kavim.io/compliance

Art Allocation
Documentation Framework

Powered by Kavim Art Index

Version 1.1 · May 2026
Aligned with KAI Methodology v1.1 (May 2026) · Coverage universe: 120 blue-chip artists

This framework provides institutional allocators, advisors, and compliance officers with a structured methodology for documenting art allocation decisions. It is designed to support AML due diligence requirements, MiFID II suitability documentation, and ESG / alternative asset reporting obligations. All market readability assessments reference the Kavim Art Index (KAI) — a composite score measuring momentum, liquidity depth, and participation breadth across 120 blue-chip artists in active coverage. Methodology: kavim.io/index/methodology

Regulatory Scope
AML / Anti-Money Laundering (EU 5th AMLD — Art Market Participants)
MiFID II — Suitability documentation for alternative asset recommendations
AIFMD — Alternative asset reporting and illiquid asset classification
Document Structure
Section 1 — Market Context AssessmentKAI score · regime · readability state at decision date
Section 2 — Artist-Level AssessmentVerdict · evidence quality · orderly and conservative estimates
Section 3 — Portfolio-Level AssessmentConcentration · liquidity profile · fragility score
Section 4 — Decision DocumentationRationale · risk factors · review trigger conditions
Section 5 — Authorisation & Sign-offPortfolio Manager and Compliance Officer sign-off
Section 1 — Market Context Assessment

Record the state of the art market at the date of the allocation decision, using Kavim Art Index data.

KAVIM ART INDEX (KAI)· kavim.io/index
Score at decision date — enter values from the Kavim terminal
KAI Components
MOM
Momentum
Price trajectory of the coverage universe relative to verified transaction anchors
LIQ
Liquidity
Proportion of liquid vs semi-liquid artist markets within the 120-artist coverage
BRD
Breadth
Distribution of positive market participation across the coverage universe
Regime Alignment
Expansion
Broad participation, rising momentum. Supportive of new allocation.
Consolidation
Digesting prior gains. Selective allocation warranted. Monitor concentration.
Contraction
Momentum weakening. Reduce exposure. High caution required.
Fragmentation
Coverage diverging significantly. Monitor only. No new allocation.
Data SourceKavim Art Index · kavim.io/index · Methodology: kavim.io/index/methodology
All KAI data is indicative. Scores are generated from verified auction transactions. Not investment advice.
Section 2 — Artist-Level Assessment

Complete one block per artist position. Attach Kavim Committee PDF export as Annex A.

Position 1
Ticker
Supportable
Indicative
Extrapolated
Strong
Moderate
Weak
Active
Limited
Stale
Position 2
Ticker
Supportable
Indicative
Extrapolated
Strong
Moderate
Weak
Active
Limited
Stale

Duplicate position blocks as required. Kavim Committee PDF export must be attached as Annex A.

Section 3 — Portfolio-Level Assessment

Aggregate risk profile across all positions. Reference Kavim Portfolio module output.

Liquidity Profile
LIQUID
Active auction markets
SEMI-LIQUID
Infrequent comparable sales
LOW LIQUIDITY
Stale or restricted coverage
Kavim Portfolio Read
Structurally resilient
Constructive, but concentrated
High correlation risk
Fragile — reduce exposure
Section 4 — Decision Documentation

Document the investment rationale and conditions for review.

Decision Type
New allocation
Increase existing position
Reduce / exit position
Hold — no action
Monitor only
Review Trigger Conditions
Artist enters Stale state (LVP age >18 months)
KAI drops below 30
Regime shifts to Contraction or Fragmentation
Concentration exceeds 40% in single position
Section 5 — Authorisation & Sign-off

All allocation decisions require dual sign-off from Portfolio Manager and Compliance Officer.

Portfolio Manager
Compliance Officer
Compliance Checklist

Compliance Officer confirms all items verified before sign-off.

AML / KYC
Source of funds documented
Provenance of artwork(s) verified
Seller due diligence completed
PEP screening conducted
Suitability (MiFID II)
Client risk profile confirmed
Kavim verdict consistent with mandate
Concentration within thresholds
Liquidity matches requirements
Documentation
Committee PDF attached (Annex A)
KAI score at decision date noted
All position blocks completed
Review triggers documented
Annex A — Required Attachments
Kavim Committee PDF export (kavim.io/app → Committee → Export PDF)
Kavim Portfolio snapshot PNG (kavim.io/app → Portfolio → PNG)
Additional supporting documentation (auction records, expert opinions)

Kavim Art Allocation Documentation Framework v1.0 · April 2026. All Kavim assessments are indicative only and do not constitute investment, legal, or compliance advice. Institutions are responsible for regulatory compliance in their jurisdiction. kavim.io/compliance · kavim.io/index/methodology

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