?

Throughout the 6 week period before the strike is set investors will be able to buy every day. During this period, when an adviser places an order, the transaction takes place that day, and the investor gets a conformation that they have bought the investment straight away.

After the strike date some of the issuers that we work with will continue to allow investors to buy in the secondary market and so take advantage of market opportunities. All of the investments will have a price at which investors can sell their holding every day providing that markets are functioning normally.

Do Cube provide research analysis?

Yes, we provide in-depth analysis on our own investments. In addition, Cube Research offers a new and unique whole of market insight into the structured product sector. Our research allows investors to see what returns they can expect to receive, and the risks they face. Up to now this sort of clear information has been missing. As a result investors have not been able to see what structured products offer and advisers have naturally been reluctant to recommend structured products because they cannot easily justify their selection.

Structured products are too complex for my clients and it is difficult to quantify the risks involved.

An accurate, reliable and transparent measure of the risk and return that an investor can expect is, in our view, one of the keys to allowing investors to appreciate the appeal of structured products. Unless investors know and understand the sort of return that a product offers, and the risks that they face they cannot realistically be expected to make a decision about a product. Similarly advisers need this sort of information to justify a product recommendation.

Advisers need to know that a product is appropriate for the investor’s attitude to risk and their capacity for loss. Without this analysis an adviser is going to struggle to justify their recommendation. On the other hand, armed with this information, advisers can make recommendations with more confidence knowing that they have selected the most appropriate product for the investor, and with the audit trail for their file that documents the selection process.

What does the Research actually do? (link to research doc)

Cube Research offers you a transparent, accurate and reliable way to evaluate and select structured products and investments. Our research enables you to pick the products that match your investment objective and attitude to risk, and to rank them to create a short list of possible investments.

Our evaluation allows you to compare one product with another, and to compare structured products versus other investments like funds and investment trusts. The 2 main outputs we offer on all products that we evaluate are;

Cube Return (Click here); this is the simulated average annualized compound return that the product offers.

Cube Risk (Click here); the simulated volatility of the range of possible annualized returns.

Is Cube research biased towards Cube products?

No not at all. The research process is purely mathematical. Every product and investment is tested in exactly the same way. We don’t apply any judgemental override to the numbers. We use Cube research when we are developing our products to stress test them before they are launched, and we make sure that our products offer an attractive blend of risk/return. We also offer our research to other product providers, so that they can do the same.

How do Cube test products?

Our risk and return measures are based on a model that simulates how markets may behave in the future. Of course none of us know what is going to happen in the months and years to come. There will be periods when the market goes up, and periods when they fall. There will be unexpected events that cause markets to fall significantly, and there may be developments that cause markets to be revalued.

Our testing process is based on the view that over the past 20 years or so we have gone through a wide range of different market scenarios. We have had bull markets, periods of irrational exuberance, military conflicts, financial crises, and periods of relative stability. We use the data that we have or daily returns since the beginning of 1993 to simulate how markets may behave in the future. We use these simulated levels to test each product about 5 million times through good and bad simulations. We are able to observe if products knockout, if coupons are paid, and what the maturity value would be. We then consolidate and evaluate this information to create our risk and return scores.

Does the Research include back testing?

Yes. We also do a back-test for each product. Our back-test for each product also starts at the beginning of 1993. The back-test is the main form of product testing offered by providers. It provides some information, but is not, on its own, a reliable indication about how a product may behave in the future. You should also use the back-test information provided by providers carefully. Each provider will offer different statistics, and their back-test periods may be different. Our back-test data is standardized. You will be able to compare the back-test results to the simulated results.

How do Cube calculate risk? (Click for more details)

All of our products will come with a Cube Risk score. We calculate the volatility of annualized returns that an investor may receive based on our stress test. We can use this volatility value to place the product on the SRRI 1 to 7 risk scale that is mandatory for all funds, or on the popular 1 to 10 scale used by many advisers. The Cube Risk score is updated every week for every product before and after the strike date so allowing investors to keep on top of the investments that they own.

How do Cube calculate return? (Click for more details)

We calculate the expected return from our stress test. This is the average compound annual growth rate. The Cube Return score allows an investor to compare the returns that they may receive with the returns that they may get from other assets.

How often is the Research updated?

We run our analysis every week on every product. The risk and return numbers for products that have not struck will be stable, but for products where the strike has been set, the risk and return numbers will change. The weekly analysis will take into account the value of the product and the level of the underlying assets.

Do Cube include Issuer risk in their Research? (Click for more details)

Yes. When investors buy a structured product they have the risk that the issuer defaults. Our on-line analysis allows you to see the combined market and issuer risk as well as market risk on its own. Our testing process allows us to include the risks that the issuer may default, and to calculate a Cube Risk score that includes this risk.

Do Cube provide training and support for IFA’s? (click for link to team page)

Yes. Please get in touch with your local representative for a demonstration and discussion about how you can incorporate Cube’s Research into your business.

How can an investor buy Cube’s structured investments?

Investors simply instruct their broker or wrap to purchase the product for them. There is no requirement to attach a cheque to the application form, and no requirement for KYC or AML checks. (As this has already been done). The investor and their adviser will get an immediate confirmation that they have invested, so they don’t need to wait to see if they own the investment.

How will an investor be able to see what they have bought?

The investment is held by the wrap or platform and reported alongside all of the other funds and assets that they hold. The investment has a daily price, and will be valued every day as part of their portfolio. There is no need for the investor or adviser to have to consolidate off-wrap assets with the main part of their portfolio held on a wrap.

How can investors that don’t have an account with a wrap or platform access Cube’s investments?

Investors need to open an account with a wrap or broker to be able to buy one of the investments we offer. There are a number of options available

  • We publish a list of on-line brokers (click here) through which an investor can buy Cube investments
  • Advisers can open a wrap account for a client with any of the wraps that offer a dealing facility that is able to buy Cube investments (click here)
  • We have negotiated special terms with James Brearley via their Icon platform for advised clients that want to buy the investments we offer {insert link]

Is bulk dealing available?

Yes. Discretionary managers can use bulk dealing facilities to buy or sell our products for a group of clients at the same time.

Do Cube create bespoke investments?

Yes, we can create bespoke trades for regulated financial advisers, stockbrokers, discretionary managers and family offices. We can create bespoke retail products that can be used by firms that have advisory clients. We can also create professional products for firms that only offer discretionary management. Please contact us to discuss your objectives and we can work with you using our Research capability to analyse the most appropriate solution.

When a product matures, how are funds returned to the client? Is this done automatically or does it require any action?

No instruction is required from the client or adviser as Cube investments redeem automatically within two weeks of the maturity date. Funds are credited to the investors cash account with the relevant platform.

How are advisers/investors notified of potential maturities?

Cube will notify advisers through announcements on their website as well as notifying platforms who we know purchased the investment. We would expect platforms to pass this message onto investors.