Equity synchronization is an essential technical process that ensures fairness and accuracy in the Funds Management system. Understanding how this mechanism works helps both Funds Managers and investors appreciate the transparency and integrity built into the platform.
What is Equity Synchronization?
Equity synchronization (often called "Equity Sync") is an automated balancing mechanism that ensures profits and losses are accurately reflected across all investor accounts and the Funds Manager's trading account.
This process maintains perfect alignment between:
The fund pool's overall trading performance
Individual investor accounts (virtual investment accounts stored in Investment Wallets)
The Funds Manager's view of fund performance
Why Equity Synchronization is Essential
The Challenge
When an investor subscribes to a fund, a corresponding amount of virtual capital is credited to the fund's trading account. As the Funds Manager executes trades, these positions are proportionally allocated to all investor accounts based on their subscription amounts.
Ideally, the sum of all investors' profits or losses should exactly match the fund's overall performance. However, small discrepancies can occur due to technical factors.
Common Causes of Discrepancies
Even with sophisticated systems, minor differences can arise from:
1. Multiple Trading Servers
Different trading servers may handle fund pools and investor accounts, leading to slight variations in execution and calculation.
2. Calculation Precision Variations
Different servers may use slightly different levels of precision when calculating equity and profit/loss values.
3. Rounding Differences
Small differences in how equity and trade values are rounded across different systems can accumulate over time.
4. Timing Differences
Microsecond variations in when trades are recorded on different servers can create minor discrepancies.
The Risk Without Synchronization
Without regular synchronization, these minor differences could accumulate over time, potentially creating:
Unfair discrepancies between what the Funds Manager sees and what investors experience
Inaccurate performance reporting
Confusion about actual fund performance
Loss of trust in the system
Equity synchronization prevents these issues by continuously monitoring and correcting any discrepancies.
How Equity Synchronization Works
The equity synchronization process is automated and operates continuously in the background. Here's how it functions:
Step 1: Comparison
The system compares closed trade results between:
The fund pool (the Funds Manager's trading account)
All linked investor accounts (virtual investment accounts stored in Investment Wallets of investors)
The comparison examines:
Total profit/loss on closed positions
Account equity values
Balance calculations
Step 2: Identification
The system identifies any discrepancies in profit/loss calculations, no matter how small, between:
The fund pool's performance
Individual investor account performance
Expected vs. actual values
Step 3: Adjustment
The system makes necessary micro-adjustments to ensure perfect alignment across all accounts, ensuring:
All investors see accurate performance
The Funds Manager's view matches investor reality
Total fund performance is accurately reflected
Step 4: Protection Accounting
The system accounts for any Negative Balance Write Off protections that may have been applied to investor accounts, ensuring:
Protected accounts are handled correctly
Adjustments don't violate protection policies
Fair distribution of performance across all participants
When Synchronization Occurs
Equity synchronization is not a one-time event but an ongoing process that occurs automatically at regular intervals and during critical events.
Regular Intervals
Continuous background monitoring
Scheduled synchronization checks
Real-time balance verification
Critical Events
The system performs additional synchronization during:
When Trades are Closed
Each time a position is closed, the system verifies that profits or losses are correctly distributed across the fund pool and all investor accounts.
After Significant Market Movements
During periods of high volatility or major market events, additional synchronization ensures accuracy.
When Investors Subscribe
When new investors join the fund, synchronization ensures their virtual investment accounts are properly integrated into the fund pool.
When Investors Redeem
When investors redeem from the fund, synchronization ensures accurate final balances in their Investment Wallets.
During Billing Periods
At the end of each billing period, comprehensive synchronization ensures accurate Performance Fee calculations.
Benefits of Equity Synchronization
For Investors
✓ Accurate Performance Tracking
Your Investment Wallet always reflects the true performance of the fund
✓ Fair Treatment
All investors receive proportionally accurate profit/loss allocation
✓ Transparency
You can trust that displayed performance matches actual results
✓ Protection
The system ensures your account protections are respected
For Funds Managers
✓ Accurate Reporting
Your view of fund pool performance matches what investors see in their Investment Wallets
✓ Fair Performance Fee Calculation
Performance Fees are calculated on accurate, synchronized data
✓ System Integrity
You can confidently manage funds knowing the system maintains accuracy
✓ Reduced Disputes
Automatic synchronization prevents discrepancies that could lead to investor concerns
For the Platform
✓ Maintains Trust
Ensures all participants have confidence in the system
✓ Prevents Accumulation of Errors
Regular synchronization prevents small errors from becoming significant problems
✓ Ensures Compliance
Accurate record-keeping supports regulatory and operational requirements
Understanding Investment Wallets
Investment Wallets are where your virtual investment accounts are stored when you subscribe to funds. Equity synchronization ensures that:
Your Investment Wallet balance accurately reflects fund performance
All profits and losses are correctly allocated
Your virtual capital is properly tracked
Redemptions are processed with accurate balances
What You Need to Know
Automatic Process
Equity synchronization happens automatically in the background. You don't need to take any action or initiate synchronization manually.
Transparent Operation
While the synchronization process is technical, its effects are transparent. All participants see accurate, synchronized balances at all times.
Minimal Impact
The adjustments made during synchronization are typically very small—often just fractions of a cent—and are designed to correct minor technical discrepancies rather than change actual performance.
Continuous Protection
The system operates continuously to maintain accuracy, not just at specific times. This ensures ongoing fairness and transparency.
Frequently Asked Questions
Q: Will I notice when synchronization occurs?
A: No. The process happens automatically in the background and the adjustments are typically so small they're imperceptible to users.
Q: Does synchronization change my actual performance?
A: No. Synchronization corrects minor technical discrepancies to ensure your displayed performance accurately reflects your actual performance.
Q: Can synchronization cause losses?
A: No. Synchronization doesn't create losses; it ensures that existing profits and losses are accurately reflected across all accounts.
Q: How often does synchronization occur?
A: Continuously. The system monitors and synchronizes regularly, with additional checks during critical events.
Q: What is the fund pool?
A: The fund pool is the Funds Manager's trading account where all trades are executed. Synchronization ensures this matches all investor Investment Wallets.
Technical Transparency
Equity synchronization is one of many technical mechanisms that ensure the Funds Management system operates fairly and accurately. By automatically correcting minor discrepancies before they can accumulate, the system maintains the integrity that both Funds Managers and investors depend on.
Need More Information?
If you have questions about equity synchronization or notice any discrepancies in your Investment Wallet, please contact our support team through Live Chat or submit a request through the Service Hub. Our team can provide detailed information about your specific account and explain any adjustments that may have occurred.