PAMM/MAM Plugin for Forex Brokers: A Specification Guide for Multi-Account Management
A PAMM/MAM deployment needs a specification that developers, risk and compliance can all read. This guide covers the sections it should contain and the tests that prove it works.
Model selection
Specify PAMM (pooled master account with investor shares) or MAM (separate accounts with allocated orders). The choice determines data model, reporting and regulatory treatment. Compare with copy trading.
Allocation specification
Define methods (equity, balance, lot, percentage), rounding, minimum lot handling, partial fills and rejections. Include worked examples with odd numbers.
Fee engine
Define management and performance fees, calculation periods, high-water mark, payout timing and treatment of deposits and withdrawals within a period. Provide a test dataset with expected results.
Investor interfaces
Specify what investors see: share, performance, fees, positions and statements, and how they join and leave. Specify investor-side limits such as maximum drawdown.
Integration
Specify the interfaces to the trading platform, CRM and payment flows, including permissions and failure handling. See our Manager API page and the terminal architecture.
Acceptance tests
- Allocation correctness across account sizes.
- Fee calculation across periods with deposits and withdrawals.
- Investor join and exit mid-position.
- Reconciliation with CRM balances.
- Failure and recovery.
Obtain regulatory advice before launch.
Worked example to include
Include an example with three investors of different sizes, a master order with an odd lot size, a partial fill and a withdrawal mid-period, and show the expected allocation, fees and balances at each step.
Developers, risk and compliance can all review one concrete example more easily than abstract rules.
Model selection by data model
Select PAMM when investors should share one pooled result with proportional shares; select MAM when each investor needs a separate account with their own statements and limits. Write the entity model: for PAMM, pool account, investor, share ledger, period; for MAM, manager, investor account, allocation rule, order allocation.
The choice drives the fee engine, reporting and controls, so settle it before evaluating vendors.
Allocation and fee engine specification
| Element | Specification |
|---|---|
| Share unit | Equity per share, issue and redeem rules |
| Deposit or withdrawal timing | Immediate, period end or queued |
| Fee base | Profit above high-water mark per investor |
| Fee timing | Per period, on withdrawal or both |
| Rounding | Defined step and rule |
| Partial fills | Pro rata to shares or accounts |
| Reconciliation | Pool vs ledger; master vs allocated |
Give each row a worked example with numbers and compare vendor output against hand calculations.
Investor interfaces and integration
Investor interfaces must show balance, share value or account state, deposits, withdrawals, fees and performance with definitions. Integrate with the CRM for identity and documents, with the platform for balances and orders, and with payments for funding.
Define the system of record for each field and test cross-system consistency.
Acceptance tests
Include mid-period deposit and withdrawal, high-water mark crossing, partial fills, manager fee change, investor exit and statement reconciliation. Keep a worked example with three investors of different sizes, an odd master order and a mid-period withdrawal as the canonical regression case.
See our terminal guide for allocation tooling.
Worked example: high-water mark
An investor’s share value rises from 100 to 110, falls to 104 and then rises to 112. A performance fee applies only to gains above the high-water mark of 110, so the fee on the move to 112 is on 2 units, not on the 8 recovered from 104. Specify and test exactly this sequence.
Add mid-period deposit variants, because each deposit changes the base on which the fee is computed.
Statement design
Statements show opening, flows, performance, fees and closing balances with definitions and a reconciliation line. Test statements against ledger totals for several investors and periods.
Operational runbooks
Write runbooks for period close, fee calculation, investor onboarding and exit, manager change and error correction. Each lists steps, checks, approvers and evidence. Practise the period close in staging with realistic data before the first live period.
Well-practised close procedures reduce errors in statements, which are the most visible output of the service.
Frequently asked questions
How do I choose between PAMM and MAM?
By whether investors need a pooled share or separate accounts, and by what you can operate and evidence.
How should fees be tested?
With worked examples including high-water mark and mid-period flows compared against system output.
What should investors see?
Balance, deposits, withdrawals, fees and performance with definitions.
Which acceptance cases are essential?
Mid-period flows, partial fills, high-water mark, investor exit and reconciliation.