# Fund committee: terms of reference, seat criteria, code of conduct

**Version 1.4 DRAFT, 19 October 2026.** Under ETP Foundry Methodology v1.1, which governs wherever this document differs. This document governs the *people*: who may hold a seat on a fund's committee, for how long, what they must do, and how they leave.

> **In short.** Every fund run with ETP Foundry has a committee: its own parties (sponsor, each token's issuer as reserve signer, administrator, and where needed a custodian, transfer agent or lender). Each holds one seat, checks its own numbers, and signs the fund's NAV and other actions on the ledger, or refuses. A set number must sign (K of N, never fewer than two); the sponsor can never reach it alone; ETP Foundry never signs and no seat it runs counts. Seats are free. Either side can stop at any time during the pilot. These terms take effect for a fund when its committee adopts them; none has yet.

> **What changed from v1.3.** v1.3 (28 September 2026) set up a "NAV Committee" per asset for the retired price-fixing product: venues, a lender and the issuer agreed a token's official price. v1.4 restates the terms for a **fund committee** per fund, made of the fund's own parties, who sign the NAV ETP Foundry calculates from existing price providers. Kept: eligibility, terms of office, the public roster, obligations, suspension and removal, the code of conduct, the appointment letter. Dropped: venue eligibility and volume tests, the 24/7 off-hours family, tier preconditions, strikes and observation windows, and benchmark-administrator wording. The "context" pitch sections are removed.

**Status.** Canton DevNet only. No outside party holds a seat, and no committee has met. ETP Foundry is not authorised or registered with any regulator. The code has not been independently audited.

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## 1. Purpose

A fund committee exists so that a fund's NAV and its other actions are **signed by the parties responsible for them**, each from its own data, and so that no single party can decide alone. It is not an advisory board. Members act for their firm, on the numbers their firm submits.

## 2. Composition

| Seat | Signs | Required in |
|---|---|---|
| Sponsor | Basket changes, fees, compliance actions, suspension, wind-down; co-signs the NAV | every fund |
| Reserve signer (token issuer) | That its own token is fully backed | every fund holding an issued token (one per issuer) |
| Administrator | The daily NAV, fee accruals and corrections, after recomputing them | crypto, treasury and Canton Coin funds; optional elsewhere |
| Custodian | That holdings in its custody match the ledger | funds with assets held off the ledger |
| Transfer agent | The share count; co-signs compliance actions | optional |
| Lender | That the NAV is within its declared tolerance of its own value | optional add-on |
| Venue / valuation agent / servicer | Fair value or loan data, only where an asset has no price feed | tokenized stocks, Canton-native tokens, private credit |
| ETP Foundry | Calculates and proposes. **Not a member**, enforced on the ledger | — |

Each fund's template sets N, K and the required roles (Methodology v1.1 §2). They are recorded on the ledger and printed on every signed action.

**Rules every committee keeps** (enforced on the ledger):
- K ≥ 2, and K is no more than the number of seats that count.
- The sponsor can never reach K alone.
- No seat ETP Foundry runs or hosts counts toward K.
- A seat signs only as its own role.
- An open seat is shown as open, never filled with a stand-in.

**Independence:** parties the sponsor controls or is affiliated with count as the sponsor for the "never alone" rule; any affiliation between seat holders is declared on the roster.

## 3. Eligibility

Before a seat is issued:
1. **Entity:** a named legal entity, with disclosed principals and licence or regulatory status.
2. **People:** the individuals who will sign are named and have completed the seat walkthrough.
3. **Arrangements:** a written agreement; a named alternate; an escalation contact reachable at the valuation time; declared tolerances (administrator `navBps`, lender tolerance) and freshness limits (reserve signer, custodian, transfer agent).
4. **A signed appointment letter and code of conduct** (§10, §11).
5. **Disclosure** on the fund's roster (§5).

Seat-specific checks at onboarding: a reserve signer states its reserve model and evidence (proof-of-reserve report, on-chain contracts, or custodian statement) and its redemption terms; a custodian shows client assets are segregated; a transfer agent is appointed under the fund's documents; a lender shows it lends against the fund's shares.

## 4. Terms of office

- Initial term **six months** from appointment, extended to **three years** at the first annual review if the seat has met its obligations.
- Maximum **nine consecutive years**, then at least one year off.
- **Annual review** of each seat: obligations met, conflicts and tolerances re-declared, key level reviewed.
- Alternates act only with prior written agreement and are disclosed in the record like any other signer.

## 5. Public roster and conflicts

No seat is real until it is on the fund's public roster: name, company, role, date of conflicts declaration, key level (L1/L2/L3) and declared tolerance. Members may hold the fund's assets or shares and may have a commercial interest in the fund. That is the design: different interests, disclosed.

ETP Foundry's own conflicts are disclosed on the same page: if a fund pays a fee in basis points, our fee rises with the fund's value, which we calculate; we run creation and redemption; and today we operate every seat on DevNet. See the conflicts policy (v0.3).

## 6. Obligations of every seat

1. Sign or refuse every action your role covers. Silence is recorded as silence, not consent.
2. Send your required submission from your firm's own systems. A figure you cannot produce is not estimated: your checker sends nothing.
3. Tolerances are declared in advance; changing one is a dated, disclosed change to your seat, never a per-day adjustment.
4. Declare conflicts before you sign anything they touch; re-declare annually.
5. Notify any change of control, licence status, role, reserve model or custodian within five business days.
6. Cooperate with inquiries into any action you signed or refused.
7. Keep other members' submissions and unsigned proposals confidential.
8. Hold your key at your declared level. A seat at L1 is told in writing that ETP Foundry could technically act as its party, and that an L1 signature never counts.
9. Pause creations and redemptions (up to 72 hours) if your own data shows a real problem, if your role allows it (sponsor, administrator, reserve signer, custodian, transfer agent).

## 7. Suspension and removal

| Trigger | Consequence | Who decides |
|---|---|---|
| A reserve signer or custodian misses its confirmation | the confirmation cannot be finalised; every party is alerted and any seat allowed to may pause creations (Methodology v1.1 §6) | the seats; committee at the next meeting |
| Three consecutive unexplained silences | membership review | committee |
| Three refusals without stated cause | membership review | committee |
| Lender no longer lends against the fund's shares | seat lapses at the next review | committee |
| Any regulatory or court sanction for market manipulation | **mandatory resignation** | automatic |
| A knowingly false submission | removal, and the affected actions are reviewed under the correction policy | committee; published |
| Insolvency or loss of licence | immediate suspension | ETP Foundry; committee at the next meeting |
| Disagreeing with a proposal | **never a ground** | — |

A change of roster is a change to the fund's committee on the ledger: until the fund is set up again with the new roster, its proposals are refused. Every suspension and removal is published with its reason.

## 8. Meetings and minutes

- **Quarterly**, fixed agenda; ETP Foundry attends without a vote.
- **Quorum:** K of N present.
- **Minutes** within eight working days; a public summary within fifteen.
- **Annual self-review** of these terms.

## 9. Responsibilities

The committee is **not** an independent oversight function: its members are interested parties. No oversight function exists yet; until one does, ETP Foundry performs the reviews below, publishes them and says so.
1. Review every missed NAV, refusal, re-proposal, pause, suspension and correction of the quarter.
2. Admit and remove members; decide whether K changes when N changes.
3. Review the conflicts register.
4. Review complaints (acknowledged within 2 business days, answered within 20).
5. Review the fund's price sources and their order.
6. Review the trust-level mix of the quarter's signatures.
7. Review these terms annually.

## 10. Appointment letter (template)

> **Appointment to the fund committee of [Fund] — [Seat]**
>
> [Firm] is appointed to the [Seat] seat of the fund committee of [Fund] from [date], for an initial term of six months under these Terms of Reference v1.4 and ETP Foundry Methodology v1.1.
>
> Named signers: [name, role, e-mail]; alternate [name]. Key level at appointment: [L1/L2/L3]. Declared tolerance: [n] bp. Reserve model (reserve signers): [attested / on-chain / custodial]. Freshness limit: [n] hours.
>
> Nothing is paid or charged for this seat, now or later. [Firm] may resign on thirty days' written notice (during the pilot, before this appointment, either side may stop at any time).
>
> [Firm] confirms that the conflicts declared in the attached schedule are complete, and agrees to the code of conduct in §11.
>
> Signed for [Firm] ______  Signed for ETP Foundry ______  Date ______

## 11. Code of conduct

Signed before a seat is issued. Identical in substance to Methodology v1.1 §9.3.
1. I submit only data my firm's own systems produced. I never submit an estimate or someone else's number as ours; if a figure cannot be produced, the checker sends nothing.
2. I keep my declared tolerances. I never widen one to make a check pass.
3. I declare every conflict before an action it touches, and re-declare annually.
4. I keep unsigned proposals and other members' submissions confidential.
5. Submissions are produced by an automated checker or a documented procedure, by named people under my firm's control. I rotate a credential on any suspicion of exposure and do not share a seat.
6. I will resign the seat if my firm or I am sanctioned for market manipulation.
7. A knowingly false submission is grounds for removal and public disclosure.
8. At key level L1, ETP Foundry could technically act as my party; every such act is logged and disclosed, and an L1 signature never counts.
9. I keep the data behind each submission for five years and produce it on request.
10. Refusing is the mechanism working, and is never held against me.

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*Status: v1.4 draft, not yet adopted by any committee because none has met. It takes effect for a fund on adoption at its committee's first meeting. ETP Foundry is a trading name of Lucilla, Inc., Toronto. committee@etpfoundry.com*