Trading Headroom Guidance

Schedule 1 of the Terms says expressly that Trading Headroom and Earning Cap sizing is not part of the Fee Schedule and is published separately. This is that document.

It is deliberately separate. Headroom is not something you buy, and keeping the methodology out of the fee document is how we keep that distinction visible.

1. What Trading Headroom is

Your Trading Headroom Limit is the maximum negative SILVA balance your account is permitted to hold. It is expressed as a negative SILVA figure, and it is a hard floor: the ledger refuses any transaction that would take you past it.

It is the operational expression of your permitted participation in the network's mutual credit. When your balance is negative you have, in net, received value from other Members and owe equivalent value back to the network. Silvatree is the ledger keeper of that obligation. It is not a loan, a line of credit, an overdraft or any other credit facility, and Silvatree is not your lender (Clauses 2.4 and 7.1(c)).

Headroom is not a monthly allowance and it does not reset on the calendar. It replenishes as you sell — every sale extinguishes an equivalent amount of what you owe the network.

No interest and no charge of any kind ever arises on a negative SILVA balance (Clauses 5.5 and 7.6).

2. How the initial Limit is sized

Your initial Trading Headroom Limit is set during the Suitability Call, by reference to your Declared TAE — the proportion of your Total Acceptable Expenses you elect to route through the platform over the following twelve months.

Trading Headroom Limit (SILVA) = max( Band Floor, (Declared TAE ÷ 12) × Band Coefficient )

The floor guarantees that every Member, however small their declaration, can make an ordinary small purchase. The TAE-anchored term ensures larger traders have proportionate room to manoeuvre.

2.1 Worked examples, on Band A

The floor stops binding at around £11,000 of Declared TAE. Below that, every Member gets the same SILVA 1,200 regardless of size.

2.2 What the Bands are not

The Bands are a behavioural progression, not a price ladder. Joining Fee, subscription and Transaction Fee are identical at Band A, B and C — moving up a Band costs nothing and buys nothing except Headroom.

You cannot pay to move up a Band. Uplift is earned through time in Good Standing and reciprocal trading depth, which is a measure of how you have behaved in the network rather than the size of your cheque.

This is deliberate. Provisioning more headroom to larger members purely because they are larger is the inverse of how concentration risk should be handled: a single large default exposes the network more than a single small one, not less.

3. How the Limit moves after activation

Adjustments are made on a rules-based, non-discretionary basis against observable trading activity in the network (Clause 7.3). The indicators are:

• Sales velocity — the volume and value of your completed sales over a defined period.
• Reciprocity profile — your buy-to-sell ratio over a defined period.
• Reputation Hand standing — your position under the reputation framework described in Clause 46.4.
• Good Standing — your continued status as a Member in Good Standing as defined at Clause 1.1.
• Band progression — reaching Band B or Band C raises both your coefficient and your floor, and the new figure is applied automatically.

We notify you of any change to your Limit. A change takes effect from the date of that notification, or a later date if the notification specifies one.

3.1 What is never taken into account

Trading Headroom is not granted on the basis of your creditworthiness, and we do not assess it (Clause 7.3(e)).

We do not run credit reference searches on your business, your directors, your partners or your owners. We do not use credit scores, credit reference agency data, or any external assessment of your ability to repay. We do not take personal guarantees (Clause 2.8).

Adjustments are made on the basis of your observable trading activity within the network, and nothing else.

3.2 Decreases

A Limit can be decreased as well as increased — for example where you fall out of Good Standing, or where sustained one-directional buying without corresponding sales indicates the current Limit is no longer appropriate.

A decrease never forces an existing balance into breach. Where your current negative balance is already beyond a reduced Limit, the reduction takes effect as a bar on further purchases until sales bring you back within it. No transaction is unwound and no charge arises.

4. Maximum Trading Headroom Limit

The maximum Trading Headroom Limit applied by the Company is SILVA 25,000, whatever the Band and whatever the Declared TAE.

The maximum exists because the Reserve Fund covers Members in positive positions if the platform winds down, and a single very large negative position is the concentration the Reserve Fund is least able to absorb. It is a network-protection measure, not a judgement about any Member.

This maximum is subject to review by the board of the Company (Clause 7.3(d)). Any change is published here.

5. When a transaction would breach the Limit

The transaction is refused automatically. Enforcement runs at three layers — the application prevents submission, the API rejects the request, and the ledger itself refuses to record it — so the floor holds even if one layer is bypassed (Clause 7.4). The Technical Compliance Statement evidencing this architecture is available on request.

You then have three routes:

1. Accept a smaller transaction that fits within your remaining headroom.
2. Earn SILVA through sales to other Members, which restores headroom pound for pound.
3. Request a Trading Headroom adjustment review under section 7 below.

There is no route that involves paying cash to buy more headroom. Clause 9.2 is explicit that there is no mechanism by which a Member may make up the difference by paying cash to obtain SILVA — from the Company, from another Member, or from anyone else. That is deliberate: it is what keeps headroom a function of trading rather than of spending power.

6. The Earning Cap

Your Earning Cap is the indicative upper bound on your positive SILVA balance. It is the mirror image of the Trading Headroom Limit, and its purpose is to keep SILVA moving: a balance you cannot realistically spend within a sensible period is value sitting idle.

The Earning Cap is not a hard limit. It does not cap what you may sell, it does not block any transaction, and it is not a credit limit (Clause 8.1(b)). It changes how the matching system weights the opportunities it shows you, and nothing else.

6.1 How the Earning Cap is sized

Earning Cap (SILVA) = max( 1,200, Declared TAE ÷ 4 )

That is three months of your own declared spending appetite, with the same SILVA 1,200 floor the Trading Headroom Limit uses.

The band is deliberately wider on the positive side than the negative side — three months of spend against roughly one and a third months of headroom. Holding SILVA carries less risk to the network than owing it, so there is less reason to signal early.

The Earning Cap is confirmed with you at the Suitability Call and is re-set at each periodic review of your Annual Expense Analysis, as your Declared TAE moves.

6.2 What the Earning Cap drives

Your balance, expressed against your Earning Cap, sets your Balance Health zone. The thresholds are published in the Balance Health Zone Definitions.

Being in any zone other than Green is not a breach of the Terms, incurs no fee or penalty, and does not affect your ability to terminate your membership (Clause 8.7).

7. Asking for a review

You may request a review of your Trading Headroom Limit, your Earning Cap or your zone classification at any time, free of charge. There is no limit on how often you may ask.

Write to [email protected], or ask your Trade Broker. We will:

• acknowledge within 5 Business Days; and
• give a substantive response within 20 Business Days.

A review is carried out by a person, not by the AI System, and you are entitled to that human review under Clause 8.6. If we disagree with you, we tell you which indicator in section 3 drove the outcome, so you know what would need to change.

If you are unhappy with the outcome, the complaints procedure at Clause 33 is open to you, and after that the dispute resolution procedure at Clause 40.

8. Transparency

Your current balance, Trading Headroom Limit, Earning Cap and zone are visible to you at all times on your dashboard. We do not operate a limit you cannot see.