High-water marking is applied to prevent the profit based fee from being applied where a cumulative loss exists for the look-back period as at the quarterly billing dates.
High-water marking keeps track of cumulative losses per billing period taking into account the balances on the previous look-back dates. For SPP HarvesterTM, this High Water Mark is a 4 quarter look back period. A loss in any of the previous 4 quarters will be added to the look-back period's cumulative losses. A gain in any period will decrease the cumulative loss recorded to date.
This is designed to ensure that no profit-based fees are applied to Members who have experienced a net loss in the previous 4 quarters.