CLIENT CATEGORISATION

I. CLIENT CLASSIFICATION

Coverdeal Holdings Ltd, hereafter “the Company”, prior to engaging in business relationship with its potential clients, notifies the potential clients of the clients’ classification in use by the Company, and informs them about the category in which they are initially classified by the Company. Clients shall be categorised as follows, based on the criteria outlined below:

a. Eligible Counterparties

Eligible Counterparties are those institutions that are registered as credit institutions, insurance undertakings, pension funds and other financial institutions authorized by an EU member state or regulated under community legislation or the national law of a member state.

The Company, when dealing with eligible counterparties, is exempt from important obligations under conduct of business rules, best execution rules, client order handling rules. For that purpose, eligible counterparties may consider to be falling within the following categories:

  • Investment firms
  • Credit institutions
  • Insurance companies
  • UCITS and their management companies
  • Pension funds and their management companies
  • Other financial institutions authorised 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 organisations
  • Third country entities equivalent to the categories mentioned above

b. Professional Clients

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. In order to be considered a professional client, the client must fall within the following categories of clients:

Entities which are required to be authorised or regulated to operate in the financial market, either from Member States or non Member States, such as:

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

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

  • Balance Sheet total of at least EUR20.000.000
  • Net Annual Turnover of at least EUR40.000.000
  • Own Funds/Capital of at least EUR2.000.000

National and regional governments and public bodies that manage public debt, central banks, international and supranational institutions such as the World Bank, the Internal Monetary Fund, the European Central Bank, the European Investment Bank and other similar international organisations.

Other institutional investors whose main activity is to invest in financial instruments including entities dedicated to the securitisation of assets or other financing transactions

c. Retail Clients

Every client, which is neither an eligible counterparty nor a professional client and receives a greater level of regulatory protection for being classified as such,, is considered to be a retail client.

II. PROTECTION AFFORDED TO CLIENTS

Professional clients are afforded less regulatory protection than retail clients due to the higher expertise and sophistication they have compared to retail clients. Retail clients enjoy the greatest regulatory protection as they are considered to be the most inexperienced investors and therefore unable to properly assess or manage the risks associated with investments and, therefore, they need greater protection.

The Company will provide retail clients with the following:

  • more information regarding the financial instruments to be traded and of the risks relating to these, information on the company itself, its services and any investments and, costs,commissions, fees and charges of transactions so that the client is enabled to make an informed investment decision.
  • a warning where there are material difficulties in the proper execution of the clients’ orders when such difficulty becomes known to the Company.
  • a summary of the Investor Compensation Fund.
  • a warning to the client where it considers that the particular transaction in which the client wishes to engage is not appropriate for the client. Despite the warning, the client can still proceed with making the transaction.

Eligible counterparties have the lowest level of investor protection. Although, Eligible Counterparties essentially have the same protection as a professional Client, the investor protection for this group is significantly reduced as, in addition to the above, the Company is NOT required to:

  • provide the Client with best execution when executing orders.
  • disclose information on expenses such as fees, commissions or charges.
  • provide information about the Company, its services and arrangements through which the Company is remunerated.
  • provide reports on the execution of the orders
  • provide risk disclosures regarding products or, services the Client has selected

III. OPTION TO CHANGE CLASSIFICATION

After the Company has categorised the client as a retail client, or a professional client, or an eligible counterparty, the client may request for a change to their category. A retail client may request to be categorised as a professional client, or a professional client to be categorised as a retail client. Similarly, an eligible counterparty can request to be categorised either as a professional or a retail client. The Company reserves the right to reject any such request.

It is noted that an eligible counterparty or professional client is allowed to request non professional treatment and the Company may agree to provide a higher level of protection. In this respect, the Company notifies its clients in a written form of their option to be classified as retail clients.

The higher level of protection will be provided by the Company when the client enters into a written agreement with the Company, to the effect that it shall not be treated as a professional and stating whether the retail classification relates to one or more particular services or transactions or one or more types of product. It is the responsibility of the client who is classified as a professional client to ask for a higher level of protection when he is not in a position to properly assess and manage the risks involved in the transactions.

In addition, clients who have been initially classified by the Company as retail clients are allowed to request to be treated as professional clients, provided that at least two of the following criteria are satisfied:

i.The client has carried out transactions, in significant size,on the relevant market at an average frequency of 10 per quarter over the previous four quarters;and/or

ii.The size of the client’s financial instrument portfolio, defined as including cash deposits and financial instruments, exceeds EUR500.000; and/or.

iii.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 procedure which shall be followed by the client, who wishes to be treated as professional client, is as follows:

i. The client shall state in writing to the Company that he or she wishes to be treated as professional client, either generally or in respect of a particular investment service or transaction, or type of transaction or product.

ii. The Company shall give them a clear written warning of the protections and investor compensation rights they will lose.

iii. The client shall state in writing, in a separate document from the contract, that he or she is aware of the consequences of losing such protections.

It is the responsibility of the client to inform the Company of any changes that may affect the category status of the client. However, should the Company become aware that the client no longer fulfils the initial conditions which made him/her eligible to be categorised as a professional; the Company will take appropriate action.

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Risk Warning: Trading CFDs is risky and can result in the loss of your invested capital. Please ensure that you understand the risk involved and do not invest more than you can afford to lose. Read full Risk Disclosure Statement .Coverdeal Holdings Ltd is regulated by CySEC under License No. 231/14
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