Client categorization policy

1.Preamble

VT PLAN & SECURITY Sarl (hereinafter referred to as «the Company»), registered under the laws of Switzerland, with federal identification number: CH-550.1.115.723-2.

The categorization of clients is an important part of investor protection as the legal protection afforded to clients differs depending on which category the client is in. Retail clients enjoy the greatest level of protection by law and professional clients and eligible counterparties enjoy less protection.

The objective of these rules is to ensure a consistent approach to categorizing clients and to specify the criteria which clients need to meet if they wish to be placed in a certain category.

2. Legal framework

The present Policy is in accordance and in line with the provisions of the Markets in Financial Instruments Directives MIFID I and MIFID II of the European Union which require categorizing their clients to determine the correct level of investor protection and transparency.

The Company is, therefore, categorizing Clients into one of the following three categories: retail, professional or eligible counterparty, and provides Company’s services only to clients who were categorized as professional client the relevant protection following the relevant Laws/and or Regulations, as per their classification.

3. Client classification

The Company, before engaging in a 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 categorized as follows, based on the criteria outlined below:

a. Eligible counterparties
The Company, when dealing with eligible counterparties, is exempted from important obligations under the conduct of business rules, best execution rules, client order handling rules. For that purpose, eligible counterparties may consider being falling within the following categories:
• investment firms
• credit institutions
• insurance companies
• open-ended investment funds (UCITS) and their management companies
• pension funds and their management companies
• other financial institutions authorized or regulated under Union law or national law
• 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.

The Company when enters into transactions with eligible counterparties obtains the express confirmation form the prospective counterparty that it agrees to be treated as an eligible counterparty. This confirmation may be obtained either in the form of a general agreement or in respect of each individual transaction.

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 to be a professional client, the client must comply with the following criteria:

1. Categories of the client who are considered to be professionals

The following shall all be regarded as professionals in all investment services and activities and financial instruments:

i. Entities which are required to be authorized or regulated to operate in the financial market, either from the Member States or non-Member States, such as:
• credit institutions
• investment firms
• other authorized or regulated financial institutions
• insurance companies
• 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.

ii. Large undertakings 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. National and regional governments, including public bodies that manage public debt at the national or regional level, Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB, and other similar international organizations.

iv. Other institutional investors whose main activity is to invest in financial instruments including entities dedicated to the securitization of assets or other financing transactions.
Where the client of the Company is an undertaking referred to above, the Company must inform it prior to any provision of services that, on the basis of the information available to the Company, the client is deemed to be a professional client, and will be treated as such unless the Company and the client agree otherwise. The Company must also inform the client that he can request a variation of the terms of the agreement to secure a higher degree of protection.
It is the responsibility of the client, considered to be a professional client, to ask for a higher level of protection when it deems it is unable to properly assess or manage the risks involved.

2. Clients who may be treated as professionals on request

2.1. Identification criteria
Clients other than those mentioned above including public sector bodies, local public authorities, municipalities, and private individual investors, may also be allowed to waive some of the protections afforded by the conduct of business rules.

The Company shall, therefore, be allowed to treat any of those clients as professionals provided the relevant criteria and procedure mentioned below are fulfilled. Any such waiver of the protection afforded by the standard conduct of business regime shall be considered to be valid only if an adequate assessment of the expertise, experience, and knowledge of the client, undertaken by the Company, gives reasonable assurance, in light of the nature of the transactions or services recommended, that the client is capable of making investment decisions and understanding the risks involved.

In the course of that assessment, at a minimum, two of the following criteria shall be satisfied:
a) 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,
b) the size of the client’s financial instrument portfolio, defined as including cash deposits and financial instruments exceeds EUR 500 000,
c) 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.

When evaluating criterion a), the client shall submit a statement containing information on transactions.
When evaluating criterion b), the net value of the client’s financial instrument portfolio is used as a reference. Deposits are considered to be part of the financial instrument portfolio. The client shall submit a statement containing information on the financial instrument portfolio and/or deposits. Assets belonging to a spouse, dependent children or related undertakings are not considered.
When evaluating criterion c) the client shall provide information and/or material on which professional position they have held on a financial market which they believe meets the stipulated criterion and when they held this position. Examples of positions which meet this criterion are fund manager, broker, position in asset management, direct involvement in a Company’s securities issues, etc.
The Сompany is entitled at its discretion to request other documents and (or) information that will help it classify the client as a professional client.

2.2. Procedure
Those clients may waive the benefit of the detailed rules of business conduct only where the following procedure is followed:
– they must state in writing to the Company that they wish to be treated as a professional client, either generally or in respect of a particular investment service or transaction, or type of transaction or product,
– the Company must give them a clear written warning of the protections and investor compensation rights they may lose,
– they must state in writing, in a separate document from the contract, that they are aware of the consequences of losing such protections.

The client´s contact person gathers the required information and material from the client to assess the above. The client´s contact person and a manager shall confirm whether the client meets the criteria set out in these rules on changing category. The client shall be informed of the conclusion reached.

Before deciding to accept any request for a waiver, the Company must be required to take all reasonable steps to ensure that the client requesting to be treated as a professional client meets the relevant requirements. Before a retail client can be treated as a professional client, the client’s expertise, experience, and knowledge must be assessed, in light of the nature of transactions or services envisaged, to give reasonable assurance that the client is capable of making his own investment decisions with full comprehension of the risks involved. In particular, the Company requests and obtains from the client in addition to the KYC documents, not limited to the following pieces of evidence proving the client’s knowledge and experience for example financial information, CV, any other relevant certificates.

In case the Company doesn’t have enough information and/or documents to categorize the client as a professional client, the client will be classified by default as retail, offering the maximum protection.

Professional clients are responsible for keeping the Company informed about any change, which could affect their current categorization. Should the Company become aware however that the client no longer fulfills the initial conditions, which made him eligible for a professional treatment, the Company shall take appropriate action. If information is brought to the attention of the Company after the initial categorization of the client that could result in a change in the categorization of the client, the Company shall take appropriate action.

c. Retail clients
Every client, which means a client who is not a professional client.

4. The Company liabilities

In light of MiFID II, the Company will ensure that in its dealings with clients it will apply the following –
• to act honestly, fairly and professionally;
• to communicate in a way which is fair, clear and not misleading.

5. Request for change in classification

After the Company has categorized the client as a retail client, a professional client, or an eligible counterparty, the client may request for their category to be changed. For example, a professional client may ask to be categorized as a retail client as a result of a change in circumstance. Similarly, an eligible counterparty may request to be categorized either as a professional or a retail client. It is the responsibility of a professional client or eligible counterparty to ask for a higher level of protection when it deems it is unable to properly assess or manage the risks involved.

Please be informed that you have the right to request a different categorization to benefit from a higher degree of regulatory protection. Any such request should be made in writing. However, the Company reserves the right to reject any such request if it considers that this is not appropriate.
The Company may at any time opt a client down, at its initiative, granted the Company does not discriminate between clients. Therefore, the Company may decide to categorize a professional client as a retail client and an eligible counterparty as a professional client or retail client. Clients shall be informed of any such change.

Should the Company become aware that a client no longer meets certain criteria, appropriate actions shall be taken. The Company can at any time request information and/or documents to confirm that a client meets the applicable criteria.

6. Updates

As far as the Company introduces new products or services, or as the Internet and computer security technology evolves or in Company’s sole discretion at any time, this Client categorization policy will be updated. The Company consequently reserves the right to change or supplement further explanations as needed, and changes will be published on this page of the Company’s website. The Acquirer (you) must periodically visit the Company’s website to review any changes that may be made to this Client categorization policy. Acquirer (you) continued use of the Company’s website or FDM Platform constitutes Acquirer’s agreement to be bound by any such changes to this Client categorization policy.