C2 enforces a "Tradable Model Account Size" policy.

Under this policy, if you manage a strategy on Collective2, the Model Account size of your strategy must be kept below $125,000 in order to accept new subscribers. To maintain a Model Account size below this limit, you can "rescale" your strategy downward. Keep in mind that while rescaling is available at any time, it can only be done when your strategy is flat and has no open positions. So you may want to plan in advance the most convenient time to rescale your strategy downward. And, finally, when you do rescale your strategy, be sure to do so to a size well below the $125,000 limit, so that you will have room to grow your strategy.

(Strategies which use BrokerTransmit are currently not required to meet this requirement.)

Why do we have a Tradable Model Account Size Policy?

There are several reasons for this policy.

• • It makes it easier for AutoTraders to deploy capital efficiently inside brokerage accounts.
• • It enables simple apples-to-apples comparisons across strategies.
• • It decreases the risk that subscribers and C2 bear.
• • For many instruments, it increases the realism of the hypothetical track record by making quantities appear tradable in actual market liquidity conditions.
• • It reduces the incentives for gamesmanship by strategy creators who may be tempted to increase hypothetical returns numbers by applying expenses against a larger nominal Model Account.

Due to the compelling reasons for this policy, we discourage strategy managers from seeking exemptions from the policy. All exemption requests will be carefully reviewed, and most will be denied. If you nevertheless seek an exemption from this Model Account Size limit, please write an email to [email protected]. Be sure to include the name and URL of your strategy, and the specific reasons why you cannot run your strategy in the $125,000 Model Account limit. Also, be sure to propose the smallest account size in which you can reasonably run your strategy.