How does the fee clawback work on a breach?

“Clawback” means part of a manager’s collected fee returns to investors when the committed rules are breached. The mechanism only has meaning inside the TARAZ structure.

The logic

A performance fee should reward durable, in-rule profit — not a temporary risk that happened to turn out well. The escrow holding makes that logic enforceable.

Conditions and limits

• Clawback draws only on the escrowed part and only on a breach of the committed rules.
• Each account’s exact terms are recorded on that account; read them.
• A fee clawback does not make up for capital losses; it preserves fee fairness only.

Structural details on the TARAZ page and in the TARAZ guide.

Frequently asked questions

Who decides a breach happened? A breach is measured against that account’s committed rules; recording and reporting are transparent and the manager can respond.

How long does a clawback take? The timing is written in that account’s terms; the process is documented and traceable.

What if the escrow has been emptied? Clawback draws only on the escrow balance; this structural limit keeps the risk transparent.

When does a clawback happen? Only when a breach of that account’s committed rules is recorded — not with every ordinary market drawdown. Drawdowns are part of the market and TARAZ’s design knows it; they are not rule breaches. The exact timing and process are in that account’s terms text.

Summary

TARAZ keeps the manager’s incentives aligned with yours — no more, no less. Read the TARAZ guide and “No fees on losses”.

Three clawback limits

• Draws only on the escrowed fee part
• Only on a breach of the committed rules
• Not compensation for capital loss; fee fairness
• Exact terms in that account’s text
• A documented, traceable process

The full clawback logic: See it.