Information Brochure Markets in Financial Instruments Directive (MiFID II)

Transcription

1 Information Brochure Markets in Financial Instruments Directive (MiFID II) 1. JANUAR 2018 FRÜH & PARTNER VERMÖGENSVERWALTUNG AG Postfach 765 Landstrasse Vaduz Liechtenstein

2 Introduction / Preliminary remark The EU Markets in Financial Instruments Directive (MiFID) has governed securities trading in Europe since November Due to the changed market structure, the innovations on the financial markets and the consequences of the financial crisis, the EU revised the directive in early The aim of the MiFID II Directive is to increase transparency in the markets and the efficiency and integrity of the financial markets. As a member state of the European Economic Area (EEA), Liechtenstein is obliged to incorporate this requirement of the EU into national law. The acquisition takes place v.a. by adapting the Liechtenstein Banking Act and its associated Banking Ordinance as well as the Law on Asset Management (VVG) and the associated ordinance. Purpose and purpose as well as content of the brochure From 3 January 2018, the Asset Management Act (VVG) and the associated Asset Management Regulation (VVO) of the Principality of Liechtenstein require from the asset managers providing investment services and / or ancillary services detailed information about the new rules on the services they offer and provide products. This brochure is intended to give you an overview of the Investment Manager and its services related to the settlement of investment services. The core of this information is the fourth part concerning "investment services and financial instruments offered by VV". These statements are not intended to cover all aspects of the securities business comprehensively. Where necessary, this brochure refers to further documents that the asset manager has already given you or can be obtained from the asset manager free of charge. The table of contents should help you to quickly find your way around the booklet. Study this booklet carefully and inquire with us if you have any questions. 1 / 13

3 The booklet uses many terms and terminology. It relies on the terms already used by the legislator. Wherever we considered it necessary, we have explained the terms used in footnotes or refer to the relevant legal bases. We reserve the right to inform you only about material changes to the contents of this brochure. 2 / 13

4 Inhalt Introduction / Preliminary remark... 1 Purpose and purpose as well as content of the brochure General information Information about the asset manager Communication language and means Contract and Terms of Business Client classification Classification by the VV Non-professional client / retail investor Professional client Suitable counterparty Reclassification financial instruments Investment services and ancillary services Execution Only Consulting and asset management Consulting-free business / 13

5 1. General information 1.1. Information about the asset manager The Frueh & Partners Asset Management Ltd., hereinafter referred to as "VV", has its registered office at the following address: Landstrasse 39, 9490 Vaduz, Liechtenstein It is an asset management company registered in the legal form of a stock corporation in the public register of the Principality of Liechtenstein. He holds a license from the Liechtenstein Financial Market Authority (FMA) and is responsible for its supervision as a VV. The VV is a member of the Association for Independent Asset Managers (VuVL) and serves to protect the client funds of affiliated participants in the Investor Compensation Scheme operated by the Deposit Guarantee and Investors' Compensation Foundation SV (EAS) FL and complies with EU law Communication language and means The relevant language for the contractual relationship between VV and the client is German. However, you can always communicate with us in English or - if agreed with you - in another language. Contract documents and documents are always drafted in German, unless otherwise agreed between VV and the client. 2. Contract and Terms of Business The rights and obligations between VV and you in connection with the execution of investment services and / or ancillary services are governed by the terms and conditions. In particular, the General Terms and Conditions (GTC) of the VV are decisive. This brochure serves as supplementary information. 4 / 13

6 3. Client classification 3.1 Classification by the VV Clients are informed about their classification as "non-professional client", "professional client" and "suitable counterparty". Existing clients, however, will only be notified upon reclassification. The asset management companies are obliged to classify their clients into one of the named client categories according to legally prescribed criteria. Classification is intended to ensure client treatment tailored to the knowledge and experience of transactions in financial instruments and the nature, frequency and extent of such transactions Non-professional client / retail investor As a "non-professional client" (private investor), we consider you if you can not be classified as either a "professional client" or a "suitable counterparty". This classification will benefit you from the highest level of protection provided by law Professional client To be able to view you or your company as a "professional client", various legal criteria must be met. A "professional client" has a lower level of protection than a "non-professional client". In contrast to the "non-professional client", we assume that the "professional client" has sufficient experience, knowledge and expertise to make investment decisions and adequately assess the associated risks Suitable counterparty Only eligible legal entities, larger companies, as well as governments, central banks, and international or supranational organizations may qualify as "eligible counterparties". They benefit from the lowest level of protection. In this client category too, we assume that the persons involved have sufficient experience, knowledge and expertise to make investment decisions and to be able to appropriately assess the associated risks. In addition, however, we do not provide investment advisory and asset management services to such clients. If a client who is classified as a "suitable counterparty" still wants to use such services, we treat him as a "professional client". 5 / 13

7 3.2 Reclassification You have the option at any time to agree a different classification with the VV in writing. Please note that changing the classification also involves a change in the level of protection provided by law and applicable to you. Then we would like to draw your attention to the fact that the VV may only agree to such a reclassification if certain specific requirements are met. Thus, only those clients can be reclassified from the status of "non-professional" to "professional", which meet at least two of the following criteria: During the four preceding quarters, on average, 10 significant transactions were made on the relevant market per quarter; financial instruments portfolio, which by definition includes cash deposits and financial instruments in excess of the equivalent of more than EUR 500,000; Please note that the VV will only reclassify in relation to all investment services, ancillary to-market services and financial instruments. If the VV comes to the realization that you no longer meet the conditions of the client class in which you are classified, the VV is obliged to make an adjustment on its own, the VV will inform you immediately. It is also your obligation to inform the VV if one of the conditions is no longer present. 6 / 13

8 4. Information about the investment services and financial instruments offered by VV 4.1. financial instruments Trading in financial instruments involves financial risks. Depending on the financial instrument, these risks can be very different. In principle, a distinction must be made between so-called "non-complex" and so-called "complex" financial instruments. The types of financial instruments that exist and the associated risks are described in more detail in the brochure "Risks in Securities Trading of the Liechtenstein Bankers Association" Investment services and ancillary services We will, if possible, provide you with all types of investment services and ancillary services, in particular in connection with the purchase and sale of financial instruments. VV manages buy and sell transactions as an executiononly or advice-free transaction or as part of asset management Execution Only Previously, it was understood that buying or selling transactions, which were made on your behalf and had "non-complex" financial instruments as the object, so-called execution only, resp. were executed as pure execution business. MiFID II does not permit execution only in the case of Lombard loans, derivative structures and structures that make it difficult for the client to understand the risks involved. Execution Only is allowed for the following financial instruments: - Shares admitted to trading - Bonds and bonds admitted to trading - money market instruments - UCITS funds - Structured deposits - other financial instruments previously classified by the VV as "non-complex", 7 / 13

9 In the case of such execution only transactions, regardless of the customer classification, it is checked whether the corresponding business is appropriate to the experience and knowledge of the respective customer Consulting and asset management At your request, we provide advisory or asset management services. By consultation we understand the delivery of a personal recommendation to the client, which refers to one or more financial instruments. The purchase or sale decision including the corresponding implementation at the custodian bank remains with the client. Under Asset Management we see the management of individual or aggregate (portfolio) financial instruments of the client on an individual basis and according to the investment strategy agreed between the client and the VV. With asset management, the client delegates the decision on the individual investments to be made to the VV. VV offers its clients independent advice and asset management. Before consulting, VV informs you why an independent asset management is provided and about their investment restrictions. This also includes the prohibition on giving or accepting incentives. The VV also informs you about the range of financial instruments available, including the relationship with issuers and providers. Basically, the VV offers all types of financial instruments. A regular assessment of the suitability of the recommended financial instruments is provided by VV to the client. In the case of investment advice as well as asset management, the VV - if not yet available - must obtain information by law beforehand. These include - where relevant - information about: 8 / 13

10 1.) Knowledge and experience in the investment business, including: information on the type of services, transactions and financial instruments with which you are familiar, as well as the nature, extent and frequency of your transactions in financial instruments, education and employment or previous professional activities. 2.) Your investment objectives, including: information about the intended investment purpose, the time investment horizon, the risk appetite, the risk profile and the risk tolerance. 3.) Your financial circumstances, including: information on the source and amount of regular income and obligations, total assets, including liquid assets and real estate, and the ability to incur losses. Obtaining this information will enable VV to recommend the appropriate financial instrument transactions or asset management activities to you. The VV considers suitable only services and financial instruments: - which correspond to your investment objectives and personal circumstances regarding the required investment period; - whose investment risks are financially sustainable for you; - whose risks you are able to understand based on your knowledge and experience (suitability or suitability test). Before carrying out the transaction, the client, after consulting VV, receives a declaration of suitability on a durable medium in which the VV mentions the advice provided and explains how the consultation was tailored to the client's preferences, objectives and other characteristics. If the agreement to buy or sell a financial instrument is made using a means of distance communication and the prior delivery of the aforementioned suitability statement is therefore not possible, the VV may provide you with the written declaration of suitability on a durable medium immediately after your agreement have tied. This is possible if the following conditions are met: 9 / 13

11 a) you have agreed to the transmission of the suitability statement immediately after the conclusion of the transaction, and b) The VV has given you the option to postpone the transaction in order to obtain the suitability statement in advance If you have been classified as a "professional client", the VV assumes that you have the necessary knowledge and experience. If you are a so-called "born professional client" (see Annex II Section 1 of the MiFID II Directive), in the context of investment advice, the VV continues to assume that any risks associated with the transaction are financially viable for you. In order to assess the experience and knowledge of legal persons, we use the experience and knowledge of the natural persons acting on behalf of the legal entity. For this purpose, together with these natural persons, we establish a uniform profile for the entire legal entity with regard to experience and knowledge. In the case of a power of attorney, the VV shall, with regard to the assessment of experience and knowledge, assign the person who in each case corresponds to the VV. If in doubt, act for your protection to the person who has little knowledge and experience in the risks associated with the particular business. In our assessment, we rely on the information you provide and assume that it is correct. If you fail to give us or inadequately the information and information requested by us, we are prohibited by law from giving you a recommendation. It is therefore in your own interest to provide us with the required information. 10 / 13

12 Consulting-free business Buy or sell transactions that are neither executed within the framework of an investment advisory service or asset management nor as an execution-only business are carried out by us as a non-advisory business. Here too, we have by law to obtain the above information on your knowledge and experience in the investment field, in order to assess whether, based on your experience and knowledge, you are able to understand the risks associated with the service or financial instrument (appropriateness test). On the other hand, an assessment of the financial viability of the investment risks associated with the relevant service or financial instrument does not take place. Likewise, the definition of an investment objective is omitted. If you have been classified as a "professional client" or even as a "suitable counterparty", we assume that you have the necessary knowledge and experience to understand the risks involved. In the case of legal persons or in the presence of a power of attorney, this applies under. Para executed. If we conclude that the service or financial instrument is inappropriate for you when assessing reasonableness, or if we do not have all the information necessary to assess the adequacy, you will be warned accordingly. If we can not reach you for the purpose of such a warning, either because you did not want us to contact you, or if it was not available at short notice, we reserve the right, in case of doubt, not to execute the order for your protection. 11 / 13

13 5. Principles of order execution We provide all investment services and ancillary services honestly and professionally and in the best interests of our clients. We take all necessary measures to achieve the best possible execution (so-called best execution) of client orders, taking into account the different types of clients appropriately. The principles according to which we execute our clients' orders have been summarized in our Execution Policy. 6. Costs and incidental costs associated with investment services and ancillary services The VV will disclose the costs and ancillary costs of securities (ancillary) services as well as costs and ancillary costs in connection with the conception and management of the financial instruments (calculation of fees). In this context, VV will also provide you with an illustration of the impact of total costs on the return. The guidelines for cost transparency also apply to professional clients. Insofar as the VV provides you with information on costs in advance (ex ante), these are estimates. The actual costs incurred will be disclosed to you ex post and may deviate from the ex-ante estimate. In the ex-post presentation of costs, the VV relies on data delivery from the respective banks, product providers and information service providers. These may use different settlement deadlines, different prices (for example, daily mid-market prices, stock market closing prices) and foreign exchange rates and conversion dates. This can lead to differences and billing and rounding differences. 12 / 13

14 7. Client billing / reporting The VV periodically transmits a statement of assets, at least once a quarter. The VV will provide you with regular client reporting on a durable medium, usually on a quarterly basis after the end of each calendar quarter. For credit-financed portfolio monthly after the end of each month. The VV sends the client immediately after execution of a securities trading transaction made for him a transaction settlement. The reporting must include an updated explanation of how the portfolio management has been tailored to the client's preferences, objectives and other characteristics. As part of asset management, you receive a loss threshold report from the VV if the total value of the portfolio falls by 10%, and then every 10% decrease in value. 8. Product Governance Distributors of financial market instruments must have an appropriate product governance process to ensure that the products and services offered are compatible with the needs, characteristics and objectives of the target market. 13 / 13