AgeFX - CLIENT CATEGORISATION POLICY
1. General
According the Investment Services and Activities and Regulated Markets Law of 2017 (L.
87(Ι)/2017) (the “Law”), AgeFX (“the Company”) is required to categorise its Clients into one
of the following three categories: retail, professional or eligible counterparty.
“Retail Client” is a Client who is not a Professional Client by default, as defined in paragraph 2
further below. It is noted that Retail Clients are afforded with the highest level of protection.
“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, as further
detailed below (see paragraphs 2 and 3 below).
“Eligible counterparty” is a type of professional Clients, applicable only when the service
provided to such Professional Client is of receiving & transmitting and/or executing orders (see
paragraph 5 below).
2. Professional Clients by Default
The following entities that satisfy one or more of the following criteria shall be classified as
Professional Clients by default:
(a) Entities which are required to be authorized or regulated to operate in the financial markets
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: firms which provide investment services and/or perform investment activities
consisting exclusively in dealing on own account on markets in financial futures or
options or other derivatives and on cash markets for the sole purpose of hedging
positions on derivatives markets or which deal for the accounts of other members of
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those markets or make prices for them and which are guaranteed by clearing members
of the same markets, where responsibility for ensuring the performance of contracts
entered into by such firms is assumed by clearing members of the same markets.
Other institutional investors
(b) Large undertakings meeting two of the following size requirements, on a portfolio basis:
Balance sheet total at least USD 20.000.000
Net turnover at least USD
40.000.000
Own funds at least USD 2.000.000.
(c) National and regional governments, public bodies that manage public debt, Central Banks,
international and supranational institutions such as the World Bank, the International
Monetary Fund, the European Central Bank, the European Investment Bank and other
similar international organizations.
(d) Other institutional investors whose main activity is to invest in financial instruments,
including entities dedicated to the securitization of assets or other financing transactions.
3. Non-Professional Clients who may be Treated as Professional on Request
3.1. General
Clients not mentioned in paragraph 2 above, including public sector bodies, local public
authorities, municipalities and private individual investors, may also be allowed to be treated
as Professional Clients and hence waive some of the protections afforded by the Law.
The Company is allowed to treat any such Clients as Professionals provided the relevant criteria
and procedures mentioned herein below are fulfilled. These Clients should not, however, be
presumed to possess market knowledge and experience comparable to that of the categories
of paragraph 2. So, any waiver of the protection afforded to them shall be considered 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 envisaged, that the said Client is capable of making his own investment
decisions and understanding the risks involved.
For this reason, the Company will apply a fitness test to assess their expertise and knowledge.
3.2. Assessment
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In the course of the above assessment, as a minimum, two of the following criteria should be
satisfied:
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;
the size of the Client’s financial instrument portfolio, defined as including cash deposits
and financial instruments exceeds 500,000 USD;
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.
In the case of small entities, the person subject to the above assessment should be the person
authorised to carry out transactions on behalf of the entity.
3.3. Procedure
In order for the aforementioned Clients to be treated as Professional Clients, the following
procedure is followed:
The Client states in writing to the Company that it wishes 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 it a clear written warning of the protections and investor
compensation rights it may lose.
The Client must state in writing, in a separate document from the main Agreement,
that it is aware of the consequences of losing such protections.
Before deciding to accept any request for waiver, the Company must take all reasonable steps
to ensure that the Client requesting to be treated as a Professional Client meets the relevant
requirements stated above.
Professional Clients are responsible for keeping the Company informed about any change,
which could affect their current categorisation. Should the Company become aware that the
Professional Client no longer fulfils the initial conditions, which made the Professional Client
eligible such a treatment, the Company will take appropriate action.
Clients wishing to be treated as Professionals may submit the application form found on the
Company’s website.
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3.4. Keeping the Company Informed
All Clients are responsible for keeping the Company informed about any change which could
affect their current categorisation.
However, if the Company becomes aware that the Client no longer fulfils the initial conditions
which made it eligible for a professional treatment, the Company should take appropriate
action.
4. Professional Clients Requesting to be treated as Retail
It is noted that Professional Clients of paragraph 2 are allowed to request non-professional
treatment and instead be treated as Retail Clients, so as to enjoy a higher level 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.
This higher level of protection will be provided when a Client who is considered to be a
professional enters into a written agreement with the Company to the effect that it shall not
be treated as a Professional for the purposes of the applicable conduct of business regime.
Such agreement should specify whether this applies to one or more particular services or
transactions, or to one or more types of product or transaction.
5. Eligible Counterparties
An Eligible Counterparty is any of the following undertakings: Cyprus Investment Firms, other
Investment Firms, credit institutions, insurance companies, UCITS and UCITS management
companies, pension funds and their management companies, other financial institutions
authorised by a Member State or regulated under the laws of Cyprus or under European Union
law, national governments and their corresponding offices, including public bodies that deal
with public debt at national level, central banks, the Central Bank and supranational
organisations. Moreover, those included in Sections (31)(3) and 31(4) of the Law.
6. Types of Requests for Different Categorisation
The following requests may be submitted to the Company should a Client wish to change its
categorisation:
(a)
A Retail Client can request to be categorised as a Professional Client. The Client therefore
accepts a lower level of protection (see paragraph 3 above).
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(b)
A Professional Client can request to be categorised as a Retail Client. The Client therefore
obtains higher level of protection (see paragraph 4 above). A Professional Client can request
to be treated as an Eligible Counterparty, obtaining therefore a lower level of protection (see
paragraph 5 above).
(c)
An Eligible Counterparty can request to be categorised as a Professional Client or a Retail
Client. The Client therefore obtains higher level of protection (see paragraph 5 above).
It is noted that the Company is not required to agree with a request for non-professional or
non- Eligible Counterparty treatment. In addition, the Company may, on its own initiative, treat
as a Professional or Retail Client an Eligible Counterparty or treat as a Retail Client a
Professional Client.
7. Protection Rights
7.1. Retail and Professional Clients
Where the Company treats a Client as a Retail Client, the Client is entitled to more protections
under the Law, than if the Client was treated as a Professional Client. In summary, the
protections Retail Clients are entitled to are as follows (the list may not be exhaustive):
a) A Retail Client will be given more information disclosures with regards to the Company,
its services, its financial instruments and their performance, the nature and risks of
financial instruments, its costs, commissions, fees and charges and the safeguarding of
Client financial instruments and Client funds, including summary details of any relevant
investor compensation or deposit guarantee scheme, as applicable.
b) Where the Company is providing the services of Reception & Transmission of orders
and/or Execution of Client orders (, the Company shall ask a Retail Client to provide
information regarding his knowledge and experience in the investment field relevant
to the specific type of product or service offered or demanded, so as to enable the
Company to assess whether the investment service or product envisaged is appropriate
for the Client.
In case the Company considers, on the basis of the information received, that the
product or service is not appropriate to a Retail Client, it shall warn the Client
accordingly. Please note that the Company is not required to assess appropriateness in
certain cases specified by the Law (for example but not limited to the situation where
on an execution only basis the financial instrument concerned is not complex).
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On the other hand, the Company shall be entitled to assume that a Professional Client
has the necessary experience and knowledge in order to understand the risks involved
in relation to those particular investment services or transactions, or types of
transaction or product, for which the Client is classified as a Professional Client.
Consequently, and unlike the situation with a Retail Client, the Company should not
generally need to obtain additional information from the Client for the purposes of the
assessment of appropriateness for those products and services for which they have
been classified as a Professional Client.
c)
When executing Client orders, the Company must take all reasonable steps to achieve
what is called “best execution” of the Clients’ orders, that is to obtain the best possible
result for its Clients.
Where the Company executes an order of a Retail Client, the best possible result shall
be determined in terms of the total consideration, representing the price of the
financial instrument and the costs related to execution, which shall include all expenses
incurred by the Client which are directly related to the execution of the order, including
execution venue fees, clearing and settlement fees and any other fees paid to third
parties involved in the execution of the order.
When providing Professional Clients with best execution the Firm is not under an
obligation to treat overall costs as the most important factor in achieving best
execution for them.
d)
The Company must inform Retail Clients of material difficulties relevant to the proper
carrying out of their order(s) promptly upon becoming aware of the difficulty.
e) Under the law we are not allowed to enter into title transfer collateral arrangements
with Retail Clients whereas in the case of Professional Clients’ money and financial
instruments title transfer collateral arrangements are allowed. Title transfer collateral
arrangements means the change of title ownership of clients’ money and financial
instruments to be used as collateral against existing or future obligations. Money and
financial instruments that are subject to title transfer may not be segregated from our
assets and thus you are assuming credit risk against us.
f) Retail Clients may be entitled to compensation under the Investor Compensation Fund
(“ICF”) for Clients of Investment Firms, while Professional Clients are not entitled to
compensation under the ICF.
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g) Where the Company executes orders for retail clients, it shall provide those clients with
a summary of the relevant execution policy focused on the total costs they incur.
h) The Company limits the maximum amount of leverage provided to retail clients
compared to Professional Clients.
i)
The Company may apply different margin close-out level/stop out level to Professional
Clients compared to Retail Clients.
7.2. Eligible Counterparties
The Company does not classify any clients as Eligible Counterparties.
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