S.O. Spotoption Limited, 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
The Company, when dealing with eligible counterparties, is exempted 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:
i. Credit institutions
ii. Investment Firms
iii. Other authorised or regulated financial institutions
iv. Insurance undertakings
v. Collective investment schemes and management companies of such schemes
vi. Pension funds and management companies of such funds
vii. Commodity and commodity derivatives dealers
ix. Other institutional investors
• Large undertakings meeting two of the following size requirements, on a proportional basis:
i. Balance Sheet total at least EUR20.000.000
ii. Net Turnover at least EUR40.000.000
iii. Own Funds 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 investor 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, is considered to be a retail client.
II. OPTION TO CHANGE CLASSIFICATION
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 Company proceeds in this action, in order to offer a uniform level of protection to all of its 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. 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:
• The client has carried out transactions, in significant size, at an average frequency of 10 per quarter over the previous ten quarters.
• The size of the client’s financial instrument portfolio exceeds EUR500.000.
• 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 procedure which shall be followed by the clients, who wish to be treated as professional clients, is as follows:
• The clients shall 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 shall give them a clear written warning of the protections and investor compensation rights they may lose.
• The clients shall state in writing, in a separate document from the contract, that they are aware of the consequences of losing such protections.