CY-1082 Nicosia
Cyprus
Tel: +357 22 68 00 15
Fax: +357 22 68 00 16
Web:
Nicosia, 27 May 2015
For the attention of: The Compliance Officer / Company Secretary / Chief operating Officer
Dear Sir / Madam
Important – MiFID Notification for Professional Clients.
As of the 1st of November 2007, the legal framework that defines the conduct of regulated financial business in Europe, the Investment Services Directive, has been superseded by the Markets in Financial Instruments Directive (“MiFID”).
MiFID is built around a comprehensive system of Client Categorisation that bears a substantial influence on the nature of the business relationship with the client. MiFID establishes three categories of clients, namely (a) Retail Clients (b) Professional Clients and (c) Eligible Counterparties. The level of protections afforded to each Client Categorisation varies substantially, with retail clients being afforded the highest protection and Eligible Counterparties the least protection.
Your Categorisation
Subject to the information that you have supplied to us, we propose to treat you as a PROFESSIONAL CLIENT, for all the Investment Services we provide you under MiFID and for all Financial Instruments, including complex Financial Instruments and as such, we will accord you all protections afforded by MiFID.
Under MiFID, you are entitled to request categorisation as a Retail Client or Eligible Counterparty However, it is important to note that as a policy, Atonline Limited refrains from offering services to retail clients. Should you opt for treatment as Eligible Counterparty, you would lose certain of the protections afforded to you by MiFID, including “best execution” and the handling of your orders.
Informational Package
This letter is accompanied by a comprehensive informational package that contains all the information that needs to be disseminated to you in the discharge of our obligations in respect of MiFID. Please take the time to read carefully through the informational package so that you have a good understanding of the base for our cooperation under MiFID.
MiFIDConsents
Please note that for certain areas, your prior consent is required. These areas are prominently marked for your convenience and are presented in the “MiFID Consents Form” on the next page.
Investor and AMLQuestionnaires
In order to comply with our regulatory obligations, we need to obtain from you some additional information to (a) ascertain your investment objectives, so that we can provide you with recommendations that are suitable to you (b) build an economic profile of your entity and (c) where applicable, ascertain the measures and procedures that you have in place for the prevention of money laundering and terrorist financing. Please complete and sign the enclosed questionnaires.
We should be grateful if you (or any person with the appropriate authority) could provide us with your response as soon as possible to enable the activation of your account.
Should you have any further questions, please do not hesitate to contact either your account officer or myself, Ms. Lana Maremshaova, by email at (preferred method) or by telephone on +357 22680015.
Yours faithfully
Pavels Mitins
Anti-Money Laundering Compliance Officer
Atonline Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission under license reference CIF 104/09.Page 1 of 2
MiFID Consents Form
Agree / Disagree
1. /
Consent to the provision of information by Atonline Limited in a durable medium other than on paper
You confirm that you have regular access to the internet and you consent to Atonline Limited providing you information in a durable medium other than on paper by electronic means, either by facsimile transmission, electronic mail (email) to the number and address that were stated on the New Client Account form or notified to Atonline Limited at a later stage. You hereby also consent to Atonline Limited providing information to you on Atonline Limited’s website at or any other website that Atonline Limited may notify to you from time to time.If you have not notified to Atonline Limited a facsimile number or an email account and you wish to receive information from Atonline Limited by electronic means, please provide us with the said information at the designated space below:
Facsimile (fax) number: email address:
2. / Right of Atonline Limited to execute your orders outside of a Regulated Market or a Multilateral Trading Facility (MTF) in an instrument admitted to trading on a Regulated Market or an MTF
3. /
Consent to the use of Atonline Limited’s professional judgment as to whether to transmit certain limit orders to a Regulated Market or a Multilateral Trading Facility (MTF)
You confirm that you grant Atonline Limited your consent to use its best professional judgment as to whether to transmit limit orders that are below standard market size and which are not immediately executed under market conditions prevailing at the time, to a Regulated Market or a Multilateral Trading Facility (MTF).4. / Consent to Atonline Limited’s Order Execution Policy
You will be deemed as having granted Atonline Limited your consent to the Order Execution Policy that is presented in the MiFID Informational Package by placing an order with Atonline Limited anytime after or on the date the Order Execution Policy was dispatched to you.
Atonline Limited’s Order Execution Policy is also posted on our website We suggest that you visit our website from time to time to obtain an updated version of our Order Execution Policy.
Signed:
Name(s):
Title(s):
Date:
Duly authorized for and on behalf of
Please provide us with your responses in both of the following manners:
- By post to: Atonline Limited, 20 Kyriakou Matsi Avenue, 4th floor, CY-1082 Nicosia, Cyprus.
- By sending a scanned copy of the signed form by electronic mail to .
Atonline Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission under license reference CIF 104/09.
Page 1 of 2
/ 20 Kyriakou Matsi Avenue, 4thFloor
CY-1082 Nicosia
Cyprus
Tel: +357 22 68 00 15
Fax: +357 22 68 00 16
Web:
MiFID – Informational Package for PROFESSIONAL clients
Methods of communication
Safeguarding of client financial instruments and funds
Segregation of Client Financial Instruments and Funds
Special factors relating to the Russian Federation
Right of Atonline Limited for Lien and set-off
Investor Compensation Scheme
Information about financial instruments
Order handling
Order execution policy
Suitability and Appropriateness
Personal Data Protection
Policy adopted by Atonline Limited in relation to the Processing of Personal Data (Protection of Individuals) Law
ORDER EXECUTION POLICY
Atonline Ltd is authorized and regulated by the Cyprus Securities and Exchange Commission under license reference CIF 104/09.
Informational package for professional clients
Methods of communication
Through the enclosed “MiFID Consents Form”, we are enquiring as to the possibility of obtaining your confirmation that you have regular access to the internet and the possibility to provide to you information in a durable medium other than on paper. This will enable us to post important information that is not specifically addressed to you on our website and communicate with you via email. We would very much appreciate such a confirmation because we sincerely believe that it is to your advantage. The dissemination of information through electronic means is much more efficient, as we can quickly monitor whether the information has reached you (contrary to correspondence sent by post) and it enables us to reduce the cost of serving your account, thus keeping our rates and charges competitive.
Safeguarding of client financial instruments and funds
Segregation of Client Financial Instruments and Funds
This section is relevant to you if you have opted for the provision of custodial services by Atonline Limited (herewith “ALL”). Client funds in currencies other than Roubles and Financial Instruments traded on a European regulated market or an MTF are deposited in creditworthy European Financial Institutions in either segregated or omnibus client accountsand are segregated fromFinancial Instruments and funds belonging to ALL or any other group entity. The omnibus accounts are clearly marked as “Client Accounts” so that in the unlikely event of default of either ALL or any other group entity, Courts may notseize or arrest Financial Instruments or funds belonging to clients.
However, the same protections do not apply for Financial Instruments traded in a third country and funds kept in Roubles or certain third country currencies. It is strongly suggested that before you submit an order for a Financial Instrument that is not traded on a European regulated market or MTF that you consult with your Account Officer as to the regime that prevails in the said jurisdiction in regards of safeguarding client Financial Instruments and funds.
Special factors relating to the Russian Federation
Especially in relation to Russian assets, it is important to bring to your attention certain important factors. Aton LLC, our affiliated entity that acts as our broker and custodian for Russian Financial Instruments, may hold your assets either directly through registration with the relevant registrar or via local depositories, including NSD and DCC. As a result, you will be exposed to operational and other risk associated with the Russian market infrastructure, including such registrars and local depositories and you should make yourself familiar with this infrastructure before deciding to invest in this market. The registration process can sometimes be administratively cumbersome and time consuming, leading to constraints on trading.
One further oddity is that the concept of beneficial ownership is not yet fully developed under Russian law and as a result, it is possible that Russian law would not recognise your beneficial ownership of assets despite that these are held in a segregated account for clients of ALL. As a result, you will not be fully protected in the event that a valid order is served to either ALL or Aton LLC seeking to freeze, attach or otherwise restrict assets belonging to either of the two companies and a Russian Court may treat your assets as assets belonging to ALL or Aton LLC and as such open to seizure and arrest and you may lose your beneficial interest.
As part of the Custody Agreement, where applicable, ALL undertakes to collect income, dividends, coupons, stock distributions and other entitlements that are due to you in respect of the assets kept under ALL’s custody. Typically ownership of securities under Russian Law will only transfer upon settlement and registration of the securities in question. As a result, your corporate action entitlements and obligations may not correspond with legal ownership of the securities in question.
We will be accounting for your assets under ALL’s custody on a “trade date” principle. Corporate actions in Russia typically are subject to a “record date” on which ALL or you will have to be the legal owner of the security in question to be entitled to participation in the event. Due to the fact that in Russia, the “record date” may precede substantially the event and/or where the registration of securities ownership, due to delays or otherwise occurs many days after the trade date, your ability to participate in the event may not correspond with your holdings in ALL’s books and records or the holdings that appear on your analytical statement or may include only some of the trades that were effected on your behalf prior to the “record date”.
In Russia there is no centralised source of disclosure in respect of corporate actions and the obligation of the issuers in this respect may be limited to an announcement in national or local newspapers. This unavoidably entails the danger of an announcement not being noticed. In cases where the issuer opts for notification exclusively through newspapers, ALL will not be responsible or liable for the failure to locate or identify relevant events.
One further oddity of Russian practise is that if a Russian Issuer does not distribute dividends within one year of such dividends being proclaimed, the legal owners of the securities in question may never receive their dividend entitlements. In addition, during the one year period, the Issuer may pay registered owners of the entitled securities at different times. As a result, ALL may only pay distributions to you in respect of securities of which ALL or Aton LLC is the legal owner upon (a) full payment being received from the issuer or (b) one year having passed from the date of the issuer’s corporate meeting where the distribution was declared. Due to all these odd factors, ALL may not be able to participate (either in total or partially) in all events to which you may be entitled to participate.
ALL may not be able to offer you the possibility of proactive proxy voting in respect of securities of which ALL is the legal owner. ALL may be able to vote on your behalf where all other beneficial owners of the relevant Financial Instrument under ALL’s custody wish to vote in the same manner as you.
Right of Atonline Limited for Security, Lien and set-off
Please be reminded that pursuant to clauses 10, 11 and 12 of the Financial Services Agreement, ALL is entitled to lien on the funds amount or any Securities in your account and to terminate any of your obligations to ALL by set-off at any time including the obligation to pay a fee to ALL and/or compensate its expenses according to the Agreement.
Investor Compensation Scheme
As a professional client, you are not accorded any protection by the Investor Compensation Scheme. Information about the Investor Compensation Scheme can be provided to you upon request.
Information about financial instruments
As a professional client, we assume that you possess the requisite knowledge and experience to assess the risks associated with non-complex Financial Instruments and therefore, we will concentrate on the risks associated with complex Financial Instruments. Art. 19(6) of MiFID and Art. 38 of the Implementing Directive recognise as non-complex products shares admitted to trading on a regulated market or in an equivalent third country market (The European Commission will publish a list of those markets that are considered to be equivalent), money market instruments, bonds or other forms of securitised debt (provided they do not embed a derivative), UCITS, and other instruments that satisfy the following criteria:
(a)there are frequent opportunities to dispose of, redeem or otherwise realise that instrument at prices that are publicly available to market participants
(b)it does not involve any actual or potential liability for the client that exceeds the cost of acquiring the instrument
(c)adequately comprehensive information on its characteristics is publicly available and is likely to be readily understood to a level where a retail client can make an informed judgement as to whether to enter into a transaction in that instrument.
The term complex Financial Instruments refers to:
(1)Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities,currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures whichmay be settled physically or in cash;
(2)Options, futures, swaps, forward rate agreements and any other derivative contracts relating to commodities thatmust be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason ofa default or other termination event);
(3)Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settledprovided that they are traded on a regulated market and/or an MTF;
(4)Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can bephysically settled not otherwise mentioned in point (3) here above and not being for commercial purposes, which have thecharacteristics of other derivative Financial Instruments, having regard to whether, inter alia, they are cleared andsettled through recognised clearing houses or are subject to regular margin calls;
(5)Derivative instruments for the transfer of credit risk;
(6)Financial contracts for differences.
(7)Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables,freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cashor may be settled in cash at the option of one of the parties (otherwise than by reason of a default or othertermination event), as well as any other derivative contracts relating to assets, rights, obligations, indices andmeasures not otherwise mentioned in this Section, which have the characteristics of other derivative Financial Instruments, having regard to whether, inter alia, they are traded on a regulated market or an MTF, are cleared andsettled through recognised clearing houses or are subject to regular margin calls.
We would like to bring to your attention certain of the perils associated with investments in complex Financial Instruments and enlighten you about the terminology associated with such products.
This notice cannot disclose all the risks and other significant aspects of warrants and/or derivative products such as futures, options, and contracts for differences. You should also be satisfied that the product is suitable for you in the light of your circumstances and financial position. Certain strategies, such as a ‘spread’ position or a ‘straddle’, may be as risky as a simple ‘long’ or ‘short’ position.Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. Different instruments involve different levels of exposure to risk and in deciding whether to trade in such instruments you should be aware of the following points.
Warrants / A warrant is a time–limited right to subscribe for shares, debentures, loan stock or government securities and is exercisable against the original issuer of the underlying securities.
A relatively small movement in the price of the underlying security results in a disproportionately large movement, unfavourable or favourable, in the price of the warrant.
The prices of warrants can therefore be volatile.
It is essential for anyone who is considering purchasing warrants to understand that the right to subscribe which a warrant confers is invariably limited in time with the consequence that if the investor fails to exercise this right within the predetermined time–scale then the investment becomes worthless.