First of all, it is important for you to know that your investments are protected by the Investor Compensation scheme for up to 20 000 EUR. The purpose of the scheme is to guarantee the protection of the funds invested by investors via investment institutions in the event of an investment institution’s insolvency. Please find more detailed explanation of the conditions and terms of the scheme at our webpage: Information about the Investor Compensation scheme.
The safekeeping of your Portfolio assets is our top priority. We hold your Portfolio assets at Clients Securities Account and Clients Cash Account together with other clients’ assets but always separated from our assets. All the assets at the aforesaid client accounts belong to clients.
We hold your Portfolio assets in Clients Securities Account (i.e. in custody/depositary in an omnibus or nominee account (i.e., the account used for keeping several clients’ assets on the same account together) opened with third-party custodian / depository)). You should know that on some occasions your financial instruments may by our partner custodian/depository in turn be passed on to another sub-custodian and so on. We will at all times keep records of your assets in our internal IT systems, and we always know the content of your Portfolio, but your assets are not individually identifiable in custodian registers as your assets.
We shall avoid transferring your financial instruments for holding to persons that are established in a non-EEA Member State, where storing and protection of another person’s Financial Instruments is not specifically regulated. Nevertheless, we may derogate from this requirement if due to the nature of the financial instruments or investment services pertaining to them, such financial instruments must be held in custody by a person located in such non-EEA Member State. Where the law of a non-EU Member State is applied in respect of the accounts in which the Financial Instruments belonging to the Client are accounted for, the rights granted by the financial instruments belonging to the client may change accordingly. The Client’s Financial Instruments issued by issuers registered in foreign states may be held in custody by another custodian.
We will not provide any third-party liens or rights of set-off over client or any other rights as regards to your assets enabling a third party to fulfil its claims on your assets in order to perform obligations that do not relate to you, except where this is required by applicable law in a third country jurisdiction in which your funds or securities are held.
We want you to acknowledge before you enter into an Agreement with us that the legal and/or regulatory requirements and market practices that apply in each jurisdiction for the separate identification and segregation of the assets may be different in different situations and jurisdictions.
This may have any of the following consequences depending on the situation:
a) sometimes national legal acts applicable to a particular third person, may foresee that assets may be not separated from the financial instruments belonging to you, us or that third person, and you should understand that such financial instruments may be subject to claims against another client, against us or against another third person;
b) when holding assets on an omnibus account at the custodian and/or in situations where the custodian has sub-outsourced the custody service to another third person involves the risk that in some situations your assets might not be safe and/or there might be difficulties to keep record of your assets and it might be difficult to establish your ownership and title of relevant assets,
c) assets held by a third party who is subject to insolvency (or any similar proceedings) may not be treated in the same way as they would be if they were held by us or in our name (for example, a relevant third party (or an insolvency practitioner appointed to deal with the assets of the that third party) may claim to have a lien or other security interest in respect of our clients’ assets;
d) assets held and located in a different jurisdiction, may not be segregated and separately identifiable in the same way as they would be if they were held in the jurisdiction of our direct partner third-party custodian (this means that, in the event of a failure, the assets may not be as well protected from claims made on behalf of general creditors);
e) assets held on your behalf may be pooled with the assets of other clients at the third party or at forwarded third party;
f) in the event of an unreconciled shortfall caused by the default of a custodian or any third party, you may share proportionately in that shortfall.