Information for the clients

Transcription

1 Information for the clients Visio Asset Management Ltd (in Finnish: Visio Varainhoito Oy) (Business ID: , domicile: Helsinki, Finland) Aleksanterinkatu 21 H FI Helsinki FINLAND Tel visio@vam.fi Web page: The Company Visio Asset Management Company Ltd ( Visio, the Company ) is an investment services company operating in accordance with the Act on Investment Services (747/2012). Visio has been issued a license to operate as an investment services company on 15 October The license covers reception and transmission of orders and asset management. The license was issued, and the Company s operations are supervised by the Finnish Financial Supervisory Authority (Snellmaninkatu 6, Helsinki, Finland, tel , The Company s marketing material, agreements and reports are available in Finnish. The Company does not use tied agents. Client Classification Criteria An investment service company is required to inform its client about the client's classification as either a nonprofessional client, professional client or eligible counterparty. The classification is directly based on legislation and the factors that affect the classification are defined in detail in the Act on Investment Services. The client's classification affects the extent of investor protection and the applicable code of conduct. Visio usually classifies all of its clients as non-professional clients at the beginning of the client relationship. The client has the right to apply for a change to the client classification made by the investment services company. The application must be submitted in writing. Changing the classification may have an effect on investor protection and the application of the code of conduct. A professional client may request to be considered a non-professional client or eligible counterparty and a non-professional client may request to be treated as a professional client. A client classified as an eligible counterparty may request to be considered a professional or non-professional client. Visio considers the conditions for the classification change on a caseby-case basis and decides whether to accept the client's application or not. A professional client is obligated to request to be treated as a non-professional client if the client deems that he or she does not have adequate experience and knowledge to evaluate or manage the risks involved with the service or the related business transactions. According to Finnish law, non-professional clients are protected by the Investor's Compensation Fund. This fund compensates the investor for losses incurred in situations where a member of the fund has failed to settle the investor's clear and undisputed receivables as agreed. The amount of compensation payable to a single investor equals nine-tenths of the amount of the claim that the investor has on a single service provider, up to the maximum sum of The fund does not compensate for losses arising from declines in stock prices or wrong investment decisions, which means the client is still responsible for the consequences of his or her own investment decisions. 1

2 Effects of client classification on the applicable code of conduct Client classification has effect on the applicable code of conducts. Non-professional clients are to be given the terms and conditions of the agreement and adequate information on both Visio and the provided service prior to, or immediately after, entering into a written agreement. The client must also be notified of significant changes to said information. The information is provided on Visio's web pages. Non-professional clients When providing the asset management service to a non-professional client, Visio is required to ask the client for information on the client's financial status and investment goals and the client's or his or her representative's investment experience and knowledge of the financial instrument or the investment service in question in order to be able to recommend appropriate financial instruments or services to the client. The purpose of the assessment of appropriateness is supply Visio with the adequate and relevant information, which are necessary in order to understand the relevant circumstances of each client and to make it possible for Visio to act in the client's best interest. Visio has the right to trust the information provided by the client. Based on the information submitted to it by the client, Visio must assess whether the given investment advice or the provided service meets the client's investment goals, and whether the client is able to bear the possible financial risk and if the client has the required investment experience and knowledge to understand the risks involved in the recommended course of action and the offered investment service as a whole. If sufficient information is not available, Visio cannot recommend the investment service or financial instrument in question to the client. Professional clients Professional clients are to be given a general description of the nature of the financial instruments that are the subject of the service and the risks typically involved in them, if deemed necessary in view of the client's investment experience. A professional client is only partially protected by the code of conduct. When providing the asset management service to a professional client, Visio is required to ask the client for information on the client's financial status and investment goals in order to be able to recommend appropriate financial instruments or services to the client. Visio has the right to trust the information provided by the client. In the event that the client is classified as a professional client directly by law, Visio may assume, when performing the asset management service, that the client is able to financially bear the investment risks of the client's investment goals and the recommended transactions and there is therefore no need to determine the client's financial status. Based on the information submitted to it by the client, Visio must assess whether the given investment advice or the provided service meets the client's investment goals. If sufficient information is not available, Visio cannot recommend the investment service or financial instrument in question to the client. Eligible counterparty An eligible counterparty may submit a request to Visio in writing that the code of conduct designed to protect investors be applied to transactions entered into with the eligible counterparty either in general or in the case of an individual transaction. Visio considers each request on a case-by-case basis. In other cases, the code of conduct and regulations concerning investor protection do not apply to eligible counterparties. Suitability assessment In the context of asset management, the suitability assessment is the process of collecting information on a client and then, based on this information, assessing the appropriateness of a certain service or financial instrument for the client in question. When providing asset management services to a non-professional client, Visio must obtain information on the client's financial status and investment goals and the client's or his 2

3 or her representative's investment experience and knowledge of the financial instrument or the investment service in question in order to be able to conduct the suitability assessment and recommend the appropriate financial instruments or services to the client. Investors Compensation Fund Visio is a member of the Investors' Compensation Fund insofar as the investment services it provides are concerned. The fund's protection extends to non-professional clients who have been offered an investment service. The compensation fund does not compensate professional clients. In the event that the investment services company has not settled the clear and undisputed receivables of the investor it controls or administers as part of the provided investment services in accordance with the law or the agreement, the client may bring the matter to the Finnish Financial Supervisory Authority. The Financial Supervisory Authority decides whether the Investors' Compensation Fund must settle the investor's receivables. In order to receive this compensation, the failure to settle the receivables must result from bankruptcy or reorganisation of the investment services company, or from other insolvency of the company that is not temporary in nature and that has been sufficiently documented and reported. The amount of compensation payable to a non-professional client equals 90% of the amount of the claim that the client has on the investment services company, up to the maximum sum of More information can be found on the website of the Investors' Compensation Fund ( Inducements Inducements refer to charges and other benefits given or received from a third party in conjunction with offering investment or ancillary services. MiFID s provisions relating to the protection of clients interest restrict firms which provide investment services from giving or receiving inducements in relation to the provision of investment services to their clients, except under permitted conditions. Visio may, in connection to investment or ancillary services, pay fees to or receive fees from, a third party. Visio has distribution partners with whom it has agreed on inducements. The purpose of such fees is to improve the quality of the service Visio provides to its clients in accordance with their best interests. Distribution agreements are normally made with regulated entities which comply the requirements of MiFID regulations. The fees are primarily used to cover the costs of activities and their purpose is to improve the quality of service offered to clients or to make it possible to offer and maintain certain services. The fees mostly relate to subscription, redemption and management fees related to Visio funds. Under Visio s internal guidelines, the payment or receipt of such fees is not permitted to give rise to conflicts of interest between Visio and the client or to activities that are partial or contrary to the interest of the client. Fees to distribution partners are paid by Visio Asset Management Company. No double fee will be charged from the clients. Client s responsibility Investment activities always involve financial risk. Invested capital can be lost either entirely or in part and the sought-after profits may never be realised. Prior to making an investment decision, the client should become acquainted with the investment markets, the different investment options, the effects investing may have on taxation and the investment agreement and its terms and contents. The client is solely responsible for the financial outcomes of his or her investment decisions and the impacts the investment activities may have on his or her taxation. 3

4 The main features of the offered investment services and the financial instruments targeted by the investment service Investment activities always involve financial risk. Invested capital can be lost either entirely or in part and the sought-after profits may never be realised. Prior to making an investment decision, the client should become acquainted with the investment markets, the different investment options, the effects investing may have on taxation and the investment agreement and its terms and contents. The client should consider how the costs of the investment service diminish the return on investment (ROI) and that past performance is not a guarantee of equivalent performance in the future. The client is solely responsible for the financial outcomes of his or her investment decisions and the impacts the investment activities may have on his or her taxation. Mutual funds An investment fund compliant with the Act on Common Funds is handled by a fund company, which collects assets from private persons and corporate bodies into an investment fund and invests them in several individual securities. The assets in the investment fund are owned by investors in proportion to their invested shares. The rules and regulations of the fund set forth the goals of the investment activity and related restrictions. Before making a decision to invest, the investor should familiarise him/herself with the investment fund rules, key investor information document and price list or similar documents. In a situation of investment fund insolvency or the fund investments losing their value, the investor may lose his/her investment either in full or in part. Investment funds represent, with respect to their legal structure, several different types. Investments fund compliant with Finland s Act on Common Funds are either UCITS funds or special investment funds. UCITS funds observe the UCITS Directive with regard to diversification of investments and operational regulations. Special investment funds on their part deviate from the UCITS Directive. In special investment funds, there may be, e.g. provisions to ensure that they need not follow the same broad diversification of a UCITS fund, or conversely redemptions from the fund may be considerably limited. Investment funds can be divided in many different ways. They can be divided in accordance with their investment strategies: for example, into equity funds, combination funds and interest funds. Most investment funds observe principles concerning diversification of risk in their investment policies. Funds that have, for instance, exceptional principles with regard to diversification risk are special investment funds. Special investment funds are not only more flexible than other funds in their investment restrictions but are also, for example, protection funds that endeavor to protect capital and leveraged funds which use derivative contracts in their investment activity (e.g. options and forward contracts). Fund subscriptions and redemptions Fund units are offered to be subscribed and redeemed in Fund Management Company and in other subscription locations decided by the Board of the Fund Management Company on each banking day. The subscription date is the banking day on which the subscription order has been received and registered by the Fund Management Company and the subscription amount is available for use by the Fund Management Company, no later than at 1pm Finnish time. The subscription price is the fund unit value calculated for the subscription date. If the subscription order is registered and/or the subscription amount arrives for use by the Fund Management Company after 1pm Finnish time, the subscription will be executed on the following banking day. Fund units are redeemed by submitting an order and surrendering any unit certificates to the Fund Management Company. If the Fund Management Company does not need to sell investments to execute the redemption, then the redemption demand received and registered by the Fund Management Company no later 4

5 than at 1pm Finnish time will be executed at the fund unit value calculated in the Fund Management Company for the same banking day. A redemption demand received and registered by the Fund Management Company after 1pm Finnish time will be executed at the fund unit value calculated for the following banking day. The redemption must take place immediately from the assets of the Fund. If the assets for the redemption have to be acquired by selling investments, the sale must take place without undue delay and no later than two weeks from when the redemption was demanded of the Fund Management Company. In this case, the redemption is executed at the fund unit value calculated for the day on which the assets from the sale of investments have been received. The subscription price of the Fund unit is the value of the fund unit on the subscription day calculated as stated in 10. The subscription fee, a maximum of 1%, is charged upon subscription. The redemption price for the Fund unit is the value of the fund unit on the redemption day, calculated as stated in 10. The redemption fee a maximum of 1% is charged upon redemption. Conflicts of interest A conflict of interest is an exceptional situation related to the provision of an investment service that may involve a significant risk to the client's interests. Such a situation may arise between Visio and the client, between Visio and its staff or between two different clients, for example. Visio's primary aim is to identify and actively prevent possible conflicts of interest with different organisational and administrative measures. These measures depend on what sort of business operations or services are involved. Visio utilizes, among others, the following methods to identify and prevent conflicts of interest: - appropriate separation of functions - trading regulations for staff and management - principles concerning the secondary occupations of staff and management - principles concerning the offering or receiving of business gifts of benefits (incentives) - conflict of interest identification, prevention and management principles - risk management principles - principles concerning diligent management of assets and execution of orders and best execution If a conflict of interest situation is unavoidable despite the aforementioned preventive measures, the client is informed of the nature of the conflict of interest and the reasons behind it prior to commencing business activities. It is then up to the client to independently decide whether he or she wishes to proceed with the business transaction regardless of the conflict of interest. Visio may also refuse to offer the investment service in a conflict of interest situation. Visio Asset Management Company and its employees are obliged to follow insider register legislation. Compliance Officer oversees that the rules and regulations are followed. To avoid any conflicts of interest regarding employees trading in securities for own and closely related persons account, Visio has adopted an instruction concerning Insider trading and register. The Company s employees are required to obtain pre-approval from Compliance Officer for trading for their own account. Client guidance and handling of client feedback With questions concerning the service and the service agreement, the client should always contact Visio's sales representative or compliance officer first. The client must notify Visio of any errors or malfunctions in the service and of any possible claims he or she may have as a result of such an error. 5

6 Visio has compiled instructions and defined procedures for handling of client feedback. The goal of these instructions and procedures is consistent and appropriate handling of the feedback received, according to valid regulation. The client has the right to have the feedback taken into handling effectively, fairly and without delay. Client feedback is primarily handled in conjunction with the client contacting Visio. In case this is not possible, the feedback is assigned to further processing. The client may receive information on the process of handling the feedback by contacting customer service. Client feedback and related actions taken are recorded in order to ensure reliable ex-post monitoring. The Board of Visio Asset Management receives regular reports of the client feedback which has been received. The client may contact the Finnish Financial Ombudsman Bureau (FINE) to obtain information regarding investment services and, if necessary, take disputes regarding the investment service to Fine's Securities Complaints Board. Finnish Financial Ombudsman Bureau, Porkkalankatu 1, Helsinki, Finland. info(a)fine.fi, tel.: , Availabiltiy This policy applies to the management and employees of Visio Asset Management Company and is available for unitholders. This policy is available for the unitholders on the website of Visio 6

7 Attachment MiFID, Visio Asset Management Ltd and client classification An investment service company is required to inform its client about the client's classification as either a non-professional client, professional client or eligible counterparty. The classification is directly based on legislation and the factors that affect the classification are defined in detail in the Act on Investment Services. The client's classification affects the extent of investor protection and the applicable code of conduct. A. NON-PROFESSIONAL CLIENTS Clients other than professional clients or eligible counterparties. B. PROFESSIONAL CLIENT 1. Institutional entities Finnish entities authorised or regulated to operate in the financial markets and comparable non-finnish entities regulated by authorities: a) Investment firms; b) Credit institutions; c) Fund management companies; d) Entities dealing in options; e) Stock exchanges; f) Clearing and settlement houses; g) Central securities depositaries; h) Insurance companies referred to in the Finnish Insurance Companies Act; i) Authorised employee pension companies and pension funds; j) Entities referred to in items 6 and 7 of subsection 3 of section 1 of the Investment Firms Act; k) Undertakings dealing on own account in commodities and commodity derivatives; and l) Other institutional investors. 2. Large undertakings Undertakings that meet two of the following three requirements according to financial statements for the past full fiscal year: a) Balance sheet total: at least 20,000,000; b) Net turnover: at least 40,000,000; and c) Own funds at least 2,000, State, municipalities and their units a) Finnish government; b) State treasury and state enterprises; c) Finnish municipalities and federations of municipalities; d) Province of Aland; e) Foreign states; f) Bodies servicing government debt; and g) Foreign state s regional administrative units. 4.Central Banks a) European Central Bank; b) Bank of Finland; c) Foreign Central Banks; and d) International Monetary Fund, World Bank and similar international entities or organisations. 7

8 5. Institutional investors Entities whose main business is to invest in financial instruments: 6. Clients applying themselves: 6.1 The client applies in writing. 6.2 The client meets at least two of the following requirements: a) the client has carried out transactions significant in size4 in the markets involved at an average frequency of ten times per quarter over the previous four quarters; b) the size of the client s investment portfolio exceeds 500,000; and c) the client works or has worked in the financial sector in a professional position for at least one year. 6.3 The Company estimates that the client is capable of both making independent investment decisions and understanding the risks involved in them, and the securities dealer accepts the client s application. 6.4 The Company informs the client in writing that the client does not enjoy the protection afforded by either the conduct of business rules referred to in Chapter 4 of the Securities Markets Act or the Investors Compensation Fund. 6.5 The client informs the Company in writing that he or she is aware of the loss of protection provided by the conduct of business rules and the Investors Compensation Fund. C. ELIGIBLE COUNTERPARTIES 1. Institutional entities Finnish entities authorised or regulated to operate in the financial markets and comparable non-finnish entities regulated by authorities: a) Investment firms; b) Credit institutions; c) Fund management companies; d) Entities dealing in options; e) Stock exchanges; f) Clearing and settlement houses; g) Central securities depositaries; h) Insurance companies referred to in the Finnish Insurance Companies Act; i) Authorised employee pension companies and pension funds; j) Entities referred to in items 6 and 7 of subsection 3 of section 1 of the Investment Firms Act; k) Undertakings dealing on own account in commodities and commodity derivatives; and l) Other institutional investors. 2. Large undertakings Undertakings that meet two of the following three requirements according to financial statements for the past full fiscal year: a) Balance sheet total: at least 20,000,000; b) Net turnover: at least 40,000,000; and c) Own funds at least 2,000, State, municipalities and their units a) Finnish government; b) State treasury and state enterprises; c) Finnish municipalities and federations of municipalities; d) Province of Aland; e) Foreign states; 8

9 f) Bodies servicing government debt; and g) Foreign state s regional administrative units. 4.Central Banks a) European Central Bank; b) Bank of Finland; c) Foreign Central Banks; and d) International Monetary Fund, World Bank and similar international entities or organisations. 5.Clients classified as eligible counterparties applying for treatment as professional clients. Procedure: 5.1 An eligible counterparty of the kind referred to above in point 1, 3 or 4 applies in writing for application of the code of conduct rules to transactions to be concluded with the eligible counterparty either in general or in respect of an individual transaction. 5.2 The Company accepts the client s application. 6. Clients classified as eligible counterparties applying for treatment as nonprofessional clients Procedure: 6.1 An eligible counterparty of the kind referred to above in point 1, 3 or 4 applies in writing for application of the code of conduct rules to transactions to be concluded with the client in general or in respect of an individual transaction. 6.2 The securities dealer accepts the client s application. 6.3 A written agreement is concluded to the effect that the client be treated as a non-professional client in respect of one or several services or transactions or in respect of one or several types of securities or transactions. 7. Clients classified on earlier application as institutional investors applying now for treatment as eligible counterparty Procedure: 7.1 The client applies in writing. 7.2 The client meets at least two of the following requirements: a) the client has carried out transactions significant in size9 in the markets involved at an average frequency of ten times per quarter over the previous four quarters; b) the size of the client s investment portfolio10 exceeds 500,000; and c) the client works or has worked in the financial sector in a professional position for at least one year. 9