Client Categorisation Policy
Following the implementation of the Markets in Financial Instruments Directive (MiFID) in the European Union and in accordance with the Investment Services and Activities and Regulated Markets Law of 2007 (Law 144(I)/2007) in Cyprus, Capital Com SV Investments Limited (“we”, “CAPITAL.COM”, “the Company”) is required to categorize clients into one of the following three categories: retail, professional or eligible counterparty.
The Company accepts only retail clients that are individuals and by default all clients are classified as retail clients at the account opening.
I. CLIENT CATEGORISATION
The client categorization criteria are outlined below.
a. Retail Clients
Every client, who is neither an eligible counterparty nor a professional client, is considered a retail client.
b. Professional Clients
A professional client is a client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs.
To be considered a professional client, the client must be one of the following:
i. An entity which is required to be authorised or regulated to operate in the financial markets by one of the Member States under the Directive 2004/39/EC, an entity authorized or regulated by a Member State without reference to the abovementioned Directive, and an entity authorized or regulated by a non-Member State, such as:
- a credit institution;
- an investment firm;
- other authorised or regulated financial institution;
- an insurance undertaking;
- a collective investment scheme and a management company of such scheme;
- a pension fund and a management company of such fund;
- a commodity and commodity derivatives dealer;
- a local;
- other institutional investor.
ii. A large undertaking meeting two of the following size requirements, on a proportional 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.
iii. A national or regional government, public body that manage public debt, a central bank, an international and supranational institution such as the World Bank, the International Monetary Fund, the European Central Bank, the European Investment Bank and any other similar international organisation.
iv. Any other institutional investor whose main activity is to invest in financial instruments, including entities dedicated to the securitisation of assets or other financing transactions.
c. Eligible Counterparties
Certain authorised or regulated entities, governments, international financial institution, as well as exempted undertakings and firms that fall under the criteria for professional clients mentioned in paras i, ii and iii above can be classified as eligible counterparties under the relevant laws and regulations.
CAPITAL.COM recognizes the existing overlap between the way professional clients and eligible counterparties are defined in the relevant laws and regulations and will be addressing this issue on a case by case basis (if necessary). For the time being, CAPITAL.COM will be offering its services exclusively to retail clients that are individuals.
II. OPTION TO CHANGE CLASSIFICATION & REQUEST FOR A DIFFERENT CATEGORISATION
CAPITAL.COM recognizes that clients should be in general allowed to request to be placed into a different category other than retail. However, at this point CAPITAL.COM has made the decision to provide its services exclusively to retails clients that are individuals and will not be able to accommodate such request.
If such recategorization is of material importance to our client and prevents him/her from using our services, such client may terminate his/her arrangements with CAPITAL.COM under our Terms & Conditions.
As soon as CAPITAL.COM will broaden the scope of its client base by including clients other than retails clients that are individuals, the current clients of CAPITAL.COM will be notified accordingly. Appropriate changes will be introduced to this Policy.
III. PROTECTION RIGHTS
Since all of our clients are retail clients, they all enjoy the same level of protection under the applicable laws and regulations, providing, among other things, that:
- client will be given full, precise and easy to comprehend information/disclosures concerning CAPITAL.COM, its services and any investments, its cost, commissions, fees and charges and the safeguarding of client financial instruments and client funds;
- CAPITAL.COM will request the client to provide information regarding his/her knowledge and experience in the investment field relevant to the specific type of product or service offered or demanded so as to enable the Company to assess whether the investment service or product envisaged is appropriate for the client. In case the Company considers, on the basis of the information received, that the product or service is not appropriate for the client, the Company will alert the client accordingly;
- when executing orders CAPITAL.COM will take all reasonable steps to achieve what is called “best execution” of the client’s orders that is to obtain the best possible result for their client as defined in the Company’s Order Execution Policy;
- CAPITAL.COM will inform clients of material difficulties relevant to the proper carrying out of their order(s) promptly upon becoming aware of such difficulties;
- CAPITAL.COM will provide clients with full and explicit information on the execution of the relevant client orders;
- CAPITAL.COM will enter into the Terms & Conditions with the client, that outline the essential rights and obligation of both parties;
- CAPITAL.COM will make adequate arrangements for financial instruments held on behalf of a Client to prevent their use by the Company for its own account by depositing them with a third party in manner that would make them identifiable from the Company’s financial instrument held with that third party (if any) and identifiable from the financial instruments held by that third party as well;
- clients may be entitled to compensation under the Investor Compensation Fund for Clients of Investment Firms;
- CAPITAL.COM will make adequate arrangements to prevent the use of client funds for its own account by depositing them entirely into segregated bank accounts.