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Client Classification Policy

General

CFD Corporate (“The Company”) is obligated to classify its clients into one of the following groups: retail, professional or eligible counterparty, prior to the provision of any financial investment services to the prospective client. Each client classification is determined according to the criteria specified below:

“Professional Client” is a client who has the appropriate knowledge and experience to make informed investment decisions in respect of the level of risk involved. The entities that meet one or more of the following criteria should be considered as Professional Clients:

1. Entities which are entitled, as regulated and authorized bodies, to operate in the financial market, either by Member States or non-Member States, such as:

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

2. Large undertakings, whose financial instrument portfolios meet at least two of the requirements below:

Minimum of €20m total in balance sheet
Minimum €40m net turnover
Minimum €2m in own funds

3. A national or regional government, a public body that manages public debt, a central bank or international institutions.

4. Other institutional investors who focus on investing in financial securities, such as entities involved in asset securitization processes and other financing procedures.

“Eligible Counterparty” is an entity which is provided only with the investment services that involve reception, transmission and execution of a client’s order by the investment firm.

An entity receiving any kind of financial advice will not qualify for the Eligible Counterparty classification.

Eligible Counterparty entities fall within the following categories:

Investment firms
Credit institutions
Insurance companies
UCITS and their management companies
Pension funds and their management companies
Other financial institutions authorized or regulated under community or national law
Commodity and commodity derivative traders (dealing on own account)
National governments and their corresponding offices including public bodies which manage public debt
Central Banks
Supranational organizations
Third country entities equivalent to the categories mentioned above
“Retail Client” is a client who doesn’t fall within the Professional Client or the Eligible Counterparty category

Clients’ Change in Classification

Each client handled by The Company has the possibility of requesting a different category from the one he was initially classified to. Any request to change classification must meet the terms and conditions set by The Company, which reserves the right to accept or decline the request.

A change in classification request may be submitted to The Company under the following circumstances:

Retail Client requesting to be treated as Professional
For the change in classification request to be applicable, the client must satisfy at least two of the following quantitative assessment criteria:
The client has carried out 10 transactions per month over the previous four executive quarters
The client’s investment portfolio is a minimum of €500,000
The client has experience of at least one year working in the financial sector in a position where knowledge of the transactions and services of The Company is required
The Retail Client must submit a written approval to The Company, stating that he wishes to be treated as a Professional Client and forgoes the highest level of protection only Retail Clients are entitled to.

Professional Client requesting to be treated as Retail

A Professional Client who thinks he is failing to properly assess or manage the risks involved, has the right to opt for a higher level of protection, such as granted to Retail Clients, in one or more particular services, transactions or products. The Company and the client will then sign a written agreement, approving the client’s new classification. The agreement will elaborate on the type of service, transaction, or product the client may need additional assistance with in terms of protection.

Eligible Counterparty requesting to be treated as a Professional or Retail Client

An Eligible Counterparty has the right to request a higher level of protection such as provided to a Retail or Professional Client.

Clients’ Protection Rights

Each of The Company’s clients is handled according to the category to which he was classified in accordance with the “Investment Services and Activities and Regulated Markets Law” of 2007. The per-category treatment of each client primarily differs in the following aspects:

The information clients are given regarding The Company and its services.
The level of assessment regarding the propriety of the different financial services or products offered to the clients.
Investment services and products notices sent to the clients.
The method by which the obligation to perform clients’ orders under the most favorable terms is executed.

Retail Clients

Retail Clients are entitled for higher levels of protection compared with the other client classifications.

In compliance with the law and regulation, and prior to engaging in any type of business activities with the client, The Company is required to provide the client with the following information:

The types of financial securities, their features and the risk they incur.
Clients’ classification and option to opt for a different one.
The security measures undertaken for the purpose of safeguarding clients’ funds and securities on their behalf.
Costs and associated charges.
Clients’ order execution implementation.
The frequency of the services and product notices dispatch.
Retail Clients who are provided with financial consultant services receive periodic notices regarding the portfolio management activities carried out on their behalf. The statements that Retail Clients receive have a more analytic focus than those sent to the other client categories.
If The Company provides the Retail Client with services other than investment advice services, The Company must enter into a written business agreement, specifying the rights and obligations of the client and company regarding the services given.
To comply with the law, The Company must take necessary steps to obtain the best order execution results for the Retail Client. Best order execution will be determined by the cost related to execution, which includes execution venue fees, clearing and settlement fees and other fees paid to third parties in relation to the order’s execution.
The Company is also obligated, under the law, to notify the client about any losses exceeding a predefined limit, set between The Company and client, by the end of the day it has been exceeded or, if the limit was exceeded on a non-business day, the end of the next business day.

Professional Clients

Under applicable regulations, Professional Clients are granted lower levels of protection than Retail Clients.

Before providing the client with any investment services, The Company is required to provide information about:

Clients’ classification and option to opt for a different one.
The financial products and services The Company offers in summary.
The Company’s order execution policy.
Holding of financial instruments and funds, where this is by a third party on The Company’s behalf.
The existence of any security interest or lien which The Company has or may have over the clients’ financial instruments or funds or any right of off-set it holds in relation to those instruments or funds.
Compared with the Retail Clients, The Company’s reporting practices regarding the order execution and portfolio management services given to clients under the Professional classification are limited.
The Professional Client is required to possess the relevant knowledge and experience in regard to the investment services, types of products or transactions he is provided with, as part of his Professional Client classification.
Consequently, The Company is not obligated to grant the client any type of assessment services regarding the suitability of the financial services or products envisaged. Provided the client asks for financial services or securities assessment, The Company gathers data only about the investment objectives and its financial capability.
On the other hand, provided the service granted involves financial advice, the client is required to have the financial ability to withstand any financial risk related to his investment objectives.

Eligible Counterparties

The Eligible Counterparty is known as the most knowledgeable and experienced investor in the capital market.

As such, The Company provides this client with a lower level of protection which entails only the reception, transmission and execution of orders. The restrictions that apply on the Eligible Counterparty, in compliance with the law, are as follows:

The Company is not required to disclose any information regarding The Company, the services it offers, execution venues, the terms under which The Company will be paid and other relevant information.
The Company is not required to provide the client with any information about the paid or received commissions or fees.
The Company is not required to provide the client with frequent order execution or management reports of his investments.
It is assumed by The Company that the client is able to make educated decisions regarding the appropriateness of the product or service envisaged; hence The Company is not required to assess the suitability of the specific product or service offered to him.
The Company is not required to provide the client with the best order execution in terms of promptness, fairness and expediency, such as is given to the other two client classifications, or with respect to his trading interests.

Services Suitability Assessment

For The Company to provide the client with the most suitable portfolio management services, The Company must first obtain the relevant information regarding the client’s understanding of the risk the instruments or services offered to him entails.
Should the client not provide the information The Company sees as required, The Company reserves the right not to provide him with the above-mentioned services.

Services Appropriateness Assessment

As part of the provision of investment services other than investment advice, The Company requires the client to provide information about his knowledge and experience in relation to the products or services offered or claimed. This is to assess the appropriateness level of the investment service for the client. In the event the client provides no information, or The Company finds the information unsatisfactory, or The Company considers, according to the information collected, that the client doesn’t possess the knowledge or experience appropriate for that particular investment service or instrument, The Company then should notify the client appropriately.

Provision of Execution-Only Services

One primary investment service The Company provides to clients involves only the procedures of reception, transmission and execution of orders, with or without ancillary services, which pertain to non-complex securities. The Company may provide the above services without evaluating the appropriateness of the securities or services, given the following conditions are all satisfied:

The securities related to the preceding services include shares traded on a regulated market or an equivalent third-country, money-market securities, noncomplex bonds and other noncomplex financial securities.
The service is provided upon the client’s or prospective client’s behest.
The client has been made fully aware that the provision of the said services doesn’t include the appropriateness assessment of the products or services offered or claimed and that as a result, he is not entitled to the protection rights arising from the conduct of this specific investment service.
The Company adheres to its conflicts of interest policy obligations.

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