Manager compliance policy

1. How this rulebook works

1.1 Oval runs automated checks on every strategy on the platform. This document states what those checks measure, where the lines are, and what happens when a strategy crosses one. Nothing here is discretionary or secret. Every rule has a number. The rules Oval monitors while your strategy runs, listed in section 7.3, also carry a short name, and the two are written together as 7.3.3 In-mandate floor. A notice about one of those rules cites both; a notice about a declaration gate in section 5, or about a severe condition under rule 7.7, cites the number. Either way the rule it cites is written here. The names are authored in this document and nowhere else: every notice, email, and screen copies them exactly as they appear here. A declaration gate that guards a monitored rule is given that rule’s name as well, so you meet the same words at declaration and while running, and rules 5.1 and 5.2 are the two limbs of one such rule, monitored as 7.3.1(a) and 7.3.1(b).

1.2 Five principles govern everything in this document.

• Oval never blocks a trade. No check cancels an order, rejects a rebalance, or stops you from trading, ever.
• Oval does block a claim. A declaration your holdings do not support is rejected at the moment you make it. You may hold anything; you may not say anything.
• You are told before, not after. A trade that changes your declaration, or that opens a condition against you, shows you the consequence before you confirm it.
• Deliberate changes take effect immediately. Drift gets time. If you chose it, it happens now. If the market did it to you, you get a stated period to fix it.
• No automated system stops your trading or touches anyone’s money. Automated actions correct labels and marketplace visibility. Pausing a strategy, suspending a manager, and closing a strategy are decisions made by our compliance team, in writing.

1.3 Your strategy is never judged against the market or against other managers. It is judged against what you declared it to be. If you declare nothing about your sectors, no sector rule applies to you.

1.4 Where a rule follows an external standard, this document says which one. Where a number is Oval’s own judgment, it says that too, and section 17 explains the reasoning. We would rather you know which is which.

2. Definitions and measurement

2.1 Sectors. Oval classifies holdings using a sector vocabulary derived from GICS, the Global Industry Classification Standard maintained by MSCI and S&P Dow Jones Indices and used across the investment industry.¹ Individual stocks are classified from our market data provider. Funds are decomposed into their published sector weights, so a fund position counts fractionally toward each sector it actually holds; this look-through method is the institutional standard for fund analysis. Classification corrections apply platform-wide to every strategy holding the security, never to one strategy alone.

2.2 Industries. An additional sector may be declared at industry level (for example Consumer Electronics inside Technology). Industry membership is measured on individual stocks only, because fund publishers report sector weights, not industry weights. Fund holdings can therefore never support an industry claim.

2.3 Holdings we cannot classify. Any holding, or fraction of a fund, that our classification sources cannot place in a sector counts as unclassifiable. Unclassifiable weight always counts against a claim and never for one. This is deliberate: a book we cannot see into cannot satisfy a claim about what it holds.

Unclassifiable weight is partly a measure of Oval’s data coverage rather than of your conduct. With fund look-through in place, a normal book reads well under 1%. Anything materially above that usually means a fund we could not decompose, which is our problem before it is yours, and rule 7.3.5 Unclassifiable limit is written accordingly.

2.4 The two measurement bases. Different rules use different denominators, and each rule below names which one it uses.

• Whole portfolio. Everything, cash included. Used for 7.3.1 Sector minimum (rules 5.1 and 5.2 at declaration), 7.3.2 Primary sector rank (5.3), 7.3.7 Undeclared sectors (5.8), and 7.3.5 Unclassifiable limit, because a portfolio that is mostly cash is not what its sector label claims, however its invested sliver is arranged. This matches how the fund world measures name-based commitments.²
• Invested holdings. Your positions, cash excluded. Used for 7.3.3 In-mandate floor (5.7), 7.3.4 Concentration cap (5.4), and the holdings read in rule 8.6, which ask a different question: of the investments you actually made, are they where you said they would be? Cash is not a bet on any sector, and excluding it also means a concentrated book can never hide behind a cash pile.

2.5 Daily values. Oval records one value per strategy per trading day, after market close. All performance, risk measurement, and monitoring run on these daily values. There is no intraday measurement, by design: inputs change once per day, and intraday measurement would flag noise.

2.6 Checks, confirmation, notices, and windows.

• A check runs automatically after the close of every trading day. Every count in this document is a count of checks, never of elapsed days. A day on which Oval fails to run a check is not counted at all: it can delay a count, but it can never advance one and never resets one. Rule 7.9 states this in full.
• A condition is confirmed when it has appeared on enough consecutive checks. For every rule except risk, that is 3 consecutive checks: 1 bad reading is noise, 3 is a fact. The risk rule takes 21 consecutive checks, for the reason rule 8.3 gives. Severe conditions (rule 7.7) are confirmed on a single check. A condition caused by a deliberate trade is confirmed immediately, per rule 6.3. The table in rule 7.3 states the period for each rule.
• When a condition is confirmed you receive a notice naming the rule, stating what is wrong, stating your deadline as a calendar date, and stating exactly what happens on that date if the condition is still open.
• The resolution window starts on the day of the notice, not the day the condition first appeared, and is counted in calendar days. Rule 7.9 states how the clock runs.
• A window closes early only when the condition stays resolved for 10 consecutive checks. A single clean check does not reset anything. 10 consecutive days is the standard major exchanges use to recognize regained compliance,³ and it means a fix has to be a fix, not a one-day visit.
• You are told when a condition resolves, and told which rule it was and which remedy closed it. Every other change of state in this document generates a message; the end of one should too.
• A window is held open when your holdings are inside the rule on your deadline date but the 10 checks are not yet complete. Rule 7.9 states how. You are never relabeled for fixing a condition late but genuinely.

2.7 Strategy states. A strategy is in exactly one of four states.

An unlisted strategy’s page remains reachable by direct link but does not accept new investment and does not state why.

2.8 Investors and followers. An investor holds money (or, pre-launch, pledged capital) in a strategy. A follower has chosen to track a strategy or a manager without investing. Communication rules for each are in section 14.

2.9 The three mandate types. Every strategy is exactly one of these, and the type decides which rules apply to it.

Rule 7.3.5 Unclassifiable limit applies to all three, because it is not about a claim you made. It is about whether Oval can show investors what you hold.

A strategy with no sector focus declares no sectors at all, not even a partial focus. A partial focus is still a claim, and a claim carries the whole rule set behind it. If you want a sector on your strategy’s page and in investor search, declare it and meet the standard for it. If you do not, describe your approach in your pitch, where you have far more room than a label gives you. Either way your full sector composition is published to investors, because it always is.

Choosing no sector focus is not a lesser status. It is what the fund world does for strategies whose names promise no particular focus,⁴ and it is the honest home for a rotating or opportunistic book. You may move between mandate types at any time by editing your declaration, subject to the gate in section 5.

2.10 Days. Three different units appear in this document and they are not interchangeable.

• Trading day. A day the US market is open. One daily value is recorded per trading day, and one check runs after each. Counts of checks are not the same as counts of trading days during an outage, and rule 2.6 governs which is operative.
• Business day. A weekday that is not a US public holiday. Used for our own response commitments in sections 10 and 13.
• Calendar day. Every day, weekends and holidays included. Used for every resolution window and every deadline date.

2.11 Percentages and percentage points. A percentage is a share of a whole: “25% of your whole portfolio.” A percentage point is the gap between two percentages: a sector at 32% is 7 percentage points above a sector at 25%. The two are not the same, and this document never uses one for the other.

2.12 Terms used throughout.

• Declaration. Everything you assert about a strategy under section 4: its mandate type, any sectors, its risk category, its style, its fee and terms.
• Condition. A rule that a strategy is currently failing, once confirmed. Before confirmation it is a reading, not a condition.
• Notice. The message sent when a condition confirms, naming the rule, the problem, the deadline date, and the deadline outcome.
• Automatic correction. A change Oval makes to your declaration at a deadline, under rule 10.2, without a reviewer.
• Withdrawn. A condition that should never have been raised, because it rested on data Oval has since corrected. Distinct from resolved, which means you fixed something. Rule 10.7 governs.
• Good standing. Every condition on the strategy is resolved. Rule 7.4 explains how multiple conditions interact.

3. Before you manage

3.1 Identity. Every manager verifies their legal identity before managing on Oval, through our identity verification provider. Oval retains what regulation requires and no more.

3.2 Disclosures and background check. Before managing, you answer a disclosure questionnaire covering regulatory actions, criminal history, and financial events, in the same categories the securities industry uses for registered persons, and you consent to a background check. Answering yes to a disclosure question does not automatically bar you; a false answer does.

3.3 The agreement. You sign a licensing agreement before your first strategy publishes. This policy is incorporated into that agreement by reference, which is what makes the rules in it binding rather than advisory.

3.4 Keeping your disclosures current. Your disclosure answers are continuing statements, not a one-time form. If an answer changes, a new regulatory action, a criminal charge or conviction, a bankruptcy, you must update it within 30 days, the same amendment standard registered securities professionals work under.⁵ A disclosure answer that Oval discovers to have gone stale is treated the same way as a false answer at onboarding.

3.5 Where you manage from. You do not need to be a United States resident to manage on Oval. Managers everywhere complete the same identity verification, disclosures, and background check under rules 3.1 and 3.2. Oval does not onboard managers who are subject to United States sanctions or who reside in a jurisdiction under comprehensive United States sanctions. If you are outside the United States, you must provide the tax documentation United States law requires, generally IRS Form W-8BEN or W-8BEN-E, before you receive any compensation. United States withholding tax may apply to that compensation, and where it applies, Oval deducts and remits it as the law requires. While you receive no compensation, no United States tax documentation is needed.

4. What you declare

4.1 When you publish a strategy you declare what it is:

• A mandate type: Sector focus, Diversified, or no sector focus (rule 2.9).
• If Sector focus, one primary sector and up to 2 additional sectors, each declared at sector or industry level.
• A risk category: Conservative, Moderate, Aggressive, or Speculative.
• Optionally, a style: one primary and at most one additional, from the list in rule 4.2.
• Your fee and terms.

These declarations are the standard every check measures against. A Diversified strategy, and a strategy with no sector focus, both declare no sectors.

4.2 Styles. Style is optional. If you declare one, this is what it means on Oval:

• Growth. The portfolio emphasizes companies with above-market revenue and earnings growth, typically at above-market valuations.
• Value. The portfolio emphasizes companies trading at below-market valuations relative to earnings, book value, and cash flow.
• Income. The portfolio emphasizes holdings selected for dividend yield.
• Quality. The portfolio emphasizes companies with high returns on equity, low leverage, and stable earnings.
• Momentum. The portfolio emphasizes holdings with strong trailing price performance.
• Multi-asset. The portfolio holds meaningful exposure to asset classes beyond equities, through funds such as bond, commodity, or real-estate funds. Holding equity funds alongside stocks is not multi-asset.

Style is self-declared and is available on any mandate type. Where Oval can measure your holdings’ characteristics against your declared style, your strategy page shows whether the holdings support it; where it cannot (young strategies, fund-heavy books), the page marks the style as self-declared. The verdict is information for investors, nothing more: style carries no penalties, no windows, and no enforcement (rule 7.8).

5. Rules checked when you publish or edit

These run when you publish a strategy and when you change its declaration. They block the action rather than flag it, and the error tells you which rule and by how much. Rules 5.1, 5.2, 5.3, 5.7 and 5.8 apply to a Sector focus strategy; 5.4 applies to a Diversified strategy; 5.5 and 5.6 apply to all three. A strategy with no sector focus is checked only by 5.5 and 5.6.

5.1 Sector minimum. Your primary sector must hold at least 25% of your whole portfolio.

5.2 Sector minimum. Each additional sector must hold at least 15% of your whole portfolio.

5.3 Primary sector rank. Your primary sector must be your largest, or within 7.5 percentage points of your largest. If your book is 45% healthcare and 30% technology, you cannot declare technology as primary.

5.4 Concentration cap. A Diversified strategy must keep its largest sector at or under 25% of invested holdings. This is one line, at declaration and while running, with no drift buffer. At exactly 25% both a Diversified label and a Sector focus label are legal and you choose; an automatic correction at exactly 25% always produces a Sector focus strategy, because rule 5.1 is satisfied.

5.5 Measured risk. Your declared risk category cannot be safer than your holdings read. Oval computes a category from how concentrated the portfolio is and whether it holds leveraged or inverse funds, by the method set out in rule 8.6. You may declare that category or a riskier one, never a safer one. Declaring higher risk than measured is always allowed, because overstating risk does not mislead an investor about what they are buying.

5.6 A declared style must come from the list in rule 4.2: one primary, at most one additional.

5.7 In-mandate floor. At least 80% of your invested holdings must sit inside your declared sectors. The same figure applies whether you declare one sector, two, or three.

5.8 Undeclared sectors. No sector you have not declared may be larger than the smallest sector you have declared, measured on your whole portfolio. Your declared sectors have to be your largest sectors. This is rule 5.3 applied to the whole declared set rather than only to the primary, and it exists so that naming three medium sectors cannot be used to leave two larger ones unmentioned.

6. Rebalances: you are told before you confirm

6.1 When you submit a rebalance, Oval evaluates the target weights you submitted and shows you, before you confirm, every consequence the trade has for your declaration. Nothing is blocked.

6.2 The consequences and what the review screen tells you:

6.3 Deliberate trades confirm immediately. A condition caused by a rebalance you confirmed does not wait for 3 consecutive checks. You were shown it before you confirmed, so it is confirmed the same day. Where an honest label exists, your declaration is corrected the same day. Where the only rule you broke has no automatic correction, the window opens that day rather than 3 nights later.

6.4 A resolution window protects you from drift, not from trading. Any rebalance is judged on its own terms exactly as if no window were open. A rebalance may not deepen an open condition. A trade that worsens a condition you were already given time to fix is a deliberate choice of that condition: where the rule has an automatic correction, it applies that day, and where it does not, the strategy is unlisted that day under rule 10.3. This mirrors the fund world’s requirement that a fund out of compliance invest only in ways that bring it back.²

7. Portfolio rules monitored while your strategy runs

These run automatically each weekday evening. They never block anything. Each names its measurement basis from rule 2.4 and applies only to the mandate types listed in rule 2.9.

7.1 How a condition becomes a deadline. Your strategy page shows the condition the first evening it appears. Once it has appeared on enough consecutive checks to be confirmed, you receive a notice with a calendar deadline per rule 2.6, and your strategy page then shows the days remaining every day until the condition is resolved or the deadline arrives. Confirmation takes 3 consecutive checks for every rule except the risk rule, which takes 21 consecutive checks for the reason given in rule 8.3, and severe conditions, which are confirmed on the first check. Until a condition is confirmed, your page shows how many consecutive checks it has appeared on, so nothing arrives without warning. Where confirmation takes longer than a week, you also receive a heads-up partway through, so a formal notice is never the first you hear of it. Today that applies only to the risk rule, and rule 8.3 gives its timing.

7.2 What resolves a condition, and how fast. There are two remedies and they do not work at the same speed. Trading works slowly: bringing the portfolio back inside the rule resolves the condition only once it has stayed inside for 10 consecutive checks. Updating your declaration works immediately: it takes effect the same day, requires no trade, and is available for every sector rule, because the no-sector-focus mandate type in rule 2.9 always exists and always resolves a sector condition. For the risk rule, updating the declaration is the only remedy that acts at all, and rule 8.7 explains why.

Because trading is the slow remedy, a fix made late in your window cannot finish its 10 checks before the deadline. Rule 7.9 holds the deadline open in that case, so a genuine late fix is never punished by arithmetic.

7.3 The rules and their windows.

What happens at each deadline is stated in rule 10.1, and every notice states it too.

Being 1 category above your declared category opens condition 7.3.6 Measured risk. Being 2 or more above is severe under rule 7.7 and is acted on the same day. Running below your declared category is never a breach (rule 8.4).

The window lengths reflect how each condition is fixed. Rules about which sectors you hold and how much of them move slowly, and buying back in takes real trades, so they get 60 days. The whole-book rules and risk have one-click resolutions available, so they get 30. The regulatory outer limit for the comparable condition in the fund world is 90 days;² Oval’s windows are deliberately shorter, and section 17 explains why.

Rule 7.3.6 Measured risk is the one window that is not time to trade your way back. Measured risk cannot be corrected by trading inside a 30-day window, so that window is time for you to decide whether to raise your declared category yourself, or to dispute the measurement, before Oval raises it for you at the deadline. Rule 8.7 says this in full, and no Oval screen will ever count down to a risk deadline as though a trade could stop it.

7.4 Multiple conditions. You are in good standing only when every open condition is resolved. Each condition runs its own clock to its own deadline and produces its own outcome on its own date; a later condition never extends an earlier one, and resolving one never postpones another. Confirmed conditions open under 3 or more different rules is itself a severe condition under rule 7.7. Conditions are counted by rule, not by instance: 3 declared sectors each sitting below their minimum is 1 rule broken 3 times, not 3 rules broken.

7.5 Corrections stop the clock, and so do our own investigations. If you believe a check got the data wrong, file a correction request (section 13). The clock stops on the day you file and resumes on the day we answer, with the same number of days remaining as when it stopped, and you receive a new deadline date. One request per condition.

Confirmation is suspended, and any running clock stops, when Oval opens its own investigation into data a condition depends on, with no filing required from you and without using up your one request. Rule 13.2 states which of the two applies. We will not run a deadline against you while we are investigating whether our own data caused the condition. You are told when such an investigation opens, and told the result either way.

7.6 Transient conditions. Confirmation exists because portfolios move for reasons managers do not choose. A dividend arrives as cash and redeploys at your next rebalance. One holding runs and briefly pushes a sector over a line. A data provider drops coverage of a symbol you own. A volatile fortnight in the market lifts every strategy’s measured risk at once. None of these should generate a compliance matter, and confirmation ensures they do not. The risk rule needs a longer confirmation than the others because its measurement moves with the market rather than with your conduct, which rule 8.3 explains.

7.7 Severe conditions. Six conditions skip confirmation and skip the window entirely. Each is confirmed on a single check, and the consequence applies the same day, because each represents a present fact investors are actively wrong about, and every one of them has an immediate resolution that requires no trading:

• At least 2 sectors are strictly larger than your primary sector. Your declaration is corrected that day under rule 10.2. The test is deliberately worded as strictly larger, so a tie for second place never triggers it: where the holdings do not clearly separate two sectors from your primary, nothing is rewritten.
• One sector exceeds your primary sector by more than 15 percentage points. Your declaration is corrected that day under rule 10.2. Rule 7.3.2 Primary sector rank tolerates a gap of 7.5 points and gives 60 days to close it; double that tolerance is not drift.
• A Diversified strategy’s largest sector reaches 40% of invested holdings. Your strategy is reclassified that day under rule 10.2. At 40%, one sector is roughly 6 times the average weight of every other sector in the book, and no reading of “diversified” survives that. This is Oval’s own number under rule 1.4.
• Your measured risk is 2 or more categories above your declared category. Your declared category is raised that day to the measured one. This is the one risk consequence that does not wait for the 21-day confirmation of rule 8.3, because a 2-category gap is far too large to be measurement noise, and because the consequence is a label change you can reverse under rule 8.5 once the reading returns to your band.
• More than 30% of your portfolio is unclassifiable. Your strategy is unlisted that day. Below this line, unclassifiable holdings get the 30-day window of rule 7.3.5 Unclassifiable limit. Above it, we cannot show investors what you hold at all, so the listing cannot stay up while it is investigated.
• Confirmed conditions are open under 3 or more different rules. Your strategy is unlisted that day and enters review under rule 10.4. A book breaking 3 different rules at once is not drifting. Counted by rule per rule 7.4, so 1 rule broken in 3 places does not reach this line.

In each case your investors and followers are notified the same day through the normal declaration-change notice. There is no waiting period on severe conditions: the notice and the consequence arrive together.

Circuit breaker. The unclassifiable severe test measures Oval’s data coverage as much as your holdings, so a provider outage could cross it for many strategies on the same night. If an unusual share of the platform crosses that line on a single check, the severe tier suspends itself, an incident is opened, and no strategy is unlisted on that signal until a person has reviewed it. We will not act on a fleet-wide reading that is far more likely to be our failure than yours.

7.8 Style. Style is monitored for display only. Where measurable, your page shows whether your holdings support your declared style, which is information for investors, not a compliance instrument. A persistent mismatch prompts a private suggestion to adjust the declaration. Style never opens a window, never relabels automatically, and never affects your strategy’s state, because sector rests on an external industry standard and risk on arithmetic, while style definitions are Oval’s own.

7.9 How clocks run. Seven rules, so that a deadline date is never ambiguous.

• Windows are calendar days from the date of your notice. Weekends and holidays count. Confirmation periods and resolution streaks are counted in checks, per rule 2.6, but the window that follows is calendar time.
• A deadline is held open by a fix that has not finished proving itself. If your holdings are inside the rule on your deadline date but the 10-check streak in rule 7.2 is not yet complete, the deadline is held while the streak runs. If the streak completes, the condition is resolved and nothing happens. If the streak breaks, the deadline outcome in rule 10.1 applies that day. The hold happens once per condition, so a portfolio oscillating across the line cannot extend a deadline indefinitely. This rule cannot apply to condition 7.3.6, which has no holdings remedy at all.
• A correction request stops the clock and does not shorten it. The days remaining when you file are the days remaining when we answer, and you receive a new deadline date on the day we answer (rule 7.5).
• An investigation Oval opens itself suspends the rule, with nothing required from you. Before confirmation it suspends the count, so no notice is sent; after confirmation it stops the clock (rules 7.5 and 13.2).
• Clocks and confirmation counters are both suspended while a strategy is Paused, because a paused strategy cannot trade and most conditions are resolved by trading. Both resume where they stopped on the day the strategy resumes.
• Being unlisted does not resolve anything. An unlisted strategy’s open conditions keep running to their deadlines, and their outcomes still apply. Unlisting removes the strategy from the marketplace; it is not a substitute for fixing the condition.
• A check Oval fails to run neither advances a clock’s confirmation count nor resets it. An outage on our side can delay a confirmation but can never shorten it.

8. Risk rules

8.1 Oval measures two things from your strategy’s daily values: annualized volatility and maximum drawdown.

Each band includes its lower bound and excludes its upper, so a reading of exactly 20% volatility is Aggressive, not Moderate.

Your measured risk category is the higher of the two readings. Everywhere this document refers to your measured risk, it means that combined category, never either measure on its own. This document uses “measured” throughout; it does not use “realized” or “actual” for the same thing.

8.2 Minimum history. No risk verdict is shown or acted on until a strategy has 63 daily values, 3 months of trading days (markets price roughly 21 sessions a month). Before that your page shows the measured figures, how many daily values you still need, and no category verdict. 3 months is deliberately shorter than the 3-year minimum fund rating services such as Morningstar require before rating a fund.⁶ Their job is comparing established funds across market cycles; this check’s job is verifying that a young strategy’s measured risk matches what its manager declared, and it must start early enough to matter while a track record is still forming. Because a young measurement is less certain, the check never acts on a single reading; rule 8.3 sets how long a reading has to persist.

8.3 Above your category. If your measured risk category sits 1 category above your declared category on 21 consecutive checks, roughly one month of trading, that is condition 7.3.6 Measured risk, and its 30-day window begins at your notice. A single reading back inside your band resets the count to zero. A check Oval fails to run neither counts toward the 21 nor resets it, so an outage on our side can delay your confirmation but can never shorten it: we will not act on 21 days’ worth of calendar with fewer than 21 readings behind it. At the halfway mark, 11 checks, you receive a heads-up through the normal notification channel: it names the rule and the count, carries no deadline and no clock, and exists so that a formal notice is never a surprise. 2 or more categories above is severe (rule 7.7) and your category is raised at once.

21 checks is a long count because a shorter one would prove nothing. Each reading is taken from the last 63 daily values, so tonight’s reading and last night’s are drawn from windows that share 62 of their 63 days. Counting 3 consecutive readings is very close to counting the same measurement 3 times, which is why persistence here is measured in readings that actually happened rather than in days that merely passed: a count of checks cannot be satisfied by a calendar. 21 checks is the reading count one month of market activity produces, the same unit the 63-day measurement window is built from: markets trade roughly 21 sessions a month and 63 sessions a quarter. It is a third of the way through the measurement window, so by the time a condition confirms, a meaningful amount of genuinely new information has accumulated. The comparable published regimes, the European risk indicators carried on retail fund disclosure documents, count reference points rather than elapsed time in the same way: they require a fund’s volatility to sit outside its published bucket at every weekly or monthly reference point across the preceding 4 months before the fund is reclassified.⁷ Oval’s count spans less absolute time and more of its own measurement window, and both differences are deliberate. Less time, because those regimes measure 5 years of history for established funds while this check measures 3 months of history for young strategies, and a label left wrong for 4 months here is wrong for most of the strategy’s life. More of the window, because 4 months is about a fifteenth of a 5-year window, while 21 checks span a third of a 63-day one, so by the time an Oval condition confirms, proportionally more of the underlying measurement has been replaced by new information than those regimes require.

8.4 Below your category. Running less risk than you declared is never a breach and never escalates. Your page shows measured risk against declared, including when measured sits below, so investors always see the truth. If measured risk sits 2 or more categories below your declared category across 21 consecutive checks, the same period rule 8.3 uses, you receive a suggestion, through the normal notification channel, to lower your declaration. It is optional, because your declared category states your intent, and market calm is not a change of intent. No suggestion is sent where the holdings floor in rule 8.6 already sits at your declared category, because there would be nothing to suggest.

8.5 At the deadline. If condition 7.3.6 Measured risk reaches its deadline unresolved, your declared category is raised and your investors and followers are notified.

The period is every reading taken from the day the condition first appeared to the deadline date inclusive, which is the 21 confirmation checks plus the checks taken during the window. The category you are raised to is the one your readings matched most often across that period, not the one from the most recent reading, so a single extreme day never sets your label. If 2 categories appear equally often, the more recent one is used. Readings on days Oval failed to run a check do not exist and are not counted. Readings taken while the clock was stopped under rule 7.5 do count: they are real measurements, and a dispute about one input is no reason to discard the rest.

You may lower your declaration again once measured risk returns to the lower band and stays there per rule 7.2, so long as the holdings floor in rule 8.6 permits that category.

8.6 Your holdings read, and the floor it sets. Before a strategy has any history, there is nothing to measure, so Oval reads a risk category off the holdings themselves. Two signals, and your holdings read is whichever of the two is higher.

Concentration. A score is built from three things: how spread out your weights are, measured as the sum of each weight squared, which counts for half the score; the share held in your single largest position, which counts for three tenths; and a penalty for holding only a few names, which counts for the remaining fifth. A score under 0.15 reads Conservative, 0.15 up to 0.30 reads Moderate, 0.30 up to 0.55 reads Aggressive, and 0.55 and above reads Speculative.

Leveraged and inverse funds. Holding any leveraged or inverse fund at all means your holdings read at least Moderate, because these are instruments built to be held for a single day and a Conservative label does not describe a book that holds them. At 10% or more of your invested holdings, your read is at least Aggressive. At 20% or more, it is Speculative. The reasoning is exposure: a fund leveraged at 3 times moves your effective market exposure by twice whatever you hold in it, so 10% of the book carries roughly a fifth more exposure than the book alone, and 20% carries roughly two fifths more. This signal applies to funds only and never to individual stocks, so a company whose name resembles a leveraged or inverse fund cannot trigger it. Leveraged and inverse funds are treated alike, which is deliberately blunt: a small inverse position can lower a long book’s risk rather than raise it, and your measured risk will show that once you have 63 daily values.

Which sector you hold is not yet an input. Sector composition is planned as a third signal, because sectors differ in how much they move, and section 19 governs the notice you receive before it takes effect. Until then, concentration and leveraged-and-inverse exposure are the only inputs. Your strategy page shows which signal produced your read and in plain words why, so the number is never unexplained.

Your holdings read sets a minimum for what you may declare, and it never sets your category by itself. You may always declare higher.

Once you have 63 daily values, measured risk governs your category, because what a strategy actually did is stronger evidence than what its holdings suggested it might do. Your holdings read does not go away, though. It stays on as a floor. A book built on leveraged or inverse funds, or concentrated in a few positions, can measure calm for a quarter and still carry risk that has not yet shown up in the numbers, and a category set by a quiet stretch alone would understate it. So your declared category may never sit below your holdings read, however calm the measurement is. The comparable European regime takes the same view, allowing a product’s published risk indicator to be raised above its calculated level where the calculation does not adequately represent the risk.⁸

The suggestion in rule 8.4 to lower your declaration is subject to the same floor: Oval will not suggest a category your holdings read does not support.

8.7 What trading can and cannot change. Your measured risk is taken from your last 63 daily values, which means it responds to trading slowly and only in part. Trading more calmly from today lowers your measured volatility gradually, as the more volatile days age out of the window. A drawdown that has already happened cannot be undone by any trade at all; it leaves the measurement only when it ages out. So a risk condition is not something you can trade your way out of before its deadline, and Oval will not ask you to try or show you a countdown that suggests you can. The remedy that works immediately is your declaration: raising your declared category to match what your strategy is actually doing is always available, takes effect the same day, and closes the condition. If you believe the measurement itself is wrong, file a correction request under section 13, which stops the clock while we answer. Nothing in this rule restricts how you invest. Oval never requires you to reduce risk; it requires only that your published category tells investors the truth.

9. Valuation integrity

9.1 Oval checks each daily value against the previous day’s and against the custodian’s record of the account. A value that fails to reconcile is corrected at the source. Values are never deleted or overwritten: a correction is recorded alongside the original, permanently. The same applies to compliance readings: where a correction changes data a check relied on, the recomputed readings are recorded alongside the originals and never in place of them (rule 10.6).

9.2 While a valuation is under review, your strategy’s public performance may be withheld and your page says so. This protects you as much as investors: a bad price print should not enter your track record.

9.3 Valuation problems carry no manager deadline, because fixing them is Oval’s job, not yours. If a correction changes performance figures investors have already seen, your investors are notified of the restatement (section 14).

10. When a deadline passes

10.1 What happens at each deadline. Every rule states its own outcome. Nothing here is discretionary, and your notice states the outcome for your rule on the day the notice is sent.

One principle governs every automatic correction: your declaration is reduced to what your holdings support. Oval never adds a sector you did not declare. Where a Sector focus declaration is no longer supportable, the strategy becomes Diversified if it qualifies under rule 5.4, and it has no sector focus if it does not. No sector focus is always available, so there is always an honest label.

“Still open” means the condition has not been resolved under rule 7.2 and no clock rule in 7.9 is holding the deadline. A deadline held open by a late fix, stopped by a correction request, stopped by an investigation of ours, or suspended by a pause produces no outcome on its original date. The outcome applies on the day the hold ends, if the condition is still open then.

10.2 The standard outcome: the label is corrected. For every rule except 7.3.5 Unclassifiable limit the remedy is automatic and proportionate: your declaration is corrected to match what the strategy actually holds. Your investors and followers are notified, the strategy stays listed under its corrected label, and trading is never interrupted. No reviewer is involved, because nothing is in dispute: the holdings are the holdings. This mirrors the fund world’s terminal remedy, where a fund that cannot support its name within the cure period must change its name.²

An automatic correction is never a finding of misconduct. Most are the market’s doing. What Oval will not allow is a label that has stopped being true.

10.3 When the strategy is unlisted. A strategy is unlisted, per the state table in rule 2.7, only in these cases:

• Unclassifiable holdings above 15% at the deadline of rule 7.3.5 Unclassifiable limit, or above 30% at any time (rule 7.7). This is the one sector-side case with no automatic correction, because the problem is not a wrong label: it is that we cannot show investors what you hold.
• A rebalance that deepens an open condition with no automatic correction (rule 6.4).
• A second automatic correction on the same strategy within 6 months, counting corrections under rule 10.2 that follow a deadline. Repeated forced corrections mean the declarations are not being maintained.
• 3 or more confirmed conditions open at once (rule 7.7).
• An unresolved valuation-integrity question where Oval cannot stand behind the published numbers.

Same-day corrections under rule 7.7 do not count toward the 6-month trigger above, because a severe reading can be caused by a market move no manager chose. They do count toward the account review in rule 12.4, where a person looks at the pattern rather than a machine acting on it.

Existing investors keep their positions and their money, and the strategy keeps trading. Investors and followers are notified of the change in standing. The public page states only that the strategy is not accepting new investors.

10.4 The review. When a strategy is unlisted under rule 10.3, our compliance team examines it and sends you written instructions within 1 business day stating exactly what is wrong and what fixing it requires. You then have 5 business days.

• Fixed within 5 business days: the strategy returns to Listed.
• Not fixed: the strategy is Paused by our compliance team, with a written reason. That reason states that closure is one of the three possible outcomes of the review that follows. Your investors and followers are told the same thing at the same time; rule 14.1 carries that disclosure and states why it is an exception to the rest of section 14.

Where the cause is an unclassifiable reading, the review includes our own investigation of whether the data is at fault, and you are told the result either way.

10.5 After a pause. A strategy Paused under rule 10.4 is reviewed again after 30 calendar days, with one of exactly 3 outcomes, each in writing:

• Resolved. The strategy returns to Listed.
• Extended. Where you are demonstrably fixing it but are not finished, the review is extended by a further 30 calendar days, with written reasons and a stated date. A pause is extended at most once on this ground. An extension granted because Oval got something wrong does not count against that limit.
• Closure. The strategy will be closed. You, your investors, and your followers are all told on the same day, and closure happens 30 calendar days after that notice, not immediately.

10.6 Closure is final, and three things sit in front of it. When a strategy closes, its positions are sold and investors’ cash is returned to their accounts. Nothing after that can be undone, which is why it is the most protected action in this document.

• It is a decision made by our compliance team, in writing. No automated system closes a strategy.
• Everyone affected gets 30 calendar days’ notice. Throughout that period the strategy stays paused, continues to be valued every trading day, and every investor can withdraw on any trading day. The fund world has no single standard here and practice ranges from about a week to sixty days; Oval’s period matches the one it gives investors when a manager is removed (rule 12.5), because there is no reason an investor should get less warning when one strategy closes than when a manager leaves.
• Oval will not close a strategy while a correction request or an Oval investigation touching it is open. The closure date moves until that is answered.

10.7 When Oval gets it wrong. A condition raised on data Oval later corrects was never real. This rule states what happens to it, and to anything it caused. It applies whether the correction came from a request you filed under section 13 or from an investigation Oval opened itself under rule 13.2.

The readings are recomputed, not reset and not resumed. Oval re-runs every reading behind the condition on the corrected data, rather than estimating what difference the error made. Three outcomes:

• The rule does not read at all on the corrected readings. The condition is withdrawn. No resolution streak is needed, because your holdings never moved; our reading did.
• The rule still confirms on the corrected readings. The condition stands, but its deadline is re-anchored to the day we answer and you have the full window again, because the notice you received was built on data we have since corrected. A re-anchored condition may be disputed again, and doing so does not count as a second request under rule 7.5.
• The rule reads but does not confirm. The condition is withdrawn, and the count continues at its true recomputed value. That is neither a reset nor a resumption.

A withdrawn condition counts toward nothing. Not toward the repeat-correction trigger in rule 10.3, not toward the corrections counted in rule 12.4, and not toward the three-rule severe test in rule 7.7.

Anything it caused is reversed. Where a consequence rests on a trigger that no longer holds once the withdrawn item is removed from the count, that consequence is reversed and you are told which trigger fell away. Where an independent ground still stands, the consequence remains and you are told which ground it now rests on. This applies at every level: a corrected declaration, an unlisting, a pause, an account review and whatever that review produced.

A declaration corrected because of our error is restored, if your current holdings still support it. If your holdings have moved since and no longer support it, the corrected declaration stands and you may re-declare whenever your holdings support it. Either way your investors and followers are told that the change was ours and why.

Closure is the exception, because positions have been sold and cash returned. Rule 10.6 is written the way it is precisely so that this case cannot arise.

11. Review and dispositions

11.1 A flag raised to our compliance team’s review queue is a queue item for a person, not a finding or a penalty. Repeated flags for the same condition collapse into one item.

11.2 Our compliance team closes every item with one of 5 outcomes, each with a written rationale recorded permanently:

11.3 Every outcome notifies you, and the notice includes the written rationale. A closed item can be superseded by a later disposition; both remain in the record.

11.4 We close a routine queue item within 5 business days, the same commitment section 13 makes on correction requests. Where an item needs longer, you are told before those 5 days are up, with a reason.

12. Pausing and suspension

12.1 Beyond the ladder in section 10, our compliance team can pause a strategy or suspend a manager account directly. Both require a written reason, both are recorded permanently, and both are decisions made by people. Every notice states the reason and gives you a compliance contact.

12.2 A paused strategy stops rebalancing. Investors keep their positions and their money; the strategy continues to be valued daily. Open conditions and confirmation counters are both suspended for the duration, per rule 7.9.

12.3 A suspended account pauses all of that manager’s running strategies, with one account-level notice, and blocks publishing new strategies.

12.4 Mandatory account review. Our compliance team opens a review of your whole account when, within 6 months: 2 or more of your strategies are unlisted for compliance reasons; any strategy of yours is closed for compliance reasons; your strategies accumulate 3 or more automatic corrections, counting both deadline corrections under rule 10.2 and same-day corrections under rule 7.7; or we find that you deliberately misrepresented a strategy, which is sufficient on its own. Paper and live strategies count equally. Your strategies continue to run normally while a review is open; a review is an examination, not a sanction. The review’s outcomes are a warning, suspension, or removal from the platform, each with a written reason and each appealable under section 13.

12.5 Removal. Removal from the platform pauses every strategy you run. Your investors are told the same day and have 30 calendar days to withdraw or move their money themselves. At the end of that period any strategy still holding investor money is closed, its positions sold and the cash returned, under the protections in rule 10.6. This exists so that removal produces neither an indefinite pause with investor money inside it nor a forced liquidation nobody saw coming.

12.6 Restoration is a separate decision. Reinstating an account does not automatically resume its strategies; each is considered on its own.

13. Corrections and appeals

13.1 If you believe a check, a disposition, or an enforcement action got something wrong, you can file a request from your strategy page. It routes to our compliance team’s review queue, is answered with a written explanation, and, while open, stops any running deadline on the disputed condition (rules 7.5 and 7.9). We answer within 5 business days. If we need longer, we tell you before those 5 days are up, with a reason and a date. Your deadline stays stopped either way.

13.2 Route one: the data is wrong. A symbol carries the wrong sector, a fund was decomposed incorrectly, or the data is stale. If you are right, Oval corrects it at the source, and the correction applies platform-wide to every strategy holding that security. Data corrections are the most common outcome and the system is designed to make them fast.

We do not wait for you to file. Whenever a strategy’s unclassifiable weight crosses 5% of the whole portfolio, an investigation opens on our side automatically, because at that level the likeliest cause is a fund we could not decompose rather than anything you did. If it is still open when a condition under rule 7.3.5 confirms, it is the same investigation, escalated, not a second one.

An investigation of ours suspends the rule that depends on the data it concerns, from the day it opens, with nothing required from you and without using up your one correction request (rule 7.5). If the condition has not yet confirmed, confirmation is suspended, so no notice is ever sent while we are still unsure our own classification is right. If it has already confirmed, its deadline stops. We will not run a rule against you on data we are in the middle of questioning. Your notice tells you it is running. We answer it within 5 business days, the same commitment this section makes on requests you file, so a deadline can never sit stopped because we forgot about it. If the investigation finds our data was wrong, rule 10.7 governs what happens to anything already raised on it.

13.3 Route two: the risk verdict is wrong. A dispute about either risk figure, your holdings read or your measured risk, is reviewed against your holdings and your daily values by our compliance team, and answered with the arithmetic that produced the number.

13.4 Route three: you disagree with the standard. If your dispute is with a classification rule itself rather than the data, you receive an explanation of the standard and guidance on adjusting your declaration. Oval never grants per-strategy exceptions to classification standards, for the same reason index providers do not: GICS reclassifications apply to a company universally, never for one client, because the standard is only a standard if it applies to everyone identically.¹ A technology strategy heavy in a retailer’s stock declares Consumer Discretionary as an additional sector; it does not get the retailer reclassified.

13.5 These rules and thresholds can change. Where a threshold carries a consequence for you, the threshold is published here before it applies to you.

14. What investors and followers are told

14.1 Oval discloses facts about the investor’s arrangement. It does not broadcast its supervisory process. Flags, windows in progress, reviews, and correction requests are matters between you and Oval. Outcomes that change what an investor holds or what a follower is evaluating are disclosed.

One review in progress is disclosed, and it is the only one. When a strategy is Paused under rule 10.4 because the problem was not fixed in the 5 business days, your investors and followers are told that closure is one of the three possible outcomes of the review that follows — the same thing the written reason tells you, on the same day. This is a deliberate exception to the paragraph above, because it discloses a review that is still running rather than an outcome that has landed. It is made because closure is the one action nothing after it can undo, and closure should never be the first anyone hears of the possibility.

14.2 Notifications, by audience:

Publishing a new strategy is the one row that is off by default for both audiences. It is a push from a registered adviser to its own investors, which sits nearer a recommendation than a disclosure, and rule 14.5 already gives everyone per-category control. Everything else in the table is a fact about an arrangement someone already has, which is why it is not optional.

The fund world’s standard for a change in a name-based investment policy is 60 days’ advance notice to shareholders.⁹ Oval gives same-day notice instead, because Oval investors hold their own accounts and can withdraw any trading day; the protection advance notice exists to provide, time to leave before a change binds you, is provided here by daily liquidity.

14.3 Description changes. Adding or removing a section of your pitch, or any change to your tagline, notifies the same day. Smaller edits accumulate and are summarized in the weekly digest once they cross a materiality threshold Oval maintains internally. The system errs toward telling people.

14.4 Your note. When you submit declaration or description changes, you may attach one note explaining them, covering everything in that submission. The note is screened like any manager communication and appears beneath Oval’s factual statement of what changed. It never replaces that statement: the notice always says what changed in Oval’s words, then yours.

14.5 Recipients control their notification preferences in settings, per category.

14.6 Pledgers. Before real-money investing opens, a pledger is an investor under rule 2.8 and receives every notification the table above sends to investors. The content differs, because a pledge is an indication of interest and not an investment: nothing has been collected, no money has moved, and a pledge can be changed or withdrawn at any time. Where a strategy closes, a pledge simply ends and there is nothing to return. No notification sent to a pledger describes money, holdings, or withdrawal, because none of those exist, and saying otherwise would suggest a pledge is something it is not.

15. Conflicts of interest

15.1 You may not use a strategy to benefit a position you hold outside it. Trading a security you also hold personally is not prohibited; using a strategy or its audience to move a security’s price is.

15.2 Oval may require disclosure of your personal holdings. Any threshold that triggers required disclosure will be published here before it applies to you.

15.3 Deliberately using platform visibility, including the leaderboard, to promote a security you hold personally is deliberate misrepresentation under rule 12.4.

16. Conduct off the platform

16.1 Your life off Oval is yours. Oval does not monitor your personal accounts, your opinions, or your other work, and holding strong views in public is not a compliance matter.

16.2 Off-platform conduct becomes Oval’s concern in 4 cases:

• Unlawful conduct relating to money or markets. Fraud, market manipulation, theft, or any conduct that would change an answer on your disclosure questionnaire. The duty to update your disclosures (rule 3.4) applies regardless of where the conduct occurred.
• Unlawful investment advice. Holding yourself out as an investment adviser, or providing personalized investment advice for compensation, in circumstances where the law does not permit you to. Managing a model strategy on Oval does not license you to advise individuals off it.
• Misrepresenting your Oval track record. If you quote your Oval performance anywhere off the platform, the figures must match what Oval publishes, with the same period and the same basis. Cherry-picked, altered, or fabricated performance claims about your strategies are deliberate misrepresentation under rule 12.4, wherever they appear. As a registered investment adviser, Oval is accountable for advertising built on its platform’s numbers, and this rule is how that accountability reaches you.
• Misrepresenting Oval. Claiming an affiliation, endorsement, or status with Oval that you do not have.

16.3 Anything found under rule 16.2 opens a mandatory account review under rule 12.4.

17. Where these numbers come from

Some of the numbers in this document follow external standards, and the footnotes say which: the sector taxonomy is GICS, the 80% in-mandate floor and the shape of the cure-window system follow the SEC’s fund-naming rule, the 10-day compliance test follows exchange listing practice, the risk persistence period and the majority-category rule follow the European retail fund risk-indicator regimes, the existence of a mandate type that claims nothing follows the same fund-naming rule’s scope, and the disclosure-update duty follows the standard for registered securities professionals.

The rest are Oval’s own judgment, set for a platform where strategies are young and managers are building track records rather than defending established ones, and this document says so rather than implying a mandate that does not exist. The 25% primary minimum, the 15% additional-sector minimum, the 25% Diversified line, the 7.5-point near-largest band and the 15-point severe line, the 40% Diversified severe line, the 5% / 15% / 30% unclassifiable ladder, the risk bands, the 60-day and 30-day windows, the 21-check risk persistence count, the 5-business-day correction, investigation and review turnarounds, the 5-business-day fix period after unlisting, the 30-day pause review, and the 30-calendar-day notice before a closure or a removal-driven wind-down are Oval’s numbers.

Where they are stricter than the regulatory baseline, that is deliberate: our books reprice daily, our monitoring runs nightly where the fund world’s runs quarterly,² and our investors can leave any trading day, so a label here carries more immediate weight than a fund name does. Where a number is shorter or looser than a large institution would use, the rule that uses it explains the reasoning, as rule 8.2 does.

Two of those deserve a word. There is no mandated notice period before a fund is wound up; it comes from a fund’s own charter documents, and published practice ranges from about a week to sixty days. Oval sits in the middle of that range and gives the same 30 calendar days whether a single strategy closes or a manager is removed, because an investor’s need for warning does not depend on which of the two happened. And no regime we could find says what to do when the supervisor’s own data caused the finding, so rule 10.7 is Oval’s own construction throughout.

One number changed shape rather than value and is worth naming. The in-mandate floor was previously 80%, rising to 85% and 90% as more sectors were declared. It is now a flat 80% at any count, because rule 5.8 and rule 7.3.7 Undeclared sectors now do the work the escalation was doing, and two mechanisms enforcing one idea drift apart.

These numbers can change. Section 19 governs how.

18. What Oval does not do

Oval does not restrict which securities you may hold; leveraged and inverse funds are permitted. Oval does not reject a trade for being risky, unusual, or contrary to your mandate. Oval does not require pre-approval of a rebalance. Oval does not add a sector to your declaration that you did not choose. Oval does not require you to claim a sector at all. Oval does not share your holdings with other managers, and it does not show you individual investors’ identities.

19. Changes to this rulebook

This document is versioned and carries its version and effective date at the top. Rule numbers are permanent: a changed rule is superseded, and its history remains visible. Oval gives notice before a change takes effect, through the same notification channel as everything else. Where a change tightens a rule against you, the notice precedes the effective date.