Precious Metals are one-to-one bilateral agreements (so-called OTC derivatives) with physical metals as underlying assets. That means that the value of the Fractional Metal always directly reflects the price development of the underlying metal on the Loco London Precious Metals Market.
For example, if an underlying metal like Gold has a current market price of €100, the price of the Fractional Metal agreement on Gold will also be €100. Furthermore, Precious Metals allow you to decide which fraction of the underlying metal you want to invest in.
By purchasing Precious Metals you enter into a bilateral agreement with CM-Equity AG. CM-E is the sole counterparty for all claims arising from the Precious Metals trading. Trading of the Fractional Metal does not take place on the Loco London Precious Metals Market but against CM-E as Counterparty, Over-the-Counter (OTC).
You as purchaser of Precious Metals have no claim to the delivery of the Underlying Metal.The Precious Metals are perpetual (which means that they have no fixed maturity date) and can be sold and terminated at any time during the trading hours of the Loco London Precious Metals Market.
CM-Equity AG is a member of the Compensatory Fund of Securities Trading Companies (Entschädigungseinrichtung der Wertpapierhandelsunternehmen, “EdW”). The EdW grants you compensation if CM-E is not able to meet its liabilities from securities transactions. The compensation case must have been determined by BaFin. A claim for compensation exists only if funds are denominated in the currency of an EU member state or in euro and is limited to 90% of the claim or a maximum of €20,000.00.