Asset Selection Framework

Axis's asset-selection framework defines three fail-closed gates. A candidate must satisfy all three before it is eligible for strategy use; missing, inconsistent, or failed evidence keeps it out of the eligible set.

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Asset selection framework: a candidate asset must pass readiness, economics, and risk-clearance gates. Passing all three makes it eligible for strategy review; a failed or missing check excludes it.

Fail-closed rule: failed or missing evidence at any gate means the asset is excluded.

Gate	Public decision question	If evidence fails
1. Readiness	Can the asset be identified, traded, hedged, transferred and monitored through supported systems?	Exclude the asset
2. Economics	Is liquidity observable across venues, and can the opportunity plausibly survive funding and execution costs?	Exclude the asset
3. Clearance	Are integrity, structural, compliance, concentration and operational risks within the approved framework?	Exclude or remove the asset

Gate 1: Market, hedge, and operational readiness

The first gate asks whether the asset has observable multi-venue liquidity, a workable hedge, reliable data and automated monitoring inputs, and operational support for trading and transfers. Identity and compliance checks for relevant counterparties or venues are also part of readiness.

Gate 2: Liquidity and funding economics

The second gate tests whether documented volume, order-book conditions, funding behavior, and expected execution economics can support the intended trade. A visible spread is not enough if it cannot be captured after costs and market impact.

Gate 3: Exclusion conditions

The final gate checks for conditions that should block or remove an asset, including integrity, liquidity, hedge, compliance, or operational failures. Exclusion is fail-closed: the strategy does not rely on an unresolved exception being harmless.

Evidence and ongoing checks

The framework considers evidence such as:

• liquidity across more than one venue;

• documented volume and funding behavior;

• an identified hedge and monitoring path;

• KYC or equivalent counterparty onboarding where applicable;

• controlled asset-transfer procedures;

• data and market-integrity checks;

• automated signals that can identify deteriorating conditions.

Internal thresholds, alert levels, and escalation triggers can change with market conditions.

Residual risk

An asset can pass every gate and still fail later. Liquidity can disappear simultaneously across venues, the hedge relationship can break, data can become stale, transfers can be blocked, or an issuer, venue, or counterparty can fail. Ongoing monitoring and the ability to exclude an asset reduce exposure but cannot eliminate loss.