Form ADV Part 2A Brochure
DASTA Investments LLC
March 15th, 2023
This brochure provides information about the qualifications and business practices of DASTA Investments LLC (“DASTA”). If you have any questions about the contents of this brochure (“Brochure”), please contact our chief compliance officer at Justin@dubapp.com. This information has not been approved or verified by the United States Securities and Exchange Commission (the “SEC”) or by any state securities authority.
Additional information about DASTA Investments LLC also is available on the SEC’s website at www.adviserinfo.sec.gov.
Registration with the SEC does not imply a certain level of skill or training.
DASTA Investments LLC
520 Broadway, 11th Floor
New York, New York 10012
Tel: 917-261-2036
Material Changes
This brochure amendment is made in connection with DASTA’s annual updating requirement for 2023 and serves as an update to DASTA’s brochure dated March 15th, 2022. This brochure contains routine annual updates and clarifying changes to the prior brochure:
- Item 4: relating to DASTA’s advisory business, including clarifying changes to DASTA’s Model Portfolios, Dubbing Mechanics, and User’s risk score;
- Item 8: relating to methods of analyzing Model Portfolios and RIAs;
- Item 5: relating to fees and compensation, to clarify that DASTA Incorporated may pay compensation for User content; and
- Item 13: clarifying the review of accounts that DASTA conducts.
As of December 31, 2022, DASTA did not have any client assets under management.
Item 3 Table of Contents
Item 4 Advisory Business
Item 5 Fees and Compensation
Item 6 Performance-Based Fees and Side-by-Side Management
Item 7 Types of Clients
Item 8 Methods of Analysis, Investment Strategies and Risk of Loss
Item 9 Disciplinary Information
Item 10 Other Financial Industry Activities and Affiliations
Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
Item 12 Brokerage Practices
Item 13 Review of Accounts
Item 14 Client Referrals and Other Compensation
Item 15 Custody
Item 16 Investment Discretion
Item 17 Voting Client Securities
Item 18 Financial Information
DASTA Investments LLC (“DASTA”) is an investment adviser with its principal place of business in New York, New York. DASTA is a wholly owned subsidiary of DASTA Incorporated, a Delaware corporation. Steven Wang is the principal control person of DASTA Incorporated.
DASTA is eligible to register as an investment adviser with the SEC as an internet adviser pursuant to Rule 203A-2(e) of the Investment Advisers Act of 1940, as amended, due to its advisory business being conducted through a mobile application and web-based application owned by DASTA Incorporated (collectively, the “DASTA App”).
Advisory Services
DASTA provides investment advisory services and discretionary portfolio management services exclusively through the DASTA App to individuals (“DASTA Users”) who are natural persons. DASTA Users can utilize the DASTA App’s filtering and search tools to discover and invest in (1) proprietary investment strategies managed by DASTA, or (2) third-party registered investment advisor (“RIA”) managed portfolios (collectively “Model Portfolios”). For purposes of clarity, when a DASTA User allocates assets to follow a RIA’s portfolio, DASTA manages the DASTA Users assets by replicating (or “Dub” / “Dubbing”) the trading activity of the RIA’s portfolio in the DASTA User’s account. DASTA Users have sole discretion whether to Dub one or more Model Portfolios.
DASTA does not provide financial planning services or give tax or legal advice. DASTA Users are urged to consult with his or her own advisors with respect to the legal, tax, regulatory, financial, and accounting consequences of an investment in any Model Portfolio.
User Profiles and Risk Scoring
The DASTA App also collects and analyzes information provided by each DASTA User, which may include the DASTA User’s age, income, investment objectives, investment horizon, risk tolerance, and other information that DASTA determines in its sole discretion to establish a user profile (“User Profile”). A User Profile may include a risk tolerance score determined solely through responses provided by DASTA Users when creating the User Profile.
DASTA Users may not invest in Model Portfolios determined by DASTA to have a higher risk rating than the DASTA User’s risk tolerance score (a “risk mismatch”). DASTA Users are notified when a risk mismatch exists and will prevent a DASTA User from Dubbing that Model Portfolio. DASTA Users can update their User Profile at any time which may or may not cause a change to that DASTA User’s risk tolerance score. DASTA Users are always solely responsible for notifying DASTA of any changes in their financial situation, investment objectives, risk tolerance and investment restrictions.
General Considerations
The DASTA App is a mobile and online investment and trading platform, designed to be a marketplace of investment ideas and provide access to DASTA Users to a wide variety of investment strategies. DASTA provides its advisory services primarily online, however DASTA customer support is available for telephone consultation as needed to provide a complete advisory experience to DASTA Users.
DASTA Users should be familiar with investing online and comfortable communicating with DASTA through electronic means. When DASTA Users agree to the terms of the DASTA App, they agree to receive all communications and documents electronically (via email or directly through the DASTA App). The DASTA App is not suitable for DASTA Users if they have limited access to internet or don’t have the physical technology required to run the DASTA App.
It's important for DASTA Users to keep in mind that the DASTA App and any Model Portfolios a DASTA User may invest in is only one component of their investment strategy. The DASTA App is not designed to provide financial planning services and is limited by the information a DASTA User provides during onboarding. Investing is inherently risky and may result in a total loss of your investment.
Dubbing Mechanics
When a DASTA User Dubs a Model Portfolio, DASTA sends corresponding automated trades reflecting the Model Portfolio holdings directly to the third-party broker-dealer, Apex Clearing Corporation (“Third Party Broker”), through the DASTA App. If a Model Portfolio that a DASTA User Dubs changes, DASTA sends corresponding automated trade instructions to the Third-Party Broker reflecting the Model Portfolio changes. DASTA does not always reflect the trading activity in a Model Portfolio. For instance, a DASTA User’s may impose reasonable restrictions on investing in certain securities or types of securities. In those instances, DASTA will allocate the remaining weight pro-rata across all holdings in the Model Portfolio.
When multiple DASTA Users Dub a Model Portfolio, DASTA may, but is not required to, aggregate orders for the purchase and sale of securities to reflect the Model Portfolio. In such instances, each DASTA User will receive their pro-rata allocation with the average price per unit.
Each DASTA User opens a brokerage account (“Brokerage Account”) with the Third-Party Broker through which all securities transactions are executed.
Model Portfolio Availability
There are multiple instances where DASTA may cease the availability of a particular Model Portfolio. For instance, DASTA seeks to make available only those Model Portfolios that meet the diligence requirements of DASTA. To the extent these requirements are not met, as determined by DASTA, DASTA may decide to remove the Model Portfolio from the DASTA App. Where this is the case, DASTA will seek to provide DASTA Users with as much notice as reasonably practical prior to removing the Model Portfolio from the DASTA App. Other reasons for removal of a Model Portfolio from the DASTA App include death or incapacity or retirement of an RIA, or the RIA’s refusal to no longer participate with the DASTA App. In all cases it’s important to note that DASTA cannot guarantee the availability of any Model Portfolio on the DASTA App.
The availability of a Model Portfolio should not be considered by a DASTA User to be an endorsement or approval of an RIA or its Model Portfolio. Investing in securities involves inherent risks, and you should be prepared for the potential of losing money when you invest in securities.
Model Portfolio Evaluation
Prior to a Model Portfolio’s availability on the DASTA App, DASTA conducts due diligence on each RIA and Model Portfolio, both from a qualitative and quantitative perspective. DASTA’s review includes but is not limited to the following:
- Qualification Review: A review of a RIA’s registration status, ADV Part 2A, investment experience, and team composition
- Strategy Evaluation: Review of a strategies exposure, constraints, case studies, risk-return profile, risk controls, and RIA decision making
- Quantitative Assessment: Performance History (vs Benchmark), risk adjusted returns, upside/downside capture, back testing, and other performance metrics
All Model Portfolio creators are required to be registered investment advisors or otherwise exempt from registration. However, DASTA Users are not investing with RIAs that create Model Portfolios and the RIAs do not have discretionary trading authority over DASTA User accounts. RIAs create each Model Portfolio without considering the DASTA User’s investment objectives. Therefore, DASTA Users must rely on their own examination of the Model Portfolio, including the merits and risks involved, before Dubbing any Model Portfolio. DASTA does not endorse or approve any RIA or its Model Portfolio for investment by a DASTA User. There is no guarantee that the objective of any or all Model Portfolios will be achieved.
Self- Directed Trading
While not part of its advice and advisory business, as an accommodation to DASTA Users, DASTA may permit DASTA Users to make their own investment decisions and direct their own trades to the Third-Party Broker through the DASTA App (“Self-Directed Trading”). In such cases, DASTA will not be providing investment advice, any recommendations or advisory services and is therefore not acting as an investment adviser with respect to such trading. Such DASTA Users will be solely responsible for any Self-Directed Trading.
DASTA Users pay DASTA an asset-based management fee (the “Management Fee”) ranging from 0.25% to 3% per annum of the market value of invested asset that the DASTA User allocates to Dubbing certain Model Portfolios. The Management Fee is calculated daily and charged monthly in arrears. Market value of an investment is calculated from data provided by the Third-Party Broker. DASTA deducts the Management Fee from DASTA User accounts by instructing the Third-Party Broker.
DASTA may, from time to time, vary or waive fees in its sole discretion. DASTA may amend its fee schedule at any time by giving thirty (30) days advance written notice to the DASTA User. Although DASTA believes its fees are competitive, DASTA Users should be aware that lower fees for comparable services may be available from other sources.
DASTA Users should also understand that the fee range discussed above is specific to what DASTA charges and does not include certain charges imposed by third parties such as custodial fees by the Third Party Broker and exchange traded fund (“ETF”) fees and expenses. DASTA User assets also may be subject to other fees and taxes on brokerage accounts and securities transactions. For investments in ETFs, clients may be charged internal management fees, distribution fee and other expenses, which are described in each funds’ prospectus.
Payments to RIAs and other DASTA Users:
DASTA Incorporated may, from time to time, pay certain DASTA Users or RIAs, a royalty fee, for publishing content on the DASTA App, which may include periodicals, videos, or other content (collectively “User Content”).
DASTA may also, from time to time, pay certain RIAs, a licensing fee, for providing DASTA with strategy information relating to their Model Portfolios, which may include trading signals, on the DASTA App (collectively “Model Data”). If DASTA determines, in its sole discretion, to make available a Model Portfolio using the Model Data, a portion of the Management Fee collected by DASTA from that Model Portfolio shall be paid to the RIA as a data licensing fee for the Model Data used to create the Model Portfolio.
Item 6 Performance-Based Fees and Side-by-Side Management
This Item is not applicable as DASTA does not charge performance-based fees.
DASTA’s clients consist of individuals, including High Net worth individuals. DASTA does not require a minimum account size for opening or maintaining a DASTA User account. Individuals may become DASTA clients by applying to open an account through the DASTA App. All required documents and disclosure are executed and presented in the DASTA App.
Item 8 Methods of Analysis, Investment Strategies and Risk of Loss
Methods of Analysis and Investment Strategies.
DASTA utilizes several methods to evaluate Model Portfolios. DASTA evaluates both the RIA and Model Portfolio initially and on an ongoing basis thereafter. Initially, DASTA will review relevant information about the RIA and the Model Portfolio through its diligence process. DASTA will require that the RIA complete a due diligence questionnaire that endeavors to get information about the RIA and its strategy. The diligence process includes a review of the following:
- Qualification Review: A review of a RIA’s registration status, ADV Part 2A, investment experience, and team composition
- Strategy Evaluation: Review of a strategies exposure, constraints, case studies, risk-return profile, risk controls, and RIA decision making
- Quantitative Assessment: Performance History (vs Benchmark), risk adjusted returns, upside/downside capture, back testing, and other performance metrics
DASTA will meet with the RIA to conduct an in person or Zoom interview where addition questions are asked, and information is collected. DASTA will then meet internally with its investment committee to determine whether to engage with the RIA and its strategy as a Model Portfolio.
If an RIA and its strategy is approved, the RIA will enter into a platform agreement with DASTA and is also required to abide by DASTA Inc.’s Terms of Use which includes additional guidelines that must be abided by.
Once a Model Portfolio is active on the DASTA App, DASTA will supervise and monitor the trading activity of the Model Portfolio. DASTA maintains an internal quantitative evaluation tool, that evaluates Model Portfolios on a real-time basis to determine whether the Model Portfolio is deviating from its stated objective or has elevated levels of volatility or risk.
Material Risks
The following summary identifies certain material risks that apply with respect to DASTA’s advisory services, the use of the DASTA App and certain common risks associated with mirroring one or more Model Portfolio. The below should be carefully evaluated before investing through the DASTA App; however, the following does not intend to identify all possible risks of an investment through the DASTA App or of Dubbing a Model Portfolio or provide a full description of the identified risks.
While DASTA will conduct initial and ongoing due diligence reviews on Model Portfolios, DASTA Users are encouraged to research and understand the investment strategies and related risks of Model Portfolios, prior to Dubbing them.
Certain Limitations on DASTA’s Advisory Services. The DASTA App will provide DASTA Users with information and tools to allow users to research opportunities and better understand an investment’s risks, time horizon, and expected returns, among other things. DASTA does not purport to provide DASTA Users with comprehensive investment advice, and DASTA’s services to DASTA Users are subject to a number of limitations. The User Profile and resulting risk score is developed solely on information provided by DASTA Users. Accordingly, the DASTA App’s ability to provide suitability analysis will depend upon DASTA Users providing accurate and complete information, and to update such information on an ongoing basis to the extent it becomes inaccurate. Inaccuracies or omissions in the algorithm will have a materially adverse effect on the DASTA App’s ability to analyze whether a DASTA User’s risk tolerance is in line with any given Model Portfolio.
Activities of Model Portfolios and Users. DASTA will seek to make available only Model Portfolio with the highest level of integrity. While the DASTA App may place limits on the types of strategies and investments offered by certain Model Portfolios, DASTA will not have strategic control over the day-to-day investments decisions made by creators of such Model Portfolios.
Dependence and Reliance on Model Portfolio creators. The performance of the Model Portfolios will be highly dependent upon the expertise and abilities of the Model Portfolio’s creator, and, therefore, the death, incapacity or retirement of any of their respective portfolio creators may adversely affect investment results.
Nature of Investments. Users that create Model Portfolios have broad discretion in making investments on behalf of their respective Model Portfolio(s), and investments could include a wide spectrum of publicly available financial instruments. Many of these instruments and other assets will be subject to significant business, financial market or legal uncertainties. There can be no assurance that a User that creates a Model Portfolio will correctly evaluate the nature and magnitude of the various factors that could affect the value of, and return on, model portfolio investments. Prices of the financial instruments acquired for a model portfolio may be volatile, and a variety of factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of the portfolio and the value of investments. No guarantee or representation is made that the investment objective of any or all Model Portfolios will be achieved. Although the Model Portfolio Creators may attempt to mitigate market risk, there will be a significant degree of market risk relating to these investments.
Multiple Model Portfolio. To the extent that a DASTA User were to allocate capital among multiple Model Portfolios, each of which makes their trading decisions independently, it is theoretically possible that one or more of such Model Portfolio may, at any time, take positions that may be opposite of positions taken by other Model Portfolios. It is also possible that the Model Portfolio may on occasion be competing with other Model Portfolios for similar positions at the same time.
Equity Securities. Model Portfolios primarily invest in equity securities. The value of equity securities fluctuates in response to issuer, political, market, and economic developments. Fluctuations can be dramatic over the short term as well as long term, and different parts of the market and different types of equity securities can react differently to these developments. For example, large cap stocks can react differently from small cap stocks, and "growth" stocks can react differently from "value" stocks. Issuer, political, or economic developments can affect a single issuer, issuers within an industry or economic sector or geographic region, or the market as a whole. Changes in the financial condition of a single issuer can impact the market as a whole. Terrorism and related geo-political risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on world economies and markets generally.
Illiquid Instruments. A Model Portfolio may invest in relatively illiquid portfolios for their model portfolios. Certain instruments may have no readily available market or third-party pricing. Reduced liquidity may have an adverse impact on market price and DASTA’s ability to sell particular securities when necessary to meet liquidity needs or in response to a specific economic event, such as the deterioration of creditworthiness of an issuer. Reduced liquidity in the secondary market for certain securities may also make it more difficult for an DASTA User to obtain market quotations based on actual trades for the purpose of valuing a fund’s portfolio.
Non-U.S. Securities. Foreign securities, foreign currencies, and securities issued by U.S. entities with substantial foreign operations can involve additional risks relating to political, economic, or regulatory conditions in foreign countries. These risks include fluctuations in foreign currencies; withholding or other taxes; trading, settlement, custodial, and other operational risks; and the less stringent investor protection and disclosure standards of some foreign markets. One or more of these factors can make foreign investments, especially those in emerging markets, more volatile and potentially less liquid than U.S. investments. In addition, foreign markets can perform differently from the U.S. market.
REITs. REITs in which a Model Portfolio may invest are affected by underlying real estate values, which may have an exaggerated effect to the extent that REITs in which a Model Portfolio invests concentrate investments in particular geographic regions or property types. Investments in REITs are also subject to the risk of interest rate volatility. Further, rising interest rates will cause investors in REITs to demand a higher annual yield from future distributions, which will in turn decrease market prices for equity securities issued by REITs. REITs are subject to risks inherent in operating and financing a limited number of projects because they are dependent upon specialized management skills, and have limited diversification. REITS depend generally on their ability to generate cash flow to make distributions to investors.
Digital Assets. Model Portfolios may invest in cryptocurrencies as well as digital tokens, coins or similar assets that are issued in respect of certain blockchain initiatives (collectively, “Digital Assets”). Ongoing and future regulatory actions by U.S. and foreign jurisdictions may have a materially adverse effect on the value of Digital Assets. For example, future regulatory actions or policies may limit the ability to exchange Digital Assets or utilize them for payments. Many Digital Assets operate using a “private key,” which are a randomized set of numbers and/or letters that are similar to a password. The loss of a private key would lead to a complete loss of access to the corresponding Digital Assets. Digital Assets are an appealing target to hackers or malware distributors seeking to destroy, damage or steal Digital Assets. Digital Assets held in accounts at Digital Asset exchanges are not deposit accounts and these accounts are not insured by the Federal Deposit Insurance Corporation.
Arbitrage Transaction Risks. If the requisite elements of an arbitrage strategy are not properly analyzed, or unexpected events or price movements intervene, losses can occur. Moreover, arbitrage strategies often depend upon identifying favorable “spreads”, which can also be identified, reduced or eliminated by other market participants.
Hedging. There can be no assurances that a particular hedge is appropriate, or that certain risk is measured properly. Further, while a DASTA User account may enter into hedging transactions to seek to reduce risk, such transactions may result in poorer overall performance and increased (rather than reduced) risk for the investment portfolio(s) than if the DASTA User did not engage in any such hedging transactions.
International Investing. A Model Portfolio may invest assets into non-U.S. securities. Investing outside the United States may involve greater risks than investing in the United States. These risks include: (i) less publicly available information; (ii) potential lack of uniform accounting, auditing and financial reporting standards; (iii) varying levels of governmental regulation and supervision; and (iv) the difficulty of enforcing legal rights in a non-U.S. jurisdiction and uncertainties as to the status, interpretation and application of laws. The transaction costs of buying and selling non-U.S. securities, including brokerage, tax and custody costs, may be higher than those involved in U.S. transactions. Furthermore, many non-U.S. financial markets, while generally growing in volume, have, for the most part, substantially less volume than U.S. markets, and securities of many non-U.S. companies are historically less liquid and their prices historically more volatile than securities of comparable U.S. companies. The economies of individual non-U.S. countries may also differ favorably or unfavorably from the U.S. economy.
Issuer-Specific Changes. Changes in the financial condition of an issuer or counterparty, changes in specific economic or political conditions that affect a particular type of security or issuer, and changes in general economic or political conditions can increase the risk of default by an issuer or counterparty, which can affect a security's or instrument's value. The value of securities of smaller, less well-known issuers can be more volatile than that of larger issuers. Smaller issuers can have more limited product lines, markets, or financial resources.
Lack of Diversification. Model Portfolios will at times not be diversified among a wide range of types of securities, countries or industry sectors. Accordingly, client portfolios are subject to more rapid change in value than would be the case if the relevant DASTA User accounts maintained a wider diversification among types of securities and other instruments, geographic areas or sectors.
Relative Value Risk. In the event that the perceived mispricing underlying an investor’s relative value trading positions were to fail to converge toward, or were to diverge further from, relationships expected by the investor (or the creator of a Model Portfolio), DASTA User accounts may incur a loss.
Short Selling Risk. With respect to Model Portfolio that engage in short selling in respect of a model portfolio, any investment program that includes short selling involves a significant amount of risk. Short selling transactions expose the investor to the risk of loss in an amount greater than the initial investment, and such losses can increase rapidly and without effective limit. There is the risk that the securities borrowed by an investor in connection with a short sale would need to be returned to the securities lender on short notice. If such request for return of securities occurs at a time when other short sellers of the subject security are receiving similar requests, a “short squeeze” can occur, wherein the investor might be compelled, at the most disadvantageous time, to replace the borrowed securities previously sold short with purchases on the open market, possibly at prices significantly in excess of the proceeds received earlier.
Quantitative Strategies Risk. Certain Model Portfolios’ investment programs may make considerable use of computer programs and involves highly complex mathematical calculations, such that the purchases or sales of investments for the model portfolio will be in accordance with computer-generated trades. Even if a Model Portfolio Creator seeks to carry out such computer-generated calculations correctly, there can be no assurance that it will successfully be able to do so, nor does the use of a computer in collating information and operating a trading method assure the success of any such method. Errors, including but not limited to, inaccuracies in or corruption of data underlying trading algorithms, may occur with such complex calculations and computer programs which may be difficult to detect, and could have a material adverse effect on client profits. The magnitude of the effect of such errors may be exacerbated when the program results in a significant number of trades being executed over a short period of time. Furthermore, highly successful strategies and programs may become outdated over time, even before relevant a creator of a Model Portfolio is able to recognize the shift and prevent substantial loss.
There may be times when human beings must alter, correct or update the data, models, or calculations used. The complexity of the programs used may make it more difficult for a creator of a Model Portfolio to detect any source of failure or error in such programs before material losses occur.
Cyber Security Breaches, Identity Theft and Fraud. DASTA’s information and technology systems may be vulnerable to damage or interruption from computer viruses, network failures, computer and telecommunications failures, security breaches, power outages and catastrophic events such as fire, tornadoes, flood, hurricanes and earthquakes. The failure of these systems could cause significant interruptions in DASTA’s operations and result in a failure to maintain the security or privacy of certain client information. In addition, DASTA is subject to the risk of fraud. While DASTA may deploy systems and procedures to detect such fraud, it may not be effective in preventing the risk of fraud in all circumstances.
Item 9 Disciplinary Information
This Item is not applicable.
Item 10 Other Financial Industry Activities and Affiliations
DASTA Financial LLC
An affiliate of DASTA, DASTA Financial LLC, maintains membership with the Financial Industry Regulatory Authority (“FINRA”) as a registered broker dealer.
Apex Clearing Corporation (“APEX”)
Clearing Broker. Certain Principals of APEX have entered into SAFE agreements with DASTA Incorporated., the parent company of DASTA Financial, LLC. APEX provides execution and clearing services to DASTA through a directed brokerage arrangement. This relationship may create an incentive to select APEX for brokerage services in respect of the execution and clearing services APEX provides. The APEX relationship is managed by several DASTA executives.
DASTA Investors
A limited number of Users have invested in DASTA Incorporated, the parent company of DASTA. DASTA may offer Model Portfolios that track such investors publicly shared portfolios. These relationships may create an incentive to highlight certain Model Portfolios over others or provide favorable terms to such investors. To mitigate a potential conflict, DASTA does not recommend any Model Portfolio in the DASTA App and will maintain an independent diligence process and procedure for determining portfolios to track as part of the Model Portfolio program.
Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading
DASTA has adopted a Code of Ethics (the “Code”) that obligates DASTA and its access persons to put the interests of DASTA’s clients before their own interests and to act honestly and fairly in all respects in their dealings with clients. In addition to compliance with DASTA’s policies and procedures, all of DASTA’s personnel are required to comply with applicable federal securities laws. Users or prospective Users may obtain a copy of the Code by contacting Justin Ramirez (DASTA’s Chief Compliance Officer) at Justin@dubapp.com. See below for further provisions of the Code as they relate to the preclearing and reporting of securities transactions by DASTA’s access persons.
DASTA, or its related persons, in the course of their investment management and other activities (e.g., implementing, troubleshooting and monitoring the DASTA App and model portfolios), may come into possession of confidential or material nonpublic information about expected trading patterns of the Model Portfolio Creators and about issuers, including issuers in which DASTA or its related persons have recommended to DASTA Users or invested. DASTA maintains and enforces written policies and procedures that prohibit the communication of such information to persons who do not have a legitimate need to know such information and to assure that DASTA is meeting its obligations to its clients and remains in compliance with applicable law. DASTA may possess certain confidential or material, nonpublic information that, if disclosed, might be material to a decision to buy, sell or hold a security, but DASTA will be prohibited from communicating such information to the client or using such information for the client’s benefit. In such circumstances, DASTA will have no responsibility or liability to the client for not disclosing such information to the client (or the fact that DASTA possesses such information), or not using such information for the client’s benefit, as a result of following DASTA’s policies and procedures designed to provide reasonable assurances that it is complying with applicable law.
DASTA requires its access persons to preclear only certain limited offerings and initial public offerings in their personal accounts with the Chief Compliance Officer, who may deny permission to execute the transaction if such transaction will have any adverse economic impact on one or more of the DASTA Users. All of DASTA’s access persons are required to disclose their securities transactions on a quarterly basis. In addition, the DASTA’s access persons are required to disclose the holdings in their personal accounts upon commencement of employment with the DASTA and on an annual basis thereafter. DASTA’s access persons are required to provide broker confirmations of each transaction in which they engage and annual certification of such transactions. DASTA’s access persons are also required to provide quarterly brokerage statements. Trading in the personal accounts of the DASTA’s access persons is reviewed by the Chief Compliance Officer and compared with transactions for client accounts and reviewed against the restricted securities list.
All securities transactions by DASTA Users will execute and settle through a Brokerage Account with the Third Party Broker. Not all investment advisers require their clients to direct brokerage. By directing brokerage to the Third Party Broker, DASTA may be unable to achieve most favorable execution of client transactions. This practice may cost clients more money. Such costs may include higher brokerage commissions (because DASTA may not be able to aggregate orders to reduce transaction costs) and less favorable execution of transactions.
DASTA will not receive research or other products or services other than execution from a broker-dealer or a third party in connection with client securities transactions (referred to as soft dollar benefits).
In directing brokerage to the Third Party Broker, DASTA and its related persons will not receive client referrals from the Third Party Broker.
The DASTA App will review DASTA User allocations that mirror Model Portfolios on an ongoing basis and notify DASTA Users when such allocations are inconsistent with DASTA User’s User Profile. Model Portfolio risk scores are calculated on a real-time basis, and DASTA reviews DASTA User’s User Profiles at least annually. Each DASTA User will receive account reports from the custodian of the account.
DASTA will prompt clients to review their answers to the User Profile questionnaire and restrictions on a quarterly basis. Annually, DASTA will contact clients to determine whether there have been any changes in their financial situation or investment objectives which may result in changes to their prior responses to the User Profile questionnaire.
DASTA’s customer service representatives are available to discuss and explain investment decisions made for Model Portfolios and may be contacted by email at support@dubapp.com or telephone (917) 261-2036.
Item 14 Client Referrals and Other Compensation
This Item is not applicable as DASTA does not receive an economic benefit from any persons for providing investment advice or other advisory services to clients. DASTA and its related persons do not directly or indirectly compensate any persons who is not its supervised person for client referrals.
This Item is not applicable as DASTA will not have custody of DASTA User’s funds or securities.
DASTA offers investment management services on a discretionary basis, in which case DASTA places trades in a DASTA User’s account without contacting the client prior to each trade to obtain the client’s permission.
Through the execution of a Customer Agreement, DASTA’s discretionary authority is solely limited to placing trades in accordance with a Model Portfolio for which a DASTA User has sole discretion to Dub or un-Dub at any time on a self-directed basis.
Item 17 Voting Client Securities
DASTA does not have the authority to vote securities on behalf of DASTA Users. DASTA Users will receive their proxies or other solicitations directly from their custodian. Accordingly, DASTA Users are not able to contact DASTA with questions about a particular solicitation.
This Item is not applicable.
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