CONTRACT FOR ELECTRONIC TRADING. of financial instruments in international financial markets. No... /...

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1 CONTRACT FOR ELECTRONIC TRADING of financial instruments in international financial markets No... /... This Contract is made and entered into on..., by and between: FINEX OOD, having its registered office and principal place of business at Sofia 1784, r-n Mladost, ul. Mihail Tenev No 12, registered in the Commercial Register of the Registry Agency under EIK (entity ID code) , licensed by the Financial Supervision Commission (FSC) of the Republic of Bulgaria to conduct business as an investment firm, represented jointly and severally by its directors, Ivo Ivanov Seizov and/or Martin Boykov Parvanov, hereinafter referred to as "Investment Firm" or FINEX, and Personal No... (if any) ID Card No..., issued on... by... address of record:... (for individuals) hereinafter referred to as the CLIENT. The Parties hereby agree as follows: I. SUBJECT MATTER OF THE CONTRACT 1. This Contract governs the relationship between FINEX as а licensed investment firm and the CLIENT with respect to the investment services offered in EU Member States. 2. FINEX shall provide to the client the services of order reception and transmission for execution to the relevant market maker, financial markets or multilateral trading facilities via online trading system. The trading platforms, instruments available for trading, applicable terms and conditions are specified in an appendix to the account application form, as well as in this agreement, the order execution policy, the General Terms and Conditions Applicable to Contracts with Clients and other corporate documents. 3. In cases where the order is executed by a counterparty of FINEX or another market participant, the CLIENT shall receive information on the counterparty to the transaction. The CLIENT shall be duly informed if FINEX's counterparties under this Contract are changed. 1

2 4. FINEX shall enable the CLIENT to perform (execute) transactions under this Contract in compliance with the terms and conditions set out in the following documents. 1) Account Opening Application Form Appendix 1 FX and CFD TRADING TERMS and CONDITIONS Appendix 2 INTERNATIONAL STOCKS AND DERIVATIVES TRADING TERMS and CONDITIONS Appendix 3 - Bulgarian Stock Exchange 2) Client Order Execution Policy of the Investment Firm 3) Client Categorisation Questionnaire 4) List of Financial Instruments and Specific Trading Terms and Conditions 5) Fees and Commissions Tariff 6) General Terms and Conditions Applicable to Contracts with Clients 7) Statement under the Measures Against Money Laundering Act 8) Trading Platform User Guide 5. By signing this Contract, the CLIENT declare that: 1) They have read in full and understand the nature of this Contract and the additional documents relating to its implementation. 2) They are fully aware of the risks arising from trading financial instruments in international markets hereunder, their client categorisation and the consequent protection mechanisms applied by the regulatory authority. 3) They have read and accept the Fees and Commissions Tariff in force as of the time of conclusion of this Contract, as well as the method of calculating the cost of the transactions in financial instruments; 4) They have read and accept the General Terms and Conditions Applicable to Contracts with Clients in force as of the time of conclusion of this Contract and the relevant appendixes which are part of the account application forms and this Contract. 6. The financial instruments listed below shall be subject of the services hereunder: 1) FX/Contract for Differences or CFD means a financial instrument that allows traders to invest into an asset class without actually owning the asset. The CFD represents the right to receive, respectively the obligation to pay, the difference between the market value of certain financial instruments and the price fixed in advance in the order. 2) Stocks, shares "transaction in shares" means the purchase/sale of shares or common stocks traded on international financial markets; 3) Units in UCITS and other mutual funds (including ETFs); 4) Futures contracts the subject of transactions in futures are the exchange rate differences when buying/selling a futures contract, where the assets under those transactions are moved solely through the CLIENT's accounts with FINEX, pursuant to the terms and conditions hereof. In transactions hereunder, there shall be no physical delivery of the assets bought or sold. 5) Option contracts - the subject of transactions in options is to provide the right to buy/sell a financial instrument at a certain price on a specific date in the future. To acquire such a right, the CLIENT shall pay a fixed price in the form of a premium. The premium amount shall depend on the characteristics of the option that is the subject of the transaction. 6) Binary or Digital Options the subject of transactions in binary (digital) options is the payment of a fixed return upon attainment/non-attainment of a certain exchange rate of one (base) currency to another (additional) currency at a certain predetermined future date. 7. FINEX shall execute transactions under this Contract in compliance with the Client Order Execution Policy, which is subject to regular updates. The Client can obtain the latest Client Order Execution Policy on the official FINEX website ( specific trading platform or web platform and in the Company s office. 8. The investment services hereunder shall be rendered solely upon CLIENT s order. 9. Under this Contract, FINEX shall not give advice on buying/selling or investing in financial instruments, or legal, tax or other advice. The Client may use relevant third-party services. 10. FINEX shall accept execution orders for transactions in financial instruments registered for trading in international markets, in accordance with the rules of the relevant exchanges, their regulatory authorities and its counterparty broker, market-maker, clearing agent or other third-party service provider related with the relevant order execution. 11. This Contract shall enter into force after the CLIENT transfers the necessary amount into their account with FINEX, as set forth herein, to ensure the performance of their future obligations. 2

3 II. GUARANTEE 1. The minimum guarantee (deposit) hereunder shall be of an amount specific to each account type, and shall be determined in accordance with the rules and specific trading terms and conditions of the relevant trading venues. 2. FINEX shall continuously monitor the CLIENT's assets and shall provide the CLIENT with the requirements for using the guarantee as collateral, as set out in detail in the online trading platform s rules. The CLIENT shall be solely responsible for ensuring they have sufficient collateral for open margin positions. FINEX shall not be responsible for monitoring the CLIENT's account and for informing the CLIENT when the amount in the account is insufficient (Margin Call). 3. The guarantee shall be used to cover the risk of losses and to pay commissions, dividends, interest and other cash flows when trading in financial instruments hereunder. 4. When the guarantee reaches a value equal to or lower than the required amount, the CLIENT shall deposit the amount necessary to cover the shortage within one day. 5. FINEX shall deposit into the CLIENT's account the additional amount intended to cover the deficit as soon as it is received in order to protect the CLIENT's interests. 6. If the amount in the CLIENT's account is lower than the guarantee deposit required for the CLIENT's total position, FINEX shall take steps to close one or all of the CLIENT s positions to prevent further losses. 7. In cases where FINEX closes the CLIENT s positions, FINEX shall notify the CLIENT through an automatically generated message in the trading platform or by phone. The CLIENT shall unconditionally accept the price levels at which FINEX has closed their positions. 8. In cases where FINEX closes the CLIENT s positions, FINEX shall immediately notify the CLIENT, providing them with a report on the circumstances in which the positions were closed. III. DEPOSITS AND WITHDRAWALS 1. For the purposes of performing this Contract, FINEX shall open an account for the CLIENT in one of the following base currencies: USD, EUR or BGN. If the CLIENT deposits into the account funds in a currency other than the base currency, they shall be recalculated at the exchange rate of the Bulgarian National Bank ( BNB ) for the day. 2. When the CLIENT deposits funds, they shall become available in the CLIENT's trading account by the third business day. 3. The CLIENT may only withdraw funds from their accounts when they have no open positions, or if the CLIENT does have open positions, the funds withdrawn must not result in the current balance falling below the minimum amount set herein. 4. When the CLIENT submits a withdrawal request, the relevant amount shall be blocked and become unusable for the purposes of trading under this Contract. FINEX shall perform the CLIENT's withdrawal request by the third business day. 5. All transactions relating to depositing funds into and withdrawing funds from the CLIENT's account shall be performed in the account's base currency. 6. For fund withdrawal requests by the CLIENT, the relevant amount shall be paid out in USD, EUR or BGN or the equivalent in another currency, at the BNB exchange rate for that day. 7. FINEX will keep client funds in separate bank accounts intended for client funds only or in qualified money market funds. IV. COMMUNICATION BETWEEN THE PARTIES 1. Under this Contract, FINEX shall provide the CLIENT with a password for access to the electronic trading system, as well as a password for trading by phone. The CLIENT shall not provide their password and credentials to other parties and shall be solely responsible in doing so. 2. The CLIENT must use the password whenever communicating with FINEX. 3

4 3. FINEX shall accept trading orders or placement of orders through the electronic trading software or by phone. 4. By signing this Contract, the CLIENT gives their express consent for their phone calls to FINEX s dealer office to be recorded and monitored, if necessary. 5. FINEX shall accept trading or placement orders from the CLIENT only when the terms laid down in Section II hereof are met. 6. FINEX shall send to the CLIENT confirmation of the executed transactions and the account status only upon the CLIENT s request and to an address indicated by the CLIENT. 7. If FINEX has accepted a trading order in good faith even though that order is outside the scope of the CLIENT's representative authority, but meets FINEX s requirements for identification of the CLIENT, it shall be deemed, in the relationship between the Parties, that such an order has been given. The name of the person (calling) authorised to execute transactions, the number of their account with FINEX and their password for phone trades shall be deemed as proper and sufficient identification. 8. Except in cases of proven misconduct or gross negligence by the Investment Firm's employees, if for any reason the CLIENT is unable to reach FINEX, FINEX shall not be liable for any damages, losses or loss of expected gains resulting from the CLIENT's inability to give orders or have them executed. The CLIENT shall be entitled to receive confirmation of any transaction executed on their behalf, statement of balances and transactions on their financial instruments and cash accounts as of December 31 st of the relevant year and on request, as well as notifications of any material change in the organisation and activities of FINEX which may adversely affect the performance of this Contract. 9. The CLIENT may not ask the dealers of FINEX for explanations of actions performed or not performed by them. A statement on problems that may have arisen may only be required from the Investment Firm's manager. 10. The statement referred to in the preceding paragraph shall be prepared in writing by the Investment Firm within 14 calendar days and shall be provided to the CLIENT in electronic form within the next business day or in writing within 3 business days. V. GENERAL TERMS The terms mentioned herein are used in the trading of financial instruments and are as follows: 1. Account the financial instruments trading account opened in the CLIENT's name with FINEX. In accordance with the legislation in force, the CLIENT's funds must be deposited into dedicated client asset accounts with other financial institutions in the name of FINEX. The level of compensation from the Investor Compensation Fund to which the CLIENT is entitled if FINEX becomes insolvent shall depend on whether the CLIENT has been classified as a retail client, professional client or eligible counterparty. 2. Trading software this is the trading platform provided by FINEX, through which the CLIENT can electronically submit orders, execute transactions and monitor their account balance. The software supports encrypted communication between the CLIENT and the servers to which orders are transmitted. 3. Share a security certifying ownership of a proportional part of the capital of a certain company that can be traded on international markets and for which the CLIENT can receive quotes from FINEX. 4. Order this is any transaction order voluntarily and expressly submitted by the CLIENT through the electronic trading software, by phone or by any other method to which Finex has expressly agreed. 5. Open position availability of a certain number of bought/sold financial instruments in the account; 6. Opening a position purchase/sale of a certain number of financial instruments that were not available in the CLIENT's account until the time of execution of the transaction; 7. Closing (closure of) a position purchase/sale of a certain number of financial instruments that have already been sold/bought; 8. Active trading hours the time in which transactions can be executed on official markets in accordance with the rules of the exchanges on which the financial instruments are traded; 9. List of Exchanges and Financial Instruments Available for Trading this is a list of all markets to which the CLIENT has access for the purposes of trading and obtaining market information. FINEX shall promptly notify the CLIENT if a market or financial instrument in which 4

5 the CLIENT has an open position is about to be removed from the list to give the CLIENT a chance to close their positions at their own discretion. 10. Order amount unit price of the security multiplied by its quantity (number of financial instruments); 11. Financial derivative financial instrument issued on the basis of an asset, currency, good or index as insurance against risk or to achieve speculative profits from future changes in their prices. 12. Futures exchange-traded contract for the purchase/sale of a standardised volume of an asset, currency, good or index on a certain future date. 13. Purchase/sale of a futures contract purchase or sale of a certain number of futures contracts where the parties to the transaction do not have the obligation to physically deliver the relevant currency. 14. Put option right to sell the base asset for which the option has been issued on a certain future date at a certain price. 15. Call option right to buy the base asset for which the option has been issued on a certain future date at a certain price. 16. Purchase/sale of an option contract acquisition/grant of the right to buy/sell the base currency that is the object of the option contract on a certain future date at a certain price. 17. Order amount number of futures contracts or volume of the base currency for which an option contract has been issued, traded by the CLIENT. 18. Minimum order this is the minimum allowable number of units of the traded instrument for which FINEX provides quotes. 19. Long position this is the purchase of a futures contract, stocks, or currency by the CLIENT. 20. Short position this is the sale of a futures contract, stocks, or currency by the CLIENT. 21. Funds available in the account equal to the funds deposited into the account by the CLIENT adjusted by the result of closed positions, payment of dividends, interest, and other cash flows. 22. Guarantee deficit (margin call) this is a shortage in funds necessary to cover the requirements for a minimum deposit (margin). 23. Expiry Price this is the price of the asset when the contract on the asset expires. In abovebelow binary trading whether the option finished in-the-money or out of-the-money is based on the expiry price. 24. Payout this is the profit realised when a contract expires in-the-money. VI. NOTICE OF RISK AND RESPONSIBILITY 1. Trading in the financial markets poses substantial risks and is not suitable for every investor. 2. The CLIENT must carefully consider whether this type of activity is suitable for them, taking into account their own investment experience, goals and financial means. 3. The CLIENT must be aware that the existence of a margin deposit, which is usually required in these types of transactions, and changes in exchange rates may result in substantial losses, where all funds deposited and earned are lost. 4. The CLIENT declares that they are solely responsible and accept the risk of losing the funds invested. 5. The CLIENT has been notified that there are no guarantees for making a profit or avoiding losses in this type of trading, and that income from this activity is uncertain and may be volatile. Given that FINEX maintains the CLIENT's accounts, the latter declares that they will not hold FINEX liable for any losses. 6. Considering the great risks this type of trading poses, the CLIENT declares that they fully understand the nature of the present Contract they are entering into and the degree of risk to which they are exposed. 7. Trading in financial instruments is a speculative activity and the funds set aside for it constitute risk capital for the CLIENT. 8. Transactions in financial instruments are concluded by phone, after proper identification and provision of the password for phone transactions to the dealers at FINEX. 9. The CLIENT must keep their password secret and not provide it to third parties. FINEX shall not be liable in any way for transactions executed through the illegal use of the CLIENT's password. 10. FINEX shall be entitled to refuse to execute the CLIENT's instructions without having to give explanations for its actions, if there are circumstances giving rise to suspicions of illegal actions by the CLIENT. 5

6 11. FINEX shall notify the CLIENT upon any change to the General Terms and Conditions of the contracts, fees, commissions or any other documents hereunder. VII. REPORTING 1. FINEX shall keep records of the CLIENT's cash movements, transactions, fees and commissions charged, and the continuous revaluation of their open positions through the online trading software. 2. The CLIENT shall have access to daily and monthly statements of their trading account through a dedicated page on FINEX s website, for which they have received a username and password. 3. The CLIENT shall receive daily reports on all executed transactions and on open positions and pending orders, if they have expressly asked to receive such reports or on request, in compliance with the other provisions hereof. VIII. TERM AND TERMINATION GENERAL PROVISIONS 1. This Contract shall enter into force when funds are received into an account with FINEX or at a FINEX desk and access is granted for trading in the relevant market. 2. This Contract shall have a term of one year. 3. This Contract shall be extended automatically for a period of one year if the CLIENT does not notify FINEX that they wish to terminate it. 4. This Contract may be terminated early in the following circumstances: 1) By mutual written agreement of the parties; 2) With at least ten (10) business days' written notice to either party; 3) In other circumstances set out in the General Terms and Conditions Applicable to Contracts with Clients. 5. Within ten (10) business days prior to the expiration hereof or the submission of written notice of termination hereof, the CLIENT must instruct FINEX on the method by which they want to receive the amount available in the account after the closure of all positions in non-transferable financial instruments, as well as the transferable financial instruments available in their account. 1) 6. The Parties hereto shall not be liable for any default on this Contract caused by force majeure. For the purposes hereof, force majeure shall be unforeseen or unpreventable events of extraordinary nature occurring after the conclusion hereof, including, but not limited to, terrorist acts, natural disasters, breakdowns, political instability, banking system crashes, etc. 7. The party in default due to force majeure shall, within a reasonable period, notify the other party in writing of the nature of the force majeure and its potential consequences for the performance hereof. 8. The performance of the obligations and associated reciprocal obligations shall be suspended for the duration of the force majeure. 9. Except in the cases set out herein, any notice sent by FINEX by to the CLIENT in relation to the performance hereof or the amendment of the terms hereof (in the cases expressly set out herein, where an amendment may be made unilaterally by FINEX) shall be considered valid and binding upon the Parties hereto if made within the periods specified herein in one of the following ways: 1) On the FINEX website ( with respect to changes in the business hours of the exchanges to which the trading platform provides access, non-trading days for the markets and updates to the financial instruments admitted for trading, or 2) On the address provided by the CLIENT in the contact details section of the account opening application form; 10. Any dispute arising between FINEX and the CLIENT in relation to this Contract shall be resolved amicably. If the Parties are unable to reach an agreement, the contentious issues shall be referred for resolution by the competent court in the location where FINEX is headquartered. 11. The following shall form an integral part hereof: all appendices hereto, including General Terms and Conditions Applicable to Contracts with FINEX Clients, Client Order Execution Policy, Fees and Commissions Tariff, etc. 12. Changes to FINEX's General Terms and Conditions Applicable to Contracts with Clients and Fees and Commissions Tariff shall be adopted by the Sole Shareholder in FINEX and shall only be binding upon the Client if they have been duly notified of such changes. FINEX shall publish at a prominent place on its website ( any amendment or supplement to the General Terms and Conditions and/or the Tariff, including information on the adoption date and effective date of the amendment. The General Terms and Conditions and/or the Tariff shall be published at least one month prior to 6

7 the entry into force of the amendments or supplements. If the CLIENT does not agree with the amendments or supplements to the General Terms and Conditions and/or the Tariff, the CLIENT has the right to terminate the Contract without prior notice before the date of entry into force of the General Terms and Conditions and/or the Tariff; in such case the CLIENT shall not be liable for any penalties and expenses, except the expenses related to the assets held by the CLIENT. IX. RIGHTS AND OBLIGATIONS OF THE PARTIES 1. FINEX shall accept orders for the various financial instruments in accordance with the terms hereof. When accepting an order, the Investment Firm shall, through its employees, trading platforms or software, check the specifications of the order submitted by the CLIENT and monitor for an opportunity to execute the order in the CLIENT's interest. Before the order to be executed reaches the relevant market or execution venue, FINEX shall check the balances of the CLIENT's financial instruments and cash accounts, as well as the price range in which the order is executed in comparison with current market levels. 2. FINEX shall have no duty: to execute a trade on better terms than those stated in the order; to monitor or give advice on the status of any position; to call and inform the CLIENT of the current value of their collateral; or to close any position of the CLIENT, except in the cases set out herein. 3. The CLIENT undertakes to perform their obligations arising as a result of the executed transactions and agrees to be solely liable for the potential losses from those transactions, regardless of the collateral amount (margin). 4. The CLIENT may not ask FINEX for investment advice or an opinion on any transaction, which the CLIENT intends to use to execute a transaction. In cases where FINEX provides certain information on the market or on certain securities, such information should be regarded as informative, rather than as a recommendation to execute or not to execute a transaction. 5. By signing this Contract, the CLIENT agrees to rely on their own judgement when trading. FINEX shall not be liable for any losses resulting from closed positions, dividend or interest payments, or any other cash flows, incurred by the CLIENT due to inaccuracy or error in the information provided. Any transaction executed as a result of such an inaccuracy or error shall be valid and binding upon each Party. 6. By signing this Contract, the CLIENT gives their consent for all negative results, with respect to the CLIENT, of closed positions, dividend or interest payments, or any other cash flows stemming from transactions executed by the CLIENT hereunder to be directly set off against the amounts available in their accounts. FINEX shall directly transfer all positive price and interest differences, with respect to the Client, and dividends stemming from transactions executed by the CLIENT hereunder into the CLIENT s accounts. 7. Each order given, followed by a transaction, shall be binding upon the CLIENT, regardless of whether they breach limits or other requirements set for them by FINEX. 8. FINEX shall notify the CLIENT by phone of the execution of any order submitted by them and, within one (1) business day after the execution of the transaction, shall send or otherwise provide the CLIENT with written or equivalent confirmation of the executed transaction. X. DECLARATIONS 1.DECLARATION pursuant to Article 5a(1) of the Measures Against Money Laundering Act (MAMLA) in conjunction with Article 8a of the Implementing Rules of the MAMLA (IRMAMLA) am not and have never been a person under paragraph 1-9 am not a person related¹ to a person under paragraph 1-9 am/was in the last year prior to the signing of this declaration (mark as applicable) 7

8 am a person related¹ to someone under paragraph 1-9, namely (mark as applicable) 1. head of state, head of government, minister, deputy minister in Bulgaria, a foreign country or (and insofar as applicable) an institution or body of the European Union or an international organisation; 2. member of parliament in Bulgaria, a foreign country or (and insofar as applicable) an institution or body of the European Union or an international organisation; 3. member of a constitutional court, supreme court or another supreme judicial authority whose decisions are not subject to appeal, other than in extraordinary circumstances, in Bulgaria, a foreign country or (and insofar as applicable) an institution or body of the European Union or an international organisation; 4. member of a court of auditors in Bulgaria, a foreign country or (and insofar as applicable) an institution or body of the European Union or an international organisation; 5. member of a governing body of a central bank in Bulgaria, a foreign country or (and insofar as applicable) an institution or body of the European Union or an international organisation; 6. ambassador or the chief of a diplomatic mission of Bulgaria, a foreign country or (and insofar as applicable) or an institution or body of the European Union or an international organisation; 7. senior officer in the armed forces of Bulgaria, a foreign country or (and insofar as applicable) or an institution or body of the European Union or an international organisation; 8. member of administrative, managerial or supervisory bodies of state enterprises or companies wholly owned by the state; 9. municipal mayor or municipal deputy mayor, district mayor or district deputy mayor, or municipal council chair. 2.DECLARATION OF SOURCE OF FUNDS in relation to Article 4(7) and Article 6(5)(3) of the Measures Against Money Laundering Act I hereby declare that the funds in the amount of that I will deposit into the account(s) opened in my name/the name of with Finex Ltd originate from the following source PERSONAL FUNDS (savings) Other. 3.Declaration pursuant to the Foreign Account Tax Compliance Act (FATCA) DECLARATIONS YES / NO Do hereby declare that I am a U.S. citizen No Do hereby declare that I am a U.S. person for tax purposes No 8

9 If the answer to question 2 is YES, please provide TIN (Tax Identification Number) I am aware that making false statements is a crime under Article 313 of the Criminal Code. In the event of any change, I undertake to promptly update the information stated above. By signing this agreement I hereby declare that I have read and I agree with the following Documents: This CONTRACT FOR ELECTRONIC TRADING of financial instruments in international financial markets Client Order Execution Policy of the Investment Firm Client Categorization Questionnaire Trading Terms and conditions Fees and Commissions Tariff General Terms and Conditions Applicable to Contracts with Clients Statement under the Measures Against Money Laundering Act Trading Platform User Guide Date:... Client:... Finex Ltd:... (signature) (signature) 9