Terms & Conditions

Last Updated: August 1, 2022

1. Introduction

Purpose of this privacy policy

These Terms & Conditions apply for your use of the Platform and the Services provided by MasterExchange AB, a Swedish limited liability company with reg.no 559360-7681 having its registered address at BOX 107, 18205, Djursholm, Sweden ("MasterExchange") and constitutes the agreement between you and MasterExchange. The Privacy Policy and the Platform Rules constitutes an integral part of the Terms & Conditions.

By signing up to become a User via [masterexchange.com] and creating an account, you will get access to the Platform and the Services. The master rights available on the Platform represent the official original recording of a Piece of Music and are issued on the Platform in the form of Fractions. Each Fraction represents a specific sequence of a specific Piece of Music, and each Fraction is consequently unique and non-fungible in every and all aspects.

In order to use the Services, you must first read and accept, as may be amended from time to time, (i) these Terms & Conditions, and (ii) the Payment Service Provider Terms and Conditions.

It should be noted that the Fractions are not considered financial instruments, and consequently, investing or trading in the Fractions will not be subject to any consumer protection rules typically applied for products or services on the securities markets. You should be aware that MasterExchange is not regulated by any supervisory authority for the purpose of the rules regulating the securities market or any similar rules.

2. Definitions

"Agreement" shall mean the Terms & Conditions

"Closely Related Party” shall mean with respect to a User (i) an undertaking within the same group of undertakings as the User; (ii) the spouse or co-habitee of the User; (iii) children of the User who are in the custody of the acquiring party; (iv); and (v) a party who cooperates with the User for the purpose of achieving control over the Fractions for a certain Piece of Music

"Fraction" shall mean fractionalised unique digital ownership of a Music Master Right, each fraction representing 0.1% ownership of the master rights of an official original recording of a Piece of Music

"Inside Information" shall mean any information of a precise nature that has not been made public, relating, directly or indirectly, to one or more Fractions, and which, if it were made public, would be likely to have a significant effect on the prices of those Fractions

"Issuer" shall mean the issuer of Fractions in connection with an initial offer on the Platform

"Originator" shall mean the  holder of the master right prior to the date the Fractions of such master right were issued on the Platform

"Piece of Music" shall mean a song, sound, or performance

"Platform" shall mean the trading platform operated by MasterExchange

"Platform Rules" shall mean the operator rules for trading on the Platform

"Privacy Policy" shall mean the Privacy Policy of MasterExchange [https://policy.masterexchange.com/privacy.pdf], as may be amended from time to time

"Royalty Payment" shall mean the payment a User is entitled to by virtue of holding a Fraction. The Royalty Payment corresponds to the net sum of the pay-outs the [collective management organisation or distributor] has collected for the corresponding master right after deduction of any third-party fees or charges and which have been duly transferred to and received by [MasterExchange or a partner of MasterExchange].

"Services"
shall mean the services offered by MasterExchange on the Platform, and on [masterexchange.com]

3. Eligibility and account creation

Purpose of this privacy policy

To be eligible for registration as a User, you must be at least [eighteen (18)] years old, have legal capacity under the laws of the jurisdiction of your residency. You may not be subject to any guardianship or similar limitation in terms of your legal capacity. You must be a resident of a member state within the EU/EEA or a resident of the United Kingdom.

To access the Platform and the Services you need to create an account and you must thereby provide the following information:

  • First name
  • Surname
  • E-mail
  • Nationality
  • Country of Residence
  • Birthdate
  • Passport information
  • Liveness (computer visio) identity check
  • Password

4. Obligations of the User

Purpose of this privacy policy

By accepting the Terms & Conditions, you accept and acknowledge that:

  1. The information provided when signing up and registering your account at [masterexchange.com], or information provided to MasterExchange upon request, including but not limited to information about your name and other personal information, are true, up to date and correct in any and all aspects.
  2. The Services may only be used for legitimate purposes, and you will only use the Services in accordance with the Terms & Conditions, applicable laws and MasterExchange's guidelines, and you will not use the Services in any fraudulent, disruptive, or abusive behaviour.
  3. You shall not use any robot, spider, scraper, data mining tools, data gathering, and extraction tools, or other automated means to access the Service for any purpose, except with the prior written approval from MasterExchange.
  4. You shall not share personal, confidential, or private information that belongs to others.

5. The Platform

About the Platform

The Platform is a marketplace for investing and trading in master rights. As a User you will be able to invest in Fractions, each representing a specific sequence of a specific Piece of Music and thereby become the actual owner of the master right attributable to this sequence. As the holder of a Fraction, you will also be entitled to Royalty Payments, if any, attributable to the pro rata share of the master right that the Fraction represents.


Initial offering

When a new Fraction is about to be issued on the Platform, MasterExchange conducts a due diligence of the Piece of Music, the Issuer and the Originator (where the Originator and the Issuer are not the same person). The Issuer decides on the price to be set at the initial offering of the Fractions at the Platform.

Before you place an order in connection with an initial offering of Fractions on the Platform, you should always read and make sure to understand the [Whitepaper/Information brochure] of the Fractions to be issued in order to make an informed investment decision.

Trading

Trading on the Platform may be done in two different ways. You may either (i) place your orders to buy or sell Fractions of a particular Piece of Music on the market, a "Market Offer", or (ii) make a direct bid to buy one or more specifically identified Fractions directly from the holders of such Fractions, a "Direct Bid".

As each Fraction represents a unique sequence of a Piece of Music, some Users may want to collect a series of sequences to own a particular part of a Piece of Music. To be able to build your own series of Fractions you can simply point out the Fractions you want to purchase and make a bid to the holders of those Fractions, regardless of whether those particular Fractions have been offered on the market through a Market Offer or not. The holders of those Fractions will be able to accept or reject your Direct Bid or make a counteroffer.

If you are a holder of a Fraction and receives a Direct Bid, you may choose to block the bidder from more Direct Bids.

If you are not interested in creating your own series of Fractions and just want to invest in whatever Fraction of a Piece of Music that is currently available, you may simply put a Market Offer to buy any Fraction of a particular Piece of Music that is available at the market at the time. And vice versa if you want to sell your Fraction on the market.

The contract to buy and sell Fractions is made solely between the buyer and seller and MasterExchange is not part of that contract.

Order depth and information on price, volume, time, and type of transactions executed (Market Offer or Direct Bid) are presented on [masterexchange.com]. More information on the rules and procedures for trading are found in the [link to Platform Rules].

Public bid

Where a User that holds less than 50 per cent of the Fractions issued for one Piece of Music acquires Fractions, alone or together with another Closely Related Party, and thereby attains a holding of more than 50 per cent of the Fractions issued for one Piece of Music ("PB Threshold"), such User is required to make a public bid for the remaining outstanding Fractions issued of that Piece of Music within [20] days following the date when the PB Threshold was met. If the User sells Fractions so that the User holds less than 50 per cent of the Fractions issued for that Piece of Music within the [20] days period, such User shall not be required to make a public bid for the remaining outstanding Fractions issued of that Piece of Music. MasterExchange may provide exemptions for some Users from the public bid requirement.

Drag along

By accepting the Terms & Conditions, you accept and acknowledge that where a User acquires 90 per cent or more of the Fractions issued for one Piece of Music, the remaining outstanding Fractions issued of that Piece of Music except for any Fractions held by the Originator, will automatically be acquired by that User for a price equal to the maximum of either the average price of the last 5, 10, 100, 500 or 1000 fractions (or more sold), whether or not the Fractions have been offered on the market or not. This includes your Fractions, if you are a holder of one or more of the remaining Fractions. 


Market abuse

Fractions are not covered by the requirements of the Market Abuse Regulation or any similar laws on market abuse. However, in order to ensure the orderly trading on the Platform, MasterExchange has implemented measures and procedures in order to detect and prevent market abuse on the Platform.

If you obtain Inside Information, you must immediately contact MasterExchange at compliance@masterexchange.com and inform MasterExchange of the nature of such Inside Information. You are not allowed to acquire or dispose of Fractions for which you have Inside Information, neither directly nor indirectly and neither for your own account nor for the account of a third party.

You may not recommend, on the basis of Inside Information, that another person acquires, disposes, cancels an order, or amends an order regarding Fractions to which that Inside Information relates to, and you shall not disclose Inside Information to anyone except MasterExchange.

You may not place or execute orders that gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a Fraction; or place or execute orders that sets, or is likely to set, the price of one or several Fractions at an abnormal or artificial level. Notwithstanding the aforementioned, it should be noted that buyers are free to negotiate the price for one or more Fractions with a seller directly through a Direct Bid, even where the price for such Direct Bid deviates from the price for Fractions of the same Piece of Music in connection with Market Offers.

If you fail to comply with the above-mentioned market abuse requirements, MasterExchange, in its sole and absolute discretion, may suspend you from, or restrict your use of the Services and/or access to the Platform with immediate effect, including, but not limited to, cancelling and/or terminating orders placed and/or executed, and terminating the agreement and User account.

More detailed information on the measures and procedures taken by MasterExchange in order to prevent market abuse is found in the AML policy [https://policy.masterexchange.com/aml.pdf].

Communication and login

The communication between you and MasterExchange will take place directly on [masterexchange.com]. However, MasterExchange may also direct messages via e-mail or other communication. All communication will be in [English or Swedish].

You may access the Platform via [masterexchange.com] where you login via your unique password. You should keep your password confidential at all times. If you believe that the confidentiality of your password has been compromised in any way, you should try to change your password and contact MasterExchange as soon as possible at [contact@masterexchange.com] to avoid abuse of your account.

You are responsible for the information you provide on [masterexchange.com].

6. Transfer of SYNC

Since the master rights are fractionalised, each holder of a Fraction is entitled to certain rights connected to the master right, such as the right of sync. The right of sync means the right to decide on any re-recording of a Piece of Music.

By accepting the Terms & Conditions, you accept and acknowledge that you will irrevocably transfer any right to decide or vote on sync, in relation to any Fraction held by you, to MasterExchange.

7. Risks

Investing in the Fractions will be associated with risking your capital. Past performance is no guarantee for future performance and the value of a Fraction may both increase and decrease. It is not guaranteed that you will get your invested capital back.

Any valuation of the Fractions in connection with the initial offering is solely an estimate and may deviate significantly from the actual market price once the Fractions are being traded on the Platform. If you place an order in connection with the initial offer of Fractions, you will risk losing your invested capital.

The liquidity in the Fractions may vary from time to time, and there are no guarantees that there will be any buyer for your Fractions in the foreseeable future.

The fact that the Fractions are all unique and represents a specific sequence of a Piece of Music means that different Fractions of the same master right representing one and the same Piece of Music could potentially be valued differently (see Market Offer and Direct Bid above). This means that the value of a specific Fraction may be very difficult to assess which could lead to you losing your invested capital.

The value of a Fraction will partly or wholly depend on the revenue performance of the Piece of Music it represents, and the royalties collected as compensation for the Piece of Music. If the Piece of Music is unsuccessful and no or limited royalties are collected, this will risk having a negative effect on the value of the Fraction.

8. Fees

Market Offer

In connection with a Market Offer, MasterExchange charges the buyer a fee of 1,5 per cent of the purchase amount and the seller a fee of 1,5 per cent of the purchase amount for the execution of the transaction.

Direct Bid

In connection with a Direct Bid, MasterExchange charges the buyer a fee of 1.5 per cent of the purchase amount and the seller a fee of 1.5 per cent of the purchase amount for the execution of the transaction.

Royalty Payments

MasterExchange charges an administrational fee of 1 per cent on all Royalty Payments.

9. Payments

All payments in connection with investing or trading on the Platform, or in relation to any Royalty Payments or other payments in relation to your investments in the Fractions are made through MasterExchange's payment service provider [PAYMENT PROVIDER].

10. Personal data

MasterExchange handles your personal data in accordance with the General Data Protection Regulation (commonly known as "GDPR"), which regulates how personal data should be processed. GDPR aims to protect people from their personal information being treated abusively or otherwise inappropriate.

MasterExchange saves information provided by you when you register, and information provided in connection with completion and/or updating of information. MasterExchange may supplement this information with other private or public records due to a legitimate interest with a legal basis under Article 6 GDPR.

MasterExchange is required to save certain information and in some cases to submit information to authorities in accordance with current laws and regulations. [In addition to these requirements, MasterExchange does not share your personal data with third parties.]

For more information on the handling of personal data, please see MasterExchange's Privacy Policy [https://policy.masterexchange.com/privacy.pdf].

11. Intellectual Property

The Services are legally protected, including copyrights, trademarks, service marks, patents, trade secrets, and other rights and nothing in the Terms & Conditions shall be interpreted as a transfer of any such intellectual property to you.

MasterExchange may be provided with content such as artist or album images, cover artwork, videos, descriptions of artists and songwriters, and other specifications from third-parties.

You are allowed to reproduce content from the Service for your personal use only. If you want to use, reproduce, modify, distribute, or store any of the content from the Services for commercial purposes, you need prior written permission from MasterExchange or the relevant owner of the intellectual property.

12. Amendments

The Terms & Conditions are in place until further notice, and to the date you or MasterExchange chose to terminate the agreement. MasterExchange may change the terms from time to time. Such an update will be communicated to you either via e-mail or by notification through [masterexchange.com].

The changed terms apply to new Users as of the date they are published on [masterexchange.com].

Already existing Users are bound by the amended terms 14 days after notification and publishing on [masterexchange.com].

If a User does not approve the amended terms, the User should terminate the agreement within 14 days of the amended terms published on [masterexchange.com] or after the notice via email.

13. Updates and technical changes

To keep the Services as relevant and functional as possible for you, MasterExchange reserves the right to make changes and updates to the Services without notice or liability.

14. No recommendations or advice

All content and information about Fractions, master rights, songwriters, artists, a Piece of Music's financial performances, listings on charts, or any similar information provided on [masterexchange.com] or otherwise in connection with the Services shall not be understood as investment recommendations, but as informative, educational information intended to be evaluated by you as a User. Past revenue performance of a song should not be construed as indicative of future revenues.

MasterExchange does not make recommendations or offer investment advice and is not responsible for any third-party recommendations or investment advice provided on [masterexchange.com] or otherwise in connection with the Services. All Users of the Services are solely responsible for evaluating the merits and risks associated with the information provided before making an investment decision.

You agree not to hold MasterExchange or any third-party provider liable for any possible claim for damages arising from any decision you make based on information on the Service or elsewhere.

15. Limitation of liability

The Services are provided on an “as is” basis without any warranties. MasterExchange cannot warrant an uninterrupted, or error-free experience when using the Services. No oral or written information or advice from MasterExchange shall be construed as to create a warranty.

MasterExchange makes no warranties or representations regarding the content, information, calculations, or anything else presented on [masterexchange.com] regardless of whether it originates from MasterExchange or not.

MasterExchange or its directors, employees, contractors, or partners are not liable for any damages, including but not limited to, loss of money, goodwill, data, or other intangible losses as a consequence of you using the Services.

MasterExchange assumes no liability or warranty for non-operability or impaired accessibility to the Services due to, but without limitation to, technical difficulties or dependence on the services of third parties.

MasterExchange does not take direct or indirect responsibility for Fractions offered on the Platform. MasterExchange shall not be held liable for any losses incurred by you in connection with investing in or trading in the Fractions.

Any valuation of a Fraction in connection with initial offerings is solely an estimate and shall not be considered as the actual market price and MasterExchange shall not be held liable for any valuation that later proves to deviate, also in cases of significant deviations, from the price the Fractions are actually being traded for.

MasterExchange relies on third-parties such as [collective management organizations and distributors] for the collection of royalties, and neither MasterExchange nor the Originator shall be held liable for any failure to pay Royalty Payments to the User, or delays in such payments, and the User agree to hold both MasterExchange and the Originator harmless from any claims in relation to Royalty Payments, where such royalties have not been duly received by [MasterExchange or a partner of MasterExchange].

The Services may be integrated with third-party applications, meaning applications, websites, and/or services to make available content, products, and/or services. You accept and acknowledge that MasterExchange does not endorse, and is not responsible or liable for the behaviour, features, or content of any third-party application.

16. Dispute resolution

  1. Users (Investors) and Rights holders must resolve disputes themselves, in good faith consultations. MasterExchange may, entirely without obligation, act as an intermediary if Users cannot jointly resolve the matter. Users indemnify MasterExchange from and against claims for compensation of damages by virtue of such decision.
  2. Users (Investors) are obliged to execute the Obligations of the User in accordance with applicable legislation and regulations and these Terms. Rights holders (Originator) are obliged to execute the Master Right Agreement (separate agreement signed by Originator and MasterExchange) in accordance with applicable legislation and regulations and these Terms.

17. Indemnity

MasterExchange will give no indemnity for any loss or other financial burden resulting from your use of the Services. You agree to indemnify and hold harmless MasterExchange and our employees, contractors, agents, officers, and directors, from and against any and all claims, damages, obligations, losses, liabilities, costs or debt, and expenses (including but not limited to attorney's fees), resulting from, or arising out of your use of the Services.

18. Severability and no wavier

If any terms of the Terms & Conditions prove to be invalid for any reason, in full or in part, the remaining terms of the Terms & Conditions will still continue to apply in full.

In the event that MasterExchange fails to exercise or enforce any right or term of the Terms & Conditions, that will not constitute a waiver of such right or term.

19. Complaints and Governing laws

If you are dissatisfied with the Services offered by MasterExchange, you must submit your complaint and any claim for compensation to MasterExchange without delay when you have identified the circumstance to which the complaint relates or when it would be considered on reasonable grounds that you should have identified it.

Any dispute between you and MasterExchange due to the circumstances governed by the Terms & Conditions must be settled by a Swedish court and applying Swedish law. The district court of Stockholm shall be the competent court and the first instance in relation to any dispute regarding this agreement.

MasterExchange may also institute legal proceedings at a court in another country where you are resident or have assets.

20. Force Majeure

MasterExchange assumes no liability or responsibility for failures in providing the Services if they are caused by an event outside MasterExchange's control. These events include, but are not limited to i) weather conditions such as earthquakes, tidal waves, floods, or fire, ii) war, an epidemic or pandemic, hostilities, invasion, embargo, revolution, civil war, riot, strikes, lockouts, acts or threats of terrorism or commotion, iii) failures of systems, public or private telecommunication networks, communication lines, software, hardware or other equipment of the Services or any third-party service provider, or iv) third party force majeure. In case of any event such as these, MasterExchange will notify the User, as soon as possible under the circumstances of the event, of what suitable arrangements we decide to implement.

21. Termination of the service

MasterExchange reserves the right to, in its sole and absolute discretion and without advance notice, change, suspend, restrict, or terminate any aspect, content, or feature of the Services.