Regulations & Licenses

Markets in Financial


In accordance with MiFID, we are required to provide our clients and potential clients with a summary of its rules:

The next step in the account opening procedure shall be the classification of the prospective Client into one of the following categories:

  • Professional Clients: Clients who possesses the experience, knowledge and expertise to make their own investment decisions and properly assess the risks that they incur
  • Retail Clients: Clients who are not Professional Clients
  • Eligible Counterparties

The following should be taken into consideration in the Client Classification process:

In the case where the Company shall enter into transactions with Eligible Counterparties, the Company is not obliged to comply with the Sections 6.5. and 6.6. of this IOM. However, the Heads of the relevant Departments may, at the request of the Client or with the decision of the relevant Heads, decide to comply with Sections 6.5. and 6.6. of this IOM for a Client classified as an Eligible Counterparty.

The Head of Administration/Back Office Department shall be responsible for the above Client classification procedure. Prospective Clients that satisfy one or more of the following criteria shall be classified as Professional Clients:

A: Entities which are required to be authorized or regulated to operate in the financial markets such us:

  • Credit institutions
  • Investment firms
  • Other authorized or regulated financial institutions
  • Insurance companies
  • Collective investment schemes and management companies of such schemes
  • Pension funds and management companies of such funds
  • Commodity and commodity derivatives dealers
  • Other institutional investors

B: Large undertakings meeting two of the following size requirements, on a portfolio basis:

  • Balance sheet total at least EUR 20.000.000
  • Net turnover at least EUR 40.000.000
  • Own funds at least EUR 2.000.000

C: National and regional governments, public bodies that manage public debt, Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the European Investment Bank and other similar international organizations.

D: Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitization of assets or other financing transactions.

The Company shall recognize an undertaking as an Eligible Counterparty if that undertaking falls within a category of Clients who are to be considered Professional Clients in accordance with points (a), (b) and (c) above.

The Company shall also recognize as Eligible Counterparties undertakings which fall within a category of Clients who are to be considered Professional Clients in accordance with Sections 4.6.1. and 4.6.2. of this IOM. In such cases, however, the undertaking concerned shall be recognized as an Eligible Counterparty only in respect of the services or transactions for which it could be treated as a Professional Client.

Where an Eligible Counterparty requests treatment as a Client whose business with the Company is subject to provisions to ensure investor protection, such us the Company when providing investment services to Clients shall act honestly, fairly and professionally in accordance with the best interest of its Clients (see also Sections 6.1. and 6.6. of this IOM), but does not expressly request treatment as a Retail Client, and the Company agrees to that request, then the Company shall treat that Eligible Counterparty as a Professional Client.

However, where that Eligible Counterparty expressly requests treatment as a Retail Client, the provisions in respect of requests of non-professional treatment specified in points (a), (b) and (c) above shall apply. It should be pointed out to all the Clients that Professional Clients are not covered by the Client Compensation Fund administered by CySEC to which the Company shall subscribe.

Clients other than those meeting the criteria for Professional Clients included above including public sector bodies and private individual investors, may also be allowed to waive some of the protections afforded by the conduct of business rules of the Company.

The Company should therefore be allowed to treat any of the above Clients as professionals provided the relevant criteria and procedures mentioned below are fulfilled.

These Clients should not, however, be presumed to possess market knowledge and experience comparable to that of the Professional Client categories listed in Section 4.6. of this IOM, above.

Any such waiver of the protection afforded by the standard conduct of business regime shall be considered valid only if an adequate assessment of the expertise, experience and knowledge of the Client, undertaken by the Company, gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the Client is capable of making his own investment decisions and understanding the risks involved.

The Fitness Test could be regarded as an example of the assessment of expertise and knowledge.

The Administration/Back Office Department shall implement the Fitness Test in determining the assessment of the expertise, experience and knowledge of the Client.

The Fitness Test applied to managers and directors of entities licensed under European Directives in the financial field could be regarded as an example of the assessment of expertise and knowledge. In the case of small entities, the person subject to the above assessment should be the person authorized to carry out transactions on behalf of the entity.

In the course of the above assessment, as a minimum, two of the following criteria should be satisfied:

  • The Client has carried out transactions, in significant size, on the relevant market at an average of ten (10) per quarter over the previous four (4) quarters
  • The size of the Client’s financial instrument portfolio, defined as including cash deposits and financial instruments exceeds EUR 500.000
  • The Client works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged

The Clients defined above may waive the benefit of the detailed rules of conduct only where the following procedure is followed:

  • They must state in writing to the Company that they wish to be treated as Professional Clients, either generally or in respect of a particular investment service or transaction, or type of transaction or product
  • The Company must give them a clear written warning of the protections and investor compensation rights they may lose
  • They must state in writing, in a separate document from the contract, that they are aware of the consequences of losing such protections

The Head of the Administration/Back Office Department, followed by the MLCO and finally the Managing Director, will need to approve in writing all applications for new Clients. For the abovementioned to approve an application, the application must verify the following:

  • [A] The correctness, authenticity and completeness of the information provided by the applicant
  • [B] The creditworthiness of the applicant, through a database search whenever this deems necessary
  • [C] The probability that the applicant is involved in illegal or criminal activities,
  • [D] The completeness of the required agreement documents

And, reject all applications that:

  • [A] Do not include all the necessary information
  • [B] Involve persons of doubtful creditworthiness or persons that may be involved in illegal or criminal activities
  • [C] Applications where the Client has not promptly provided the information or has done so incompletely

Following the signing by the Managing Director the application shall be forwarded to the Administration/Back Office Department in order to be entered in the Company’s systems.

A copy of the agreement shall be given to the Client and a copy remains at the Company’s records. A copy of the agreement can be provided to the Client at any point of time after his/her request.

With the approval of the Client, the Administration/Back Office Department shall check the relationship with other Clients and include him/her in the group of related/connected Clients, if such a relationship exists.

An investment firm must take all reasonable steps to obtain the best possible result for their clients taking into account price, costs, speed of execution, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.

The Company shall maintain effective and transparent procedures for the reasonable and prompt handling of complaints received from Retail Clients or potential Retail Clients, and to keep a record of each complaint and the measures taken for the complaints resolution. Such procedures and records shall be the responsibility of the Administration/Back Office Department.

The following details shall have to be documented:

  • The identity of the Client who filed the complaint.
  • The identity of the employee that undertook to provide the service to the Client.
  • The department to which the relevant employee relates to.
  • The date of receipt of the complaint.
  • The details of the complaint full description.
  • The extent in financial terms of the potential loss that the Client claims has suffered.
  • The date and in summary, the content of the reply of the Company to the said complaint.

If you want to send us a complaint, kindly send it to email: [email protected]

General

The Company is obliged to be taking all reasonable steps to identify conflicts of interest situations between the Company, the Company and its Clients or between its Clients during the course of the provision of investment services. It is the duty of the Compliance Officer to abide by the following principles and act in such a way so as to prevent and resolve potential conflicts of interest, as indicated in the following.

The Company’s conflicts of interest policy, in general shall have to:

  • [A] Identify with reference to the investment services carried out by the Company, the circumstances which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of one or more Clients
  • [B] Specify procedures to be followed and measures to be adopted in order to manage such conflicts

The Company shall ensure that the procedures and measures taken are designed to ensure that relevant persons engaged in different business activities involving a conflict of interest carry on those activities at a level of independence appropriate to the size and activities of the Company and to the materiality of the risk of damage to the interests of Clients.

The procedures to be followed and measures to be adopted shall be necessary and appropriate for the Company to ensure the requisite degree of independence:

  • [A] Effective procedures to prevent or control the exchange of information between relevant persons engaged in activities involving a risk of a conflict of interest where the exchange of that information may harm the interests of one or more Clients
  • [B] The separate supervision of relevant persons whose principal functions involve carrying out activities on behalf of, or providing services to, Clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the Company
  • [C] The removal of any direct link between the remuneration of relevant persons principally engaged in one activity and the remuneration of, or revenues generated by, different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities
  • [D] Measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out investment or ancillary services or activities
  • [E] Measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate investment or ancillary services or activities where such involvement may impair the proper management of conflicts of interest

If the adoption or the practice of one or more of those measures and procedures does not ensure the requisite degree of independence, alternative or additional measures and procedures as are necessary and appropriate for these purposes are adopted.

Before the Company provides any services, the Company shall need to disclose to the Client or potential Client the general nature and any conflicts of interest potentially present.

This shall be made in a durable medium and include sufficient detail, taking into account the nature of the Client, to enable the Client to take an informed decision with respect to the investment service in the context of which the conflict of interest arises.

Services or Activities Giving Rise to Detrimental Conflict of Interest

For the purposes of identifying the types of conflict of interest that arise in the course of providing investment services or a combination thereof and whose existence may damage the interests of a Client, the Company shall take into account, by way of minimum criteria, the question of whether the Company or a relevant person, or a person directly or indirectly linked by control to the Company, is in any of the following situations, whether as a result of providing investment services or investment activities or otherwise:

  • [A] The Company or that person is likely to make a financial gain, or avoid a financial loss, at the expense of the Client
  • [B] The Company or that person has an interest in the outcome of a service provided to the Client or of a transaction carried out on behalf of the Client, which is distinct from the Client’s interest in that outcome
  • [C] The Company or that person has a financial or other incentive to favor the interest of another Client or group of Clients over the interests of the Client
  • [D] The Company or that person carries on the same business as the Client
  • [E] The Company or that person receives or will receive from a person other than the Client

an inducement in relation to a service provided to the Client, in the form of monies, goods or services, other than the standard commission or fee for that service

rest

The Company shall keep and regularly update a record of the kinds of investment service or activity carried out by the Company in which a conflict of interest entailing a material risk of damage to the interests of one or more Clients has arisen or, in the case of an ongoing service or activity, may arise. Prohibited Transaction Practices

In order to prevent potential conflicts of interest between the Company and its members and the Clients, the following transaction practices shall be forbidden:

  • [A] The provision to the Client of investment services with the purpose of influencing the price of financial instruments for the benefit of the Company or related persons, particularly with respect to transactions that the Company or related persons are about to effect before or after the provision of the said investment services
  • [B] The use of Client transaction information by the Company for own benefit or the announcement to third persons of such information
  • [C] The preferential treatment of Company members of staff at the expense of its Clients, during the provision of the investment services to a Client
  • [D] The effect of transactions by members of the Company’s staff and directors for their own account, or for the account of persons related to them, on the basis of confidential information which they acquire during course of their employment with the Company

The Company shall at all times have the duty to examine whether the approved persons are aware of the detection and timely resolution of the causes that give rise to a conflict of interests between the Company, including persons associated with the Company, and its Clients or amongst its Clients inter se.

For this purpose, the Company shall have in place Chinese Walls procedures: no communicating of information and data between the various business units of the Company and especially, whether the Company’ s officers and employees have access to data in the possession of business units to which such access is not permitted.

In particular, the necessary Chinese Walls shall be erected between the Reception & Transmission Department, the Execution Department and the Dealing on Own Account Department, as well as with the rest of the Company’s organizational units, so that to prevent the flow of confidential information in a way that which adversely affect the interest of the Clients.

The Compliance Officer shall be responsible for maintaining such Chinese Walls, by means of regular checks and monitored by the Company’s Internal Auditor.

Policy/Guidelines

The Company shall have, implement and maintain adequate arrangements aimed at preventing the following activities in the case of any relevant person who is involved in activities that may give rise to a conflict of interest, or who has access to inside information within the meaning of the Insider Dealing and Market Manipulation (Market Abuse) law or to other confidential information relating to Clients or transactions with or for Clients by virtue of an activity carried out by him on behalf of the Company:

The Company shall have, implement and maintain adequate arrangements aimed at preventing the following activities in the case of any relevant person who is involved in activities that may give rise to a conflict of interest, or who has access to inside information within the meaning of the Insider Dealing and Market Manipulation (Market Abuse) law or to other confidential information relating to Clients or transactions with or for Clients by virtue of an activity carried out by him on behalf of the Company:

  • [A] Entering into a personal transaction which meets at least one of the following criteria:
    • That person is prohibited from entering into it under the abovementioned law
    • It involves the misuse or improper disclosure of that confidential information
    • It conflicts or is likely to conflict with an obligation of the Company under the Law
  • [B] Advising or procuring, other than in the proper course of his employment or contract for services, any other person to enter into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by point (a) above or by the fact that the Company shall not misuse information relating to pending Client orders, and takes all reasonable steps to prevent the misuse of such information by any of its relevant persons
  • [C] Without prejudice to Section 9(1) (b) of the Insider Dealing and Market Manipulation (Market Abuse) law, disclosing, other than in the normal course of his employment or contract for services, any information or opinion to any other person if the relevant person knows, or reasonably ought to know, that as a result of that disclosure that other person will or would be likely to take either of the following steps:
    • To enter into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by point (a) above or by the fact that the Company shall not misuse information relating to pending Client orders, and takes all reasonable steps to prevent the misuse of such information by any of its relevant persons
    • To advise or procure another person to enter into such a transaction

     

    In this respect, it is the duty of the Compliance Officer to make certain that: The Section 11.3.7.1. above of this IOM, shall not apply to the following kinds of personal transaction:

    • [A] Personal transactions effected under a discretionary portfolio management service where there is no prior communication in connection with the transaction between the portfolio manager and the relevant person or other person for whose account the transaction is executed
    • [B] personal transactions in units in collective undertakings that comply with the conditions necessary to enjoy the rights conferred by the Open-Ended Undertakings for Collective Investment in Transferable Securities (UCITS) and Related Issues law or are subject to supervision under the law of a member state which requires an equivalent level of risk spreading in their assets, where the relevant person and any other person for whose account the transactions are effected are not involved in the management of that undertaking

The Company’s personnel having access, because of their position and access in the Company to trading information of Clients of which may influence the prices of financial instruments, subject to the policy of the Company on Personal Transactions, as per Section 11.3.7. of this IOM, as this is maintained and may be amended, by the Compliance Officer:

  • [A] Must inform the Company of their investment accounts
  • [B] Are prohibited from keeping accounts in other financial services firms without the Company’s authorization and are prohibited from performing own account transactions without the permission of the Company
  • [C] Are obliged to authorize the Company to directly take delivery from the financial services company where they keep such accounts, of updates concerning the transactions performed.

Reports for compliance with these provisions shall be submitted to the Managing Director and monitored by the Company’s Internal Auditor.

MiFID also specifies strict requirements and procedures governing the internal and business organization of financial services providers which involve compliance, risk management, internal audit, outsourcing, and transactions reported to the supervisory authority.

The Company shall maintain effective and transparent procedures for the reasonable and prompt handling of complaints received from Retail Clients or potential Retail Clients, and to keep a record of each complaint and the measures taken for the complaints resolution. Such procedures and records shall be the responsibility of the Administration/Back Office Department.

The following details shall have to be documented:

  • The identity of the Client who filed the complaint.
  • The identity of the employee that undertook to provide the service to the Client.
  • The department to which the relevant employee relates to.
  • The date of receipt of the complaint.
  • The details of the complaint full description.
  • The extent in financial terms of the potential loss that the Client claims has suffered.
  • The date and in summary, the content of the reply of the Company to the said complaint.

 

If you want to send us a complaint, kindly send it to email: [email protected]