INFORMATION CONCERNING THE SAFEGUARDING OF RETAIL CLIENTS FINANCIAL INSTRUMENTS OR FUNDS
Fenix Capital Markets Trading Ltd (the “Company”) takes several measures in order to ensure the maximum protection of the financial instruments and funds that the Company safeguards on behalf of its clients.
The Company does not hold Clients’ Funds; neither has it kept client’s financial instruments in its custody.
However, as per the regulatory requirements the Company ensures that selected counterparties and any third party brokers follow equivalent regulatory standards to those followed by the Company.
All clients are recommended to ensure that the third party broker they select through which the Company will act on behalf of the Client, follow the following Standards:
Depositing the funds of its clients into special bank accounts in authorized and reliable credit institutions under the name “clients’ account” and takes all necessary steps to protect the client’s proprietary rights.
The proceeds to the liquidation of a client’s financial instruments following an explicit order and/or consent of the client, unless provided otherwise in a relevant agreement.
Moreover, in order to safeguard the clients’ rights in regard to their financial instruments and assets, it takes the following measures:
(a) Keeps all the necessary records and accounts in order to be in the position, at any given time and with no delay, to distinguish the assets that are kept on behalf of the client from those that are kept on behalf of any other client as well as from the Company’s assets.
(b) Keeps its records and accounts in a way that ensures that they are true and accurate and that they correspond to the financial instruments that are kept on behalf of the clients.
(c) Takes all the necessary measures in order to ensure that financial instruments that have been deposited into third persons can be distinguished from those that belong to the Client.
(d) Takes all the necessary measures in order to ensure that the clients’ assets, deposited at authorized financial institutions, are kept into a separate account or accounts to any other accounts that may be used for assets that do not belong to the Client.
(e) Applies all necessary organizational measures in order to minimize the risk of loss or reduction of the client’s assets or rights in regard to these assets, because of asset misappropriation, fraud or negligence.
For the accurate and effective implementation of the above measures, the Company has determined the procedures stated below:
1. It deposits its clients’ funds into bank accounts of credit institutions under its Company name by stating explicitly to the financial institution that these are funds that belong to its clients.
2. It safeguards the financial instruments of its clients in the following ways:
(a) Financial instruments listed on an Exchange, which are traded as dematerialized securities, are registered under the client’s name or under the name of the broker as the Custodian of the Client.
(b) In case of other securities kept by a Custodian in materialized or dematerialized form and registered in an account held by this Custodian, the broker shall ensure that:
i. the Custodian is a Central Securities Registry or other authorized Central Securities Depository, System of Keeping Accounts of Dematerialized Securities, Credit Institution or Investment firm entitled to provide custody and safekeeping services, and
ii. the Custodian knows to that the financial instruments and funds registered in the aforementioned investment accounts are kept on behalf of the Company’s clients.
The Broker may keep these into omnibus accounts kept on behalf of more than one client by distinguishing in its books which financial instruments correspond to each client.
3. The tangible safeguarded financial instruments shall be kept:
(a) by the broker in the name of the client; or
(b) by a Financial Institution, Investment Firm or another undertaking entitled to act as a Custodian of financial instruments, in the name of the client or in the name of the broker on behalf of the client.
4. In the case of a Custodian operating in a third country outside the European Union and governed by the Laws of the third country, the broker shall deposit the client’s financial instruments with this Custodian only if the latter is subject to special regulations and supervision in the third country.
Please note that in this case, the client’s rights regarding his financial instruments, which are kept with a Custodian governed by the Laws of a third country, may be inferior to the rights resulting from a Custodian based and operating in a Member State of the European Union.
5. However, regardless of the above measures taken, the client still may not be protected in the following cases:
(a) the inefficient fulfilment and/or non-fulfilment of the Custodian’s obligations;
(b) the solvency and, generally, the fulfilment of the obligations of the Custodians (including Central Securities Registries and Central Securities Depositories of every kind and Clearing and Settlement Systems), in which the clients’ assets are kept. It is presumed that brokers are not be responsible for errors or omissions committed by Central Registries, Central Securities Depositories, Clearing and Settlement Systems, Investment Firms and Credit Institutions operating in a Member State or in another state implementing a supervision system in line with the international standards, unless the broker knew that the Custodian would become insolvent and permanently unable to meet its payment obligations. Moreover, the broker is not responsible for any wrong committed by the Custodian’s bodies or the bodies assisting in the fulfilment of the Custodian’s obligations.
6. In terms of the Company, it ensures that unless instructed otherwise by a client, the Company shall not dispose of, charge, manage or use in a different way the financial instruments kept on behalf of the client.
7. In addition to the above measures, the Company is a member of the Investor Compensation Fund for Clients of Cyprus Investment Firms (CIFs). The Fund’s objective is the payment of compensation (up to a specific amount) for claims that arise from the non fulfilment of the CIF’s obligation to protect the financial instruments and funds of the covered clients.