Catey is a partner owned firm specialised in primarily on advising private and corporate clients on;
Stock option plans and deferred compensation, where we help our clients in their periodic wealth creation, from grant to vesting to exercise and investing the proceeds.
Compliance based asset management where our clients are subject to supervision and reporting of their personal investments. We help our clients comply with an ever-increasing regulatory scrutiny of potential inside information and market abuse risks.
Consulting, audit firms, bankers and listed companies with officers considered insiders have one thing in common. They implement policies and restrictions on how its executives and staff can benefit economically from financial investments.
The difficulty is that no organisation, regardless of its compliance efforts and size can eliminate the risk of insider trading. We must understand that they are very real, and come with the potential for significant regulatory consequences – none of them good.
Making sure your staff and executives are not in breach of compliance must be at the top of the agenda of any risk manager. From experience, we know this can be difficult and cumbersome. Catey implements solutions to make this easier and scalable by creating portfolios with a set of entities / unrestricted holdings are made available for employees to investment in.
We make sure your staff’s investments are compliant according to your rules and regulations at all times. This is achieved by maintaining a direct line of communication with your compliance department. We report holdings and take the necessary steps should any investment become restricted. We make sure trading windows are respected and executives hold a minimum amount of company shares at all times, as required by corporate policy.
An agreement between your company and Catey, defines the rules and time frames for reporting in accordance to your compliance restrictions. Each participating employee agrees that Catey can, within a stipulated time frame, divest any investment that becomes restricted.
It is common for many U.S. based companies to include non-U.S. employees in its equity based compensation plans. What is less known is that by doing so, the company could expose them to U.S. estate/inheritance taxes.
In this context, ignoring the U.S. inheritance tax risks would go against company values by leaving its employees vulnerable and exposed.
Loss of significant wealth for employees and their families
We offer a proven education process that informs on the risks and obligations associated with holding U.S. based (situs) assets. Employees sign off acknowledgment and participation confirming that:
In the last few years the regulatory environment for international executives working for U.S. companies has become increasingly complex. The U.S. in particular is increasing its reach by imposing its tax laws beyond its borders.
In this context, the most challenging is the U.S. inheritance taxes. Anyone who holds assets from a U.S. company (such as shares and options) is exposed to U.S. inheritance taxes, regardless of nationality and domicile.
In case of death, all accounts and assets based in the U.S. will be blocked and not released before completing the IRS filings.
There is an important distinction to how these taxes are applied for non-U.S. persons. Where a U.S. taxpayer currently enjoys a tax free amount of more than USD 5 million, a non-U.S. taxpayer will only have USD 60,000.
Contrary to common knowledge it is not only real estate that is considered when estate taxes are applied. All of the below and more are at risk:
Most of our executive clients have the following wealth characteristics at the start of the relationship, they are invested in:
If you are an auditor, an officer or for any other reason considered an insider, restrictions will apply to your possibility to hold economic interest in your own company and external companies who are clients.
Our clients are corporate executives, employees and partners of companies that require restrictions on their private investments.
We create a pre-approved list of investments that partners, staff and their immediate family members may invest in through the advisor.
This is to create a safe harbour of investments to make sure we decrease the risk of regulatory breaches.
As a client of Catey, we make sure your portfolio is compliant according to your company’s investment rules and regulations at all times. This is achieved by maintaining a direct line of communication with your employer’s compliance department. We report your holdings and take the necessary steps should any investment become restricted.
Your advantage: Once your risk profile and possible investment restrictions are established, we create your portfolio in line with our market expectations and tuned to your personal strategy. We provide you with a monthly report of your account and performance of your assets which you can view at any time via our online services. Finally, we do the compliance reporting on your behalf, so you can focus on your work.
Catey chose to work with Interactive Brokers (IB) after extensive due diligence. Some of the key points and advantages for our clients are:
Catey offers three fee schedules, aligning our objectives with those of our clients:
which includes all bank, management, transaction and custody costs, with a incentive bonus of 12% of net profits to Catey Group
which includes all bank, management, transaction and custody costs, with a incentive bonus of 20% of net profits to Catey Group
which includes all bank, management, transaction and custody costs, with a incentive bonus of 30% of net profits to Catey Group
With us it does not matter how many trades you make or how many times your strategy has to be adjusted.
Catey’s incentive bonus is calculated using the highest watermark principle. This means that the client’s assets need to be at a higher level than any previous quarter in order to generate an incentive bonus. Any assets in and out of the client’s account is adjusted for. The watermark is perpetual and never resets.