All aspects of compliance and KYC in a club deal process
Can I use my IRA or Pension Plan to invest in a club deal?
Investing in a club deal via a Pension Plan depends on your jurisdiction.
What protections exist against sponsor fraud or misappropriation?
Protections against sponsor fraud can be as simple as Dual Authorization and Audits.
What tax reporting should I expect (K-1s, etc.)?
Club deals are typically pass-through entities and you pay tax on your personal return.
How are conflicts of interest managed in a club deal?
Conflicts of interest in a club deal are managed through transparent procedures, Board and Advisory Committee.
What happens if a sponsor is not a registered Broker-Dealer?
Independent sponsors often rely on the "issuer exemption" to raise capital, but they cannot receive "transaction-based compensation".
Does a club deal sponsor take custody of my assets?
A club deal sponsor manages the asset, but does NOT take custody of securities & cash.
What is AML (Anti-Money Laundering) and how does it affect me?
Anti-Money Laundering (AML) regulations require sponsors to ensure investment funds don't come from criminal activities.
What is KYC (Know Your Customer) and why do sponsors ask for my passport?
KYC is a mandatory legal process to prevent fraud and identity theft.
Do I need to be an “Accredited Investor” or “Qualified Purchaser” to participate in club deals?
To participate in club deals, you almost always need to be qualified as a sophisticated investor.
