These Terms of Business together with the Client Agreement, any Addendum to the Client Agreement, collectively referred to as the Client Agreement (“Terms” or “Agreement”), shall govern the contractual relationship between Rizzo Farrugia and the Client (“Client”) in respect of the investment and/or ancillary services provided by Rizzo Farrugia.
Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is a founding member of the Malta Stock Exchange (“MSE”) and is licensed to undertake Investment Services under the Investment Services Act, Cap 370 of the Laws of Malta by the Malta Financial Services Authority (“MFSA”) of Triq l-Imdina, Zone 1 Central Business District, Birkirkara, CBD 1010, Malta. The MFSA’s Investment Services register may be verified on the webpage https://www.mfsa.mt/financial-services-register/
In this Agreement, terms shall, unless the context otherwise requires, have the meaning as defined in the Glossary, and is used in singular or plural as appropriate. The following general terms of business set out our relationship with the Client and shall become binding upon the Client signing the Client Agreement.
- General terms
1.1. The MFSA Conduct of Business Rules (the “Rules”) require that non-professional investors (referred to as “Retail Clients”) be given a higher degree of care and protection when being offered and/or advised on investment services. Rizzo Farrugia is obliged to classify investors as Retail Clients or Professional clients or Eligible Counterparties before acceptance. In the case of Eligible counterparties, Rizzo Farrugia shall be entitled to enter into agreements with such Clients which limit the conduct obligations of Rizzo Farrugia under the MFSA Conduct of Business Rules, which obligations may differ from those applicable to Retail and/or Professional Clients. In providing Services to Professional Clients, Rizzo Farrugia shall have the right to agree to a limited application of the detailed requirements set out in the MFSA Conduct of Business Rules.
1.2. Should Retail Clients elect to be treated as Professional Clients in view of their experience, knowledge and expertise in investment matters, they should be aware that they will lose the corresponding level of protection afforded to Retail Clients under the MFSA Conduct of Business Rules. This may also include the loss of investor compensation scheme rights. The Client’s classification is not permanent, and Professional Clients shall keep Rizzo Farrugia immediately informed of any change in its status or situation which could affect the Client Classification. The Client acknowledges that the Financial Instruments that Rizzo Farrugia offers to Clients may depend on the client classification, and that not all Financial Instruments may therefore be available to all types of Clients.
Rizzo Farrugia provides the following investment services:
Non-advisory investment services / Execution-only services/Reception and transmission of Orders
1.3. Where Rizzo Farrugia’s services under this Agreement are of a non-advisory/execution-only, Rizzo Farrugia will act exclusively on the basis of instructions received from the Client. Execution Only services refer to acting to conclude agreements, to buy, sell one or more Financial Instruments on the Clients’ behalf and where no personal recommendation is given by Rizzo Farrugia as part of the investment service in relation to non-complex Financial Instruments. Non-Advisory Investment Service refers to execution only services in relation to Complex Financial Instruments and/or to Non-Complex Financial Instruments that are NOT deemed to be provided at the initiative of the Client.
1.4. For Non-Advisory investment services, Rizzo Farrugia is required to undertake an appropriateness test in order to determine if the investment is appropriate to the Client. In case of the non-advisory/execution-only services, Rizzo Farrugia shall not provide any investment advice or any personal recommendation to the Client. Rizzo Farrugia is not required to assess the suitability of the investment or service provided and therefore the Client does not benefit from the corresponding protection of the Rules.
1.5. Reception and Transmission of Orders refers to the reception from the Client of an order to buy, sell, or subscribe for instruments and the transmission of that order to another authorised and/or regulated entity including investment firms and/or credit institution for execution in relation to such Instruments.
1.6. When the Client places an execution-only order at his/her initiative in a non-complex instrument, the Client is hereby warned that unless otherwise specified, in the provision of this service, Rizzo Farrugia is not required to assess the appropriateness of the security or service provided and therefore, the Client will not benefit from the corresponding protection afforded under the MFSA Conduct of Business Rules.
When the Retail Client places a non-advisory order in a complex Financial Instruments or in a non-complex Financial Instruments which is not at his/her initiative, Rizzo Farrugia shall assess the appropriateness of the security or service to the Client. However, the service shall remain non-advisory in nature and Rizzo Farrugia reiterates, undertakes and declares that in any such orders or services, Rizzo Farrugia will not have provided personal recommendations to the Client vis-à-vis that Financial Instrument under consideration. For non-advisory clients, Rizzo Farrugia may at its discretion decline to execute an order if it considers, on the basis of the Knowledge & Experience of the Client that the product or service is not appropriate for the Client. Furthermore, where the Client elects not to provide the required information or where the Client provides insufficient information regarding his Knowledge and Experience, the Client is warned that Rizzo Farrugia will not be in a position to determine whether the service or product envisaged is appropriate for the Client and that accordingly, the Client does not benefit from the level of protection afforded under the MFSA Conduct of Business Rules. In the event of an insistent Client wishing to execute non-advisory orders not deemed by Rizzo Farrugia to be appropriate, then the Client shall be warned of the risks that s/he will assume in undertaking such a transaction. Rizzo Farrugia may nonetheless decline such execution and the Client acknowledges, agrees, and accepts that in the event that Rizzo Farrugia does not execute such an order, Rizzo Farrugia shall not be liable for any loss emanating from the non-execution of such orders.
1.7. In the case of non-advisory investment services to Clients having joint accounts, minors, or attorneys, unless otherwise specifically indicated in writing by the Client, Rizzo Farrugia shall assess the knowledge and experience of the primary decision maker in respect of the Client’s portfolio as elected by the Client and shall take an overall view of his/her knowledge and experience when performing an assessment of appropriateness.
1.8. In the case of Professional Clients, Rizzo Farrugia shall assume that the client possesses the necessary knowledge and experience in respect of all securities.
Investment advisory services (both ad-hoc advice or ongoing advice)
1.9. Where Rizzo Farrugia’s services under this Agreement are of an advisory nature, Rizzo Farrugia will provide the Client with investment advice on a Financial Instrument basis or on the overall investment portfolio, for the purposes of seeking to achieve the Client’s investment objectives, risk profile and sustainability preferences, if any. Decisions are however taken by the Client every time an acquisition or disposal of a Financial Instrument is carried out. Rizzo Farrugia is obliged to undertake a suitability assessment so as to recommend suitable products that match the Client’s knowledge and experience, financial situation (including the Client’s ability to bear losses), and the investment objective (including risk tolerance) as well as the Client’s sustainability preferences on the basis of information provided by the Client.
1.10. Any investment advice provided shall be based on our knowledge and experience in the field, and on our research capabilities, particularly in securities listed on the Regulated Market of the Malta Stock Exchange and selected securities listed on the larger international stock exchanges in Europe, the UK and the US, but shall be, in terms of MIFID II and the MFSA Conduct of Business Rules, of a non-independent nature or “restricted” on the basis that Rizzo Farrugia may not have analysed a sufficiently wide range of such similar securities to that in the recommended transaction/s or course of action and Rizzo Farrugia makes no representation, warranty or guarantee as to, and shall not be responsible for, the profitability, accuracy or completeness of such advice, information or recommendations, unless Rizzo Farrugia has acted grossly negligently and is liable pursuant to these Terms. Rizzo Farrugia does not provide any advice to the Client on any tax related matters and Clients are urged to obtain independent tax advice with respect to tax implications of the respective Services and/or Instruments held.
1.11. In terms of the Rules, any investment advice given by Rizzo Farrugia to the Client, whether it is a buy, sell, hold, or switch recommendation, and irrespective of whether the recommendation leads to a trade or whether the Client accepts to proceed with the recommendation, must be accompanied by a Suitability Report that Rizzo Farrugia shall provide to the Client. This report must be provided to the Client prior to the execution of the trade and the Client is advised to review all the contents of the report, and to advise Rizzo Farrugia immediately of any inaccuracy or omission, prior to providing the respective trade order to Rizzo Farrugia. Where the provision of the report is not immediately possible due to the medium of communication, the Client may choose to either instruct Rizzo Farrugia to delay the execution of the trade until such time Rizzo Farrugia provides the report to the Client, or alternatively instruct Rizzo Farrugia to execute the trade and provide the Suitability Report as soon as possible thereafter. Rizzo Farrugia shall also provide the Client with the option of receiving the information on costs and charges over the phone prior to the conclusion of a transaction. In this respect, it is hereby agreed that unless specifically instructed otherwise by the Client, the Client specifically consents for such a Suitability Report to be provided by Rizzo Farrugia to the Client as soon as possible after the execution of the trade.
1.12. For investment advisory services other than for ad hoc investment advice, Rizzo Farrugia shall also indicate whether the advice provided requires a periodic assessment of the suitability. For investment advice, such periodic review shall be undertaken at least annually. With the exception of ad hoc investment advice, periodic reviews are undertaken at each time an investment advice is provided following the initial investment recommendation. Any subsequent Suitability Reports issued after the initial investment advisory service shall only cover changes in the Investment Services and/or Financial Instruments involved and shall not repeat all the details of the first suitability report. Such periodic review shall also be subject to the terms and fees as may be applied by Rizzo Farrugia from time to time. The information provided by the Client will only be reassessed in the event that the Client advises that there are changes to his personal circumstances and it is the Client’s responsibility to advise Rizzo Farrugia of such changes to his personal circumstances and instigate such suitability assessment and review. The information previously collected by Rizzo Farrugia may be periodically subject to reassessment by seeking an updated Client Agreement. The Client is hereby warned that where the advice will not be subject to a periodic assessment and review for any reason, including cases where a periodic assessment and review is considered advisable by Rizzo Farrugia but the periodic assessment and review is subsequently not pursued by the Client for any reason, the Client shall be assuming full responsibility for the ongoing monitoring of the suitability of that investment for the Client.
1.13. In order for Rizzo Farrugia to assess the suitability of investments when giving advice to the Client, Rizzo Farrugia is obliged to undertake an Assessment of Suitability. Rizzo Farrugia will not provide advice to Clients who refuse to disclose to Rizzo Farrugia all the necessary information required therein in view that Rizzo Farrugia would be unable to assess the suitability of an investment for that Client.
Discretionary Portfolio Management and Private Investment Service (“PINS”)
1.14. Where Rizzo Farrugia’s services under this Agreement are of a discretionary portfolio management, Rizzo Farrugia will manage the Client’s portfolios in accordance with mandates given by the Client on a discretionary client by-client basis where such portfolios include one or more Financial Instruments. The Client authorises Rizzo Farrugia to act on his/her behalf without the need to obtain prior approval or otherwise consult with the Client. Private Investment Service (PINS) is a discretionary portfolio management service where Rizzo Farrugia will manage the Client’s investment portfolio in accordance with one of three strategies – Growth, Balanced or Income – as chosen by the Client. When selecting the PINS, Rizzo Farrugia will provide such Clients with safekeeping and administration services and the Client’s assets portfolio will be registered in the name of and held by Rizzo Farrugia.
1.15. As part of a discretionary portfolio management mandate, Rizzo Farrugia will be authorised by the Client to take all such actions in relation to the Client’s portfolio to seek to achieve the Investment Objectives stated by the Client and will act in accordance with any other instructions agreed to with the Client. In both cases, Rizzo Farrugia is empowered to act on behalf of the Client without the need to obtain prior approval of the Client or otherwise consult with the Client who therefore delegates full discretionary authority to Rizzo Farrugia, who will manage the Client’s portfolio on a day-to-day basis. The service will entail the purchase (including primary issue applications), and/or sale, and/or exchange of any Financial Instrument. Rizzo Farrugia will, in the interest of the Client:
1.15.1. Take all decisions to invest in Financial Instruments;
1.15.2. Place orders for the execution of transactions with or through such brokers, dealers, financial institutions, banks and issuers as Rizzo Farrugia may select; and
1.15.3. Take all other action deemed necessary.
Rizzo Farrugia shall maintain full and detailed records of all such assets managed and all transactions effected on behalf of the Client.
1.16. When providing discretionary portfolio management services, Rizzo Farrugia is required to assess the suitability of investments for the Client when undertaking any investment decision on his/her behalf to establish whether the investments meets the Client’s Knowledge and Experience, financial capacity including his/her ability to bear losses, investment objective including his/her risk profile, as well as any sustainability preferences. The suitability of the Financial Instruments with respect to the Client’s financial situation and investment objectives, is assessed by Rizzo Farrugia at the level of the Client’s portfolio as a whole against the investment strategy as selected by the Client in the Client Agreement.
1.17. Under investment services provided of a ‘discretionary’ nature, Rizzo Farrugia will manage a Client’s investment portfolio in line with the Investment Strategy chosen by the Client. The Client authorises Rizzo Farrugia to act on his/her behalf without the need to obtain prior approval or otherwise consult with the Client. Rizzo Farrugia is obliged to provide the Client with details of any delegation of the discretionary management of all or part of the Financial Instruments or funds in the Client portfolio. The details of any benchmark against which the performance of the Client portfolio will be compared are listed in the Client Agreement and depend on the Investment Strategy chosen by the Client.
Client information for the purposes of Suitability Assessment and Appropriateness Test
1.18. The Client binds himself to provide up-to-date, accurate and sufficient information such that Rizzo Farrugia is able to undertake a suitability assessment. Without this information, Rizzo Farrugia is unable to provide investment advice and portfolio management services. The Client acknowledges, agrees, and accepts that the answers provided by the Client will have a direct impact in determining the suitability of investments recommended or undertaken by Rizzo Farrugia. Rizzo Farrugia will undertake a suitability assessment on the basis of the information provided by the Client as well as on the basis of the investment portfolio held and/or transacted with Rizzo Farrugia, where available. Rizzo Farrugia may from time to time request the Client to update his/her personal circumstances and information provided. However, it is the Client’s responsibility to update Rizzo Farrugia with any change to the Client’s knowledge and experience, financial situation (including its’ ability to bear losses), and investment objectives (including risk tolerance) as well as the Client’s sustainability preferences as soon as the Client has a change in his personal circumstance. Rizzo Farrugia will not be liable for any loss (including loss of profit) that the Client incurs as a result of an investment recommendation made by Rizzo Farrugia to the Client based on incomplete or inaccurate information.
Client information for legal entities or groups of persons for the purposes of Suitability Assessment and Appropriateness Test
1.19. In the case of joint accounts, minors, or attorneys, unless otherwise specifically indicated in writing by the Client, Rizzo Farrugia shall assess the knowledge and experience of the primary decision maker in respect of the portfolio as indicated by the Client and shall take an overall view of his/her knowledge and experience when performing an assessment of suitability as well as information available to Rizzo Farrugia in relation to historical transactions and holdings. In the event that the Client has appointed a Power of Attorney (“POA”), then the Knowledge and Experience of the POA holder will be assessed. In the event that a Client appoints a Signatory other than the Account holder, the Knowledge and Experience of the Primary Decision Maker will be assessed notwithstanding that such Signatory is vested with the power to execute a transaction on non-advisory and/or advisory basis on the Client’s behalf.
1.20. In the case of Professional Clients, Rizzo Farrugia shall assume that the client possesses the necessary knowledge and experience in respect of all securities. Furthermore, clauses 1.11 and 1.12 shall not apply in the case of Professional Clients. In the case of Professional Clients per se, Rizzo Farrugia shall be entitled to assume that the Client possesses the financial capacity to bear any risks in relation to the investment recommended.
1.21. For the purposes of assessing the Knowledge and Experience under Appropriateness Testing and/or Suitability Assessment for Clients who are legal or non-legal personae (“the Entity”), the Knowledge and Experience of the Primary Decision maker will be assessed. It is the responsibility of the persons vested with the management of such Entity such as the Directors, Trustee, Administrative Body and/or persons vested with management and/or control of such Entity to ensure that the Signatory/ies are duly authorised to carry out the transactions on behalf of such Entity. Signature by the management of such Entity (by way of e.g., by the authorised Directors, Trustee, Administrative Body and/or persons vested with control in accordance with the powers emanating from the statute and/or articles of association) shall be deemed as duly authorised for the purposes of administering the account and remitting or executing orders to Rizzo Farrugia. With respect to the Financial Situation, including the Client’s capacity to bear losses, the Investment Objective and Risk Profile, as well as Sustainability Preferences, the information to be collected shall pertain to such Entity.
1.22. For the purposes of assessing the Knowledge and Experience under Appropriateness Testing and/or Suitability Assessment for Clients who are two or more natural persons, such natural persons will be invited to choose the Primary decision taker. This implies that only the Knowledge & Experience of the Primary Decision Taker will be considered. Rizzo Farrugia will not collect information in relation to the Knowledge and Experience for each individual natural client, even in the event that the Clients agree to have any one to sign or All to sign for the remittance and execution of orders to Rizzo Farrugia. Therefore, the protection of the respective interest of each account holder will ultimately depend on the Primary Decision Maker’s Knowledge & Experience. With respect to the Financial Situation, the Investment Objective and Risk Profile, as well as Sustainability Preferences, the information to be collected shall pertain to each individual client. For spouses opening a joint account, the financial situation shall be assessed jointly, unless otherwise specified by such Client/s. In the event that the Financial Situation, including the capacity to bear losses, the Investment Objective and Risk Profile of each individual client differs, then Rizzo Farrugia will adopt the most prudent approach by taking into account, accordingly, the weakest financial situation or the most conservative investment objectives.
1.23. For the purposes of assessing the Knowledge and Experience under Appropriateness Testing and/or Suitability Assessment for Clients who are one or more natural persons who have appointed another natural person as their representative, (the “Representative”), such as in the case of a Power of Attorney, the Knowledge & Experience of the Representative will be considered. With respect to the Financial Situation, the Client’s capacity to bear losses, the Investment Objective and Risk Profile, as well as Sustainability Preferences, the information to be collected shall pertain to the account holder. In the event that the account holder is interdicted or incapacitated by way of Court Order due to vulnerability, the Representative will be required to indicate the Investment Objective and Risk Appetite and any Sustainability Preferences.
1.24. It is understood that in respect of Discretionary Portfolio Management Service and PINS, Rizzo Farrugia’s services are of a ‘discretionary’ nature, and Rizzo Farrugia will manage a Client’s investment portfolio in line with the Investment Strategy chosen by the Client in the Client Agreement. The Client authorises Rizzo Farrugia to act on his/her behalf without the need to obtain prior approval or otherwise consult with the Client.
1.25. In the case of Advisory Investment Services and Discretionary Portfolio Management Services, Rizzo Farrugia is obliged to obtain your Sustainability preferences in relation to (i) a Financial Instrument for which the Client determines that a minimum proportion shall be invested in Environmentally Sustainable Investments and/or (ii) a Financial Instrument for which the Client determines that a minimum proportion shall be invested in Sustainable Investments and (iii) a Financial Instrument that considers negative externalities, including Principal Adverse Impacts. The Client is further advised that Rizzo Farrugia is obliged as a first step to assess the suitability of an investment recommendation as to whether it meets the Client’s knowledge and experience, financial situation including the Client’s ability to bear losses, the investment objectives and risk profile, and a second step to assess whether an investment recommendation meets the Client’s sustainability preferences. The Client is accordingly advised that if sustainability preferences are indicated but no further preference towards a minimum proportion or any specific focus is indicated by the Client, Rizzo Farrugia will still consider sustainability investments without being bound by any specific focus and minimum proportion of sustainability-related expectation for the purpose of conducting the suitability assessment. The Client further acknowledges that if s/he fails to indicate her/his sustainability preferences, if any, Rizzo Farrugia will consider the Client to be “sustainability-neutral” and recommend products both with and without sustainability-related features.
General terms applicable to all client orders
1.26. The Client hereby instructs Rizzo Farrugia, who accepts, to acquire any of the Financial Instruments detailed in Client Agreement and in accordance with the descriptions stipulated therein, as may be amended from time to time. Unless otherwise instructed by the Client, Rizzo Farrugia will not provide Safekeeping and Administration Services on behalf of the Client. Rizzo Farrugia will handle orders and instructions in accordance with its Order Execution Policy. Rizzo Farrugia may refuse to act upon any instruction from a Client or delay any instructions if Rizzo Farrugia believes that the transaction, pursuant to the instruction submitted, will be in violation of usual market practices and/or applicable law, including, but not limited to, the Prevention of Money Laundering and Funding of Terrorism Regulations and the EU Market Abuse Regulation, including any Implementing Procedures, delegated acts and technical standards issued thereunder.
1.27. For purchase orders, the Client accepts and agrees to provide Rizzo Farrugia with sufficient funds to cover all costs for the purchase (including the respective stock exchange fees and brokerage charges) in advance of the execution of such purchase order. In the event that the Client does not advance the appropriate funds for settlement to Rizzo Farrugia or is not in a position to advance the appropriate funds for settlement, the Client grants consent to Rizzo Farrugia, for title of the purchased securities which are the subject of the default to be credited to Rizzo Farrugia’s account.
1.28. Rizzo Farrugia and the Client agree that the Client may, in writing, by telephone, or e-mail, request Rizzo Farrugia to acquire/sell Financial Instruments included in the Agreement. All such means of submitting instructions to Rizzo Farrugia shall be equally binding. Rizzo Farrugia may verify order instructions at its own discretion, and this may likely result in a delay in execution or extended processing time. The Client’s instructions and orders are binding on the Client when received by Rizzo Farrugia. If the Client wishes to withdraw an instruction or order that has not yet been executed, the Client may contact Rizzo Farrugia and request that the order be cancelled, but Rizzo Farrugia is under no obligation to accept the cancellation of such instruction or order. An instruction or order is not cancelled until the Client has received a written or verbal confirmation of the cancellation from Rizzo Farrugia.
1.29. Rizzo Farrugia shall use all reasonable endeavours to execute the Client’s instructions as soon as practicable but shall be under no responsibility for any loss or expense incurred or otherwise sustained by the Client beyond Rizzo Farrugia’s control or as a result of any change in market conditions between the date of receipt of instructions and execution by Rizzo Farrugia.
1.30. Rizzo Farrugia shall execute Client’s instructions or any further instructions as aforesaid itself and/or through such other licensed third party as Rizzo Farrugia may deem appropriate. In providing this service, Rizzo Farrugia will follow its Order Execution Policy, details of which are found in rizzofarrugia.com
1.31. EU rules require trading on the local and EU stock exchanges to take place at specific tick sizes (i.e., prices) determined by reference to liquidity bands and the market price band within which the equity is trading. In this respect, while the Client may continue to provide specific price limits for his/her trading instructions, the Client should be aware that the price limit provided may not be a permitted tick size. In such cases, Rizzo Farrugia shall place such order at the next more advantageous tick size available.
1.32. EU rules also require trading venues such as the Malta Stock Exchange, and all investment firms such as Rizzo Farrugia, to report to the MFSA the details of all the trades executed on behalf of clients. In this respect, both when trading in the Client’s direct name or when held by Rizzo Farrugia through its provision of Safekeeping and Administration services, Rizzo Farrugia is required to share your personal details and trade order details with the MFSA. In addition, when trading in the Client’s direct name, Rizzo Farrugia may need to share some of your personal data (such as date of birth) with the Malta Stock Exchange. Save for natural persons, entities require to have a Legal Entity Identifier (“LEI”) in order to trade and failure to have a LEI at the time of order, may delay the execution of Order in view of reporting requirements. It is the obligation of such entity to ensure to have an active LEI and renewed upon expiry. Rizzo Farrugia may, upon the entity’s request, apply for a LEI on the entity’s behalf subject to reimbursement of fees and the applicable administration fee being paid by the Client to Rizzo Farrugia.
1.33. In providing its services under this Agreement, where the Client’s instructions cannot be executed on the regulated market where the security is listed, Rizzo Farrugia may satisfy the Client’s instructions by utilising securities held on its own account.
1.34. Where Rizzo Farrugia has carried out an order received from a Client, it shall notify the said Client, by means of a durable medium, confirming execution of the order as soon as possible, and no later than the first business day following execution, or where the confirmation is received by Rizzo Farrugia from a third party, no later than the first business day following receipt of the confirmation from the third party.
Other general terms
1.35. In the event that the Client is represented by more than one person, any instructions, directions, declarations, requests, information, notices and any other communication and any undertaking by the Client under this Agreement shall be deemed to have been given by the Client, both if given by the Client or otherwise as stipulated by the Client in the Agreement, and the said persons shall be jointly and severally liable to fulfil all the obligations of the Client under this Agreement. On the other hand, Rizzo Farrugia shall fulfil its obligation to give any instructions, directions, declarations, requests, information, notices and any other communication to the Client if it gives any such instructions, directions, declarations, requests, information, notices and any other communication to any one of the persons representing the Client at the address, telephone, or email as the Client shall indicate to Rizzo Farrugia from time to time for this purpose. It is the responsibility of the Client and/or the appointed signatories to keep Rizzo Farrugia informed of any changes to the information provided in the Agreement.
1.36. In providing Investment Services to Professional Clients, Rizzo Farrugia is not required to provide Information about the services provided by it that is otherwise provided to Retail Clients in accordance with the MFSA Conduct of Business Rulebook. Save for the provision by Rizzo Farrugia of investment advice and/or portfolio management other than in relation to switching of Financial Instruments, Rizzo Farrugia is not required to provide ex-ante costs and charges prior to the provision of investment services and/or products to Professional Clients nor to provide post aggregated costs and charges to such Professional Clients.
1.37. In providing its services under this Agreement, Rizzo Farrugia may provide the Client with foreign exchange services in the event that the Client requests Rizzo Farrugia to convert any currency held on account with Rizzo Farrugia into another currency. Rizzo Farrugia will endeavour to obtain a rate of exchange which will be an improvement over the standard retail rate for the benefit of the Client. Rizzo Farrugia shall retain 25% of the improvement obtained in compensation for this service which shall also cover the administrative procedures and expenses necessary in obtaining such an improvement.
1.38. The Client confirms that the s/he is not acting as an agent on behalf of other natural person/s and/or beneficial owner/s. The Client declares and confirms that the investment service and/or occasional transaction is being held for their ultimate benefit as detailed on the Client Agreement and that no other person/s shall have any form of claim, ownership or control on the investment service and/or portfolio. The Client agrees to inform Rizzo Farrugia should the Client be acting as an agent on behalf of any other ultimate beneficiary. Rizzo Farrugia may refuse to onboard a Client/s or terminate the relationship in the event that Rizzo Farrugia becomes aware and/or has reason to believe that the Client is acting as agent.
1.39. In carrying out a business relationship and/or occasional transaction, Rizzo Farrugia is obliged under the Prevention of Money Laundering Act, the Prevention of Money Laundering and Funding of Terrorism Regulations (“the Regulation”) as well as the FIAU Implementing Procedures, to, inter alia, identify and verify the Client including the ultimate beneficial owners, establish whether the Client is a PEP, family member and/or close associate, establish the intent and purposes of the business relationship and obtain the source of wealth and/or source of funds of the Client. In order to adhere to the applicable laws, Rizzo Farrugia shall request the Client to provide relevant identification documentation and information, including amongst others, for the purposes of substantiating the source of wealth and/or source of funds. Accordingly, the Client hereby confirms that he/she shall endeavour to provide Rizzo Farrugia with the requested information to his/her best endeavours and any such information will be accurate and complete. The Client is accordingly advised that any false declarations, false representations, or the production of false documentation by the Client or any person purporting to act on the Client’s behalf constitutes an offence at law and accordingly, the Client warrants that the information and representation made by the Client are truthful and accordingly the Client attests to such veracity of any documents so provided.
2.1. Rizzo Farrugia will accept communication in writing by mail or by email. Any communications in writing to Rizzo Farrugia shall be signed by the Client or the Client’s authorised signatory, whose specimen signature appears in the Client Agreement, and shall be addressed to:
By mail: The Directors,
Rizzo, Farrugia & Co. (Stockbrokers) Ltd,
Airways House, Fourth Floor, High Street, Sliema SLM 1551, MALTA
By email: email@example.com
and shall take effect on actual receipt by Rizzo Farrugia.
2.2. Rizzo Farrugia shall be entitled to rely on any communication or document (including mail or email message), believed by it to be genuine and correct, as having been communicated and signed by the Client. Rizzo Farrugia shall however be entitled, at its discretion but especially where, for any reason, the written communication is not believed to be genuine or correct, to require the Client to confirm the instructions verbally, and to delay acting on any written communication until such verbal confirmation is received.
2.3. Rizzo Farrugia may also accept instructions telephonically as long as Rizzo Farrugia is satisfied as to the validity, the authenticity, and the legality of the instructions. Rizzo Farrugia shall be entitled, at its discretion, to require the Client to give or confirm any such verbal direction or instruction in writing and may refrain from acting until such written direction or instruction is received.
2.4. The Client hereby gives consent to be contacted, amongst others, by telephone by Rizzo Farrugia and accepts and accordingly agrees that all telephone calls, both incoming, outgoing, and internal, shall be recorded by Rizzo Farrugia.
2.5. The Client hereby specifically agrees that where the Client has provided an email address to Rizzo Farrugia, Rizzo Farrugia may deliver any notice / report / document to the Client via email at that email address. An email is considered received by the Client when sent by Rizzo Farrugia. Rizzo Farrugia is not responsible for any delay, alteration, redirection, or any other modification an email or other message may undergo after transmission from Rizzo Farrugia. Where Rizzo Farrugia holds a Client’s email address, the trade confirmations may be sent by email to that email address. Otherwise, all trade confirmations will be sent to the Client’s last known address.
2.6. The Client is obliged to verify the contents of any communication, notice, statement, or document, from Rizzo Farrugia whether sent electronically or in print. Such content shall in the absence of manifest error be deemed conclusive evidence, unless the Client notifies Rizzo Farrugia in writing to the contrary immediately after having received such communication, notice, statement, or document.
2.7. All information required to be provided to the Client may be provided in electronic format, except where the Client made a request to Rizzo Farrugia to receive the relevant information in paper copy, in which case Rizzo Farrugia shall provide such information in paper copy and free of charge. The Client retains the option to receive such information in paper copy. In respect of any existing Clients receiving information in paper copy, Rizzo Farrugia will serve eight weeks’ notice prior to sending such information in electronic format. Unless the Client requests Information to be provided in paper copy, Rizzo Farrugia may accordingly dispatch any communication in either electronic format or paper copy. The Client may still elect to receive information in paper copy or switch to electronic format.
2.8. Instructions may be given in Maltese or in English. Rizzo Farrugia may communicate with the Client and provide documents and other information to the Client in English.
3.1. The Client shall be deemed to have acknowledged and approved the execution of any orders, unless a complaint is received immediately upon receipt of the relevant trade confirmation/s.
3.2. Complaints may be made in writing and sent to the registered office of Rizzo Farrugia for the attention of the Complaints Officer or by email on firstname.lastname@example.org or by calling on (+356) 2258 3000 and Rizzo Farrugia will investigate complaints forthwith. When filing a complaint, the Client is to provide Rizzo Farrugia with the relevant information to ensure that Rizzo Farrugia is able to investigate the complaint, including the Client’s identification details and contact information as well as details of the Client’s complaint, as well as the nature of the complaint. Rizzo Farrugia has a Complaints Handling Policy in place to ensure that complaints are dealt with in in a fairly and timely manner. Rizzo Farrugia shall investigate any complaint promptly, fairly, objectively. Rizzo Farrugia has a Conflict-of-Interest Policy in place that aims to identify and manage any conflicts of interest, including when handling and investigating a complaint. As required by rules issued by the MFSA, any complaint received will be acknowledged in writing by not later than two (2) business days from date of receipt and registering the complaint and if within fifteen (15) business days after receipt of the complaint the investigation has not been completed, Rizzo Farrugia will inform the Client in writing, including the date when the Client is likely to expect a reply and will continue to seek to resolve the complaint. Should the complaint not be resolved to the Client’s satisfaction, the Client is entitled to refer the complaint to the Office of the Arbiter for Financial Services, First Floor, St Calcedonius Square, Floriana FRN1530, Malta or lodge a complaint as further detailed on their website at financialarbiter.org.mt or by calling on 80072366 or 21249245.
- Limitation of Liability and Indemnity
4.1. Rizzo Farrugia shall not be liable for any depreciation in value of the Client’s portfolio or losses suffered by the Client. Rizzo Farrugia declares, and the Client accepts, that it is not acting as trustee in respect of the Financial Instruments and is therefore not liable as such.
4.2. Although Rizzo Farrugia will always take reasonable care when giving investment advice, it cannot guarantee that the Client’s investments will not depreciate in value. Any information or advice so given to the Client, whether verbally or otherwise, are only statements of opinion and no express or implied representation or warranty is given or implied therefrom.
4.3. Rizzo Farrugia shall not be liable for any loss incurred by the Client with respect to any transaction in relation to any Financial instrument, any delays in the receipt or processing of the Client’s instructions or if Rizzo Farrugia cannot perform any of its obligations by reason beyond Rizzo Farrugia’s reasonable control (including, without limitation to the generality of the aforesaid, acts of God, government restriction, wars, act of terrorism, strikes, fire, exchange or market disruption, suspension of trading, periods of abnormal or unusual market activity, unanticipated dealing volumes, inability to communicate with regulated markets or counterparties, failure of any telecommunication, computer dealing or settlement system, energy failure, late or mistaken delivery of payment by any bank or counterparty, or any other event beyond the reasonable control of Rizzo Farrugia except if occurring through Rizzo Farrugia’s negligence, fraud, wilful default or the breach of these Terms.
4.4. Rizzo Farrugia will not be liable to the Client or to any third party for any loss which may be sustained in relation to the services provided by Rizzo Farrugia in accordance with this Agreement. The Client agrees to indemnify Rizzo Farrugia, its Directors and employees against all losses, claims, proceedings, actions, demands, costs, expenses, or other liability whatsoever incurred by them, pursuant to, or in connection with, this Agreement.
4.5. In general, instructions by Clients should be provided in writing and confirmed in the manner and using the means agreed with Rizzo Farrugia or as it may otherwise require. Should the Client request, and Rizzo Farrugia agree, that instructions be provided or confirmed to Rizzo Farrugia by means of telephone, email, or any other electronic means (“Electronic Communications”):
4.5.1. the Client accepts that the use of Electronic Communications, and their storage, is subject to a number of risks including the risk of unauthorised access, data theft, leakages of data, errors or breakdown in transmission, viruses and malware, and increased risk of fraud, many of which risks are outside Rizzo Farrugia’s control.
4.5.2. the Client accepts full responsibility for the risks of using Electronic Communications and that Rizzo Farrugia will not be liable to the Client or to any third party for any loss which may be sustained as a direct or indirect result of the Client’s use of Electronic Communications.
4.5.3. the Client agrees to indemnify Rizzo Farrugia for any loss, claim, proceeding, action, demand, cost, expense, or other liability incurred by Rizzo Farrugia as a result of the use or storage of Electronic Communications; and
4.5.4. proper receipt by Rizzo Farrugia of instructions from the Client using Electronic Communications shall, if accepted by Rizzo Farrugia, be conclusive evidence of instructions provided by the Client. The Client agrees to indemnify Rizzo Farrugia for any loss, claim, proceeding, action, demand, cost, expense, or other liability incurred by Rizzo Farrugia as a consequence of Rizzo Farrugia acting, or not acting, on instructions submitted or purported to be submitted by the Client by means of Electronic Communications.
4.6. Rizzo Farrugia has in place an ICT Strategy and Risk Management Framework aimed at managing and monitoring risks including those emanating from external threats and vulnerabilities, however, no warranties are provided by Rizzo Farrugia that such risks will not materialize. Rizzo Farrugia recommends that the Client does not send any information deemed to be of a sensitive nature via Electronic Communications.
4.7. For the avoidance of doubt, nothing in this clause shall be taken as excluding any liability which Rizzo Farrugia cannot lawfully exclude under Maltese law.
4.8. Rizzo Farrugia may, from time to time prepare and disseminate research material by mail or e-mail to its clients or via a dedicated portal on its website. While every care is taken by Rizzo Farrugia in the preparation of such research material which is collected from generally publicly available information which Rizzo Farrugia believes to be reliable, the accuracy thereof cannot be guaranteed. All comments, statements and other information contained in such material is only Rizzo Farrugia’s opinion and are not in any way, whether express or implied, representations or warranties made by Rizzo Farrugia and shall not be construed or considered by the Client as personal investment advice. Any action taken by a Client following receipt of research material from Rizzo Farrugia shall be considered by Rizzo Farrugia as a request for a service at the initiative of the Client without the provision of personal advice. Rizzo Farrugia shall not be liable for any direct or consequential loss arising from the use of such material. Any material circulated or made available to the Client is intended for the use and information of the Client and may not be reproduced, distributed, or published by the Client for any purpose.
4.9. Except in cases of fraud or gross negligence, Rizzo Farrugia shall not have any obligation to compensate, based on contractual or non-contractual responsibility, any direct or indirect damages for any amount exceeding the total amount of the fees paid for any portion of the service provided by Rizzo Farrugia that may result in Rizzo Farrugia’s responsibility. Rizzo Farrugia shall not be liable to pay compensation for unforeseeable damages or for consequent or incidental damages, or damages related to losses, including loss of profits, savings, or investment opportunities.
- Fees and Expenses
5.1. The fees and expenses due for the services under the Agreement are specified in the Fees section in the Client Agreement and/or as provided by Rizzo Farrugia, and any Addendum to the Agreement as may be applicable and may be revised by Rizzo Farrugia from time to time and communicated to the Client in terms of clause 26.4 of this Agreement. The Client is deemed to have accepted the changes in fees and expenses pursuant to this clause if the Client does not, before the proposed date of the change in fees and expenses (or for immediate changes promptly after the change), notify Rizzo Farrugia that the Client does not accept the change in fees and expenses.
In this respect, the Client accepts and authorises Rizzo Farrugia to collect fees due by charging the Client’s cash balance held with Rizzo Farrugia. Should funds not be available on account to cover fees and expenses as and when they fall due, the Client will be asked to deposit sufficient funds into his/her account at Rizzo Farrugia to meet the amount of fees and expenses due. Should the Client not deposit sufficient funds within two weeks, Rizzo Farrugia reserves the right and is hereby authorised to sell sufficient securities held by the Client to make good for and settle the amount due. In the event that the Client defaults in paying any amount when it is due, interest will be payable on the overdue amount at the maximum rate allowed by law, which interest shall accrue daily until Rizzo Farrugia receives full payment.
5.2. Rizzo Farrugia may be paid any fee or commission, or may be provided with any non-monetary benefit in connection with the provision of an Investment Service by any party other than the Client or a person on behalf of the Client, provided that such fee, commission, payment or benefit is designed to enhance the quality of the relevant Investment Service to the Client and does not impair compliance with Rizzo Farrugia’s duty to act in the best interests of the Client and provided further that Rizzo Farrugia shall disclose such fee, commission, payment or benefit to Clients or, where the amount cannot be ascertained, the method of calculating that amount. A fee, commission or non-monetary benefit shall be considered to be designed to enhance the quality of the relevant service to the Client if it is justified by the provision of an additional or higher-level service to the Client, proportional to the level of Inducements received by Rizzo Farrugia, it does not directly benefit Rizzo Farrugia, its shareholders or employees without tangible benefit to the Client, and in relation to an ongoing inducement, such fee, commission, payment or benefit is justified by the provision of an on-going benefit. Such prohibition shall not apply with respect to transactions concluded on a Regulated Market between members and participants thereof which are licensed to undertake investment services as defined under the MFSA Conduct of Business Rules.
5.3. If the Client pays Rizzo Farrugia more than is required for settlement of an investment transaction, Rizzo Farrugia shall promptly, following receipt of cleared funds, repay the difference to the Client, or hold it for the Client on its’ account. Conversely, if Rizzo Farrugia pays the Client more than the amount due for immediate settlement the Client agrees to repay promptly any amount due to Rizzo Farrugia. With respect to any transfers effected by Rizzo Farrugia, if the Client knows and/or suspects receipt of an overpayment of funds and/or securities, or notices that incurred fees and/or expenses have not been collected from the Client’s account, the Client is to notify Rizzo Farrugia in writing, as soon as the Client learns of such overpayment or uncollected fee and further agrees not to remove the overpaid funds or securities or uncollected fees from the account, and to return the entire overpayment or settle uncollected fees to Rizzo Farrugia in the event that such funds or securities have already been removed from the Client’s account. Failure to do so will result with the Client becoming liable to Rizzo Farrugia for the amount of the overpayment, securities or uncollected fees and any interest and expenses associated with their recovery at a rate allowed by law.
6.1. The Client hereby declares and warrants that the monies which form the subject of this Agreement have not originated and will not originate from any operation, transaction or activity which constitutes a criminal offence in Malta or which would constitute an offence if carried out in Malta, and further declares that he/she (and in the case of a legal or a non-legal entity, any of its directors, shareholders, trustee, founder, protector, ultimate beneficial owner/s and any other controlling persons of such entity) is not and was never subject to any financial sanction, court order, freezing order or any other proceedings in relation to any offence involving a criminal activity, and that he/she will inform Rizzo Farrugia immediately should the Client ever become subject to any such financial sanction, court order, freezing order or any other court proceedings. The Client understands and accepts that in providing services under this Agreement, Rizzo Farrugia is bound and will always comply with all applicable laws and regulations.
7.1. The Client further declares and undertakes not to instruct Rizzo Farrugia to transfer the Financial Instruments, held in his/her direct name or held on his/her behalf by Rizzo Farrugia by way of Safekeeping and Administration Services, to third parties except with the consent of Rizzo Farrugia and accepts that Rizzo Farrugia will not be bound to acknowledge any interest therein other than that of the Client. The Client accepts that Rizzo Farrugia may, at its discretion, decline to execute instructions to transfer Financial Instruments into the name of a third party unless and until Rizzo Farrugia is satisfied with its due diligence exercise on the third party.
7.2. Rizzo Farrugia only allows transfers of funds to and/or from the Client’s Account held with Rizzo Farrugia to and/or from the Client’s own account(s) held with a Credit and/or Financial Institutions. Rizzo Farrugia must receive sufficient information about the remitter of funds to ensure the identification of the relevant Client details.
7.3. Payments in favour of the Client’s Account are deposited by Rizzo Farrugia on the condition that Rizzo Farrugia receives the amount in question. This shall apply irrespective of whether it has been explicitly stated in receipts or other notices of payment.
7.4. The Client acknowledges that Rizzo Farrugia cannot be held liable for the number of days passing between the transfer of funds by the sending bank until the funds are received by Rizzo Farrugia and booked on the Client’s Account. Conversely, the Client acknowledges that Rizzo Farrugia cannot be held liable for the number of days passing between the transfer of funds from Rizzo Farrugia until the funds are deposited on the account the Client by the receiving bank. Additionally, Rizzo Farrugia is entitled to a reimbursement of banking fees which are borne by Rizzo Farrugia for the execution of transfer of funds to the Clients.
8.1. The Client warrants that all information supplied to Rizzo Farrugia as part of the Agreement is accurate and complete in all respects and that material changes which may occur from time to time including, but not limited to, changes in the Client Profile including information provided for the purposes of suitability, tax status, PEP status, and other personal circumstances will be promptly (and in any event not later than 15 days) advised to Rizzo Farrugia.
- Unsolicited Calls
9.1. Unless the Client specifies otherwise in writing, Rizzo Farrugia or an associated company shall be at liberty to telephone or contact the Client without having been expressly invited to do so by the Client.
- Aggregation of Orders
10.1. Rizzo Farrugia may combine the Client’s order/s with its own orders, or persons connected with Rizzo Farrugia or orders of other customers. Whilst Rizzo Farrugia shall not carry out a client order or a transaction for own account in aggregation with another client order unless it is unlikely that the aggregation of orders and transactions will work overall to the disadvantage of any client whose order is to be aggregated, in certain circumstances aggregation may work to the Client’s disadvantage, as for example when the supply of the security in question is insufficient to meet the aggregated order. If Rizzo Farrugia aggregates transactions for own account with one or more Client orders, then the Client’s order shall be allocated first and in the case of multiple Clients, the Clients’ orders shall be allocated first. This shall apply also in the case of partial execution of an aggregated order. Rizzo Farrugia will only allocate transactions to its own account after all clients’ order/s have been satisfied.
- Conflicts of Interests
11.1. Rizzo Farrugia will take all reasonable steps designed to prevent any conflicts of interest from adversely affecting the interests of its Clients when providing investment services. Rizzo Farrugia shall avoid conflicts of interest where this is possible and where it is not, it shall ensure, by way of internal procedures and/or disclosure to the Client, that Clients are treated fairly. Further details on Rizzo Farrugia’s conflicts of interest policy are available in its Conflict-of-Interest Policy available upon request and on rizzofarrugia.com. Subject to the above, Rizzo Farrugia may provide advice or effect any transaction under this Agreement notwithstanding that it has a direct or indirect material interest in any transaction concerned, including when it holds the relevant securities for its own account, or has a relationship of any description with another person such as to place it in a position where its duty or interest in relation to that other person conflicts with its duty to clients.
11.2. None of the services to be provided to the Client, nor any other matter shall create or give rise to any fiduciary duties on the part of Rizzo Farrugia which would in any way prevent or hinder Rizzo Farrugia from acting in a dual capacity (either as principal or agent) in respect of Financial Instruments sold or purchased by the Client.
11.3. Rizzo Farrugia is not under a contractual obligation to conduct its activity exclusively with one or more specific issuers of instruments.
- Client’s Money
12.1. Rizzo Farrugia shall deal with the Client’s money in accordance with its licence conditions and the Conduct of Business Rules of the MFSA. In this respect, Rizzo Farrugia shall hold the Client’s money segregated from its own money. The Client’s money will be held in separate clients’ bank accounts held with local or foreign licensed credit institutions, designated ‘Rizzo, Farrugia & Co (Stockbrokers) Ltd – Client’s a/c’. Monies can be held separately or together with monies belonging to other Clients but always segregated from Rizzo Farrugia’s own monies. Where such monies are held by Rizzo Farrugia in a common account and hence undesignated to any one specific Client, Rizzo Farrugia retains full and proper records at all times recording the entitlement of each Client’s monies held in such common account with other clients.
12.2. In providing Discretionary Portfolio Management services, Rizzo Farrugia shall hold the Client’s money in separate clients’ bank accounts designated ‘Rizzo, Farrugia & Co (Stockbrokers) Ltd – Clients a/c’, held with local or foreign licensed credit institutions. Monies can be held separately or together with monies belonging to other clients but always segregated from Rizzo Farrugia’s own monies.
12.3. If Rizzo Farrugia receives money from the Client for investment, it will hold such monies in its client’s account/s pending investment. If Rizzo Farrugia receives money on behalf of the Client, unless otherwise instructed by the Client, it will forward it either by cheque at the Client’s latest known address or, if Client has provided Rizzo Farrugia with the bank account details, Rizzo Farrugia shall credit any such monies received to the Client’s bank account.
12.4. Rizzo Farrugia will not pay any interest on Client’s funds paid on account and/or held on their behalf whether pending investment or otherwise.
12.5. Rizzo Farrugia is a participant in the Investor Compensation Scheme established under the Investor Compensation Scheme Regulations (S.L. 370.09). The Investor Compensation Scheme pays compensation, subject to certain limitations, to eligible consumers in the case of the failure of an authorised investment firm. “Investors”, as defined in the Investor Compensation Scheme Regulations who entrust instruments or money with Rizzo Farrugia are only entitled to compensation if the Investors satisfy the terms of the Investor Compensation Scheme Regulations. Further information is available from compensationschemes.org.mt.
- Client Assets
13.1. Rizzo Farrugia shall provide Safekeeping and Administration Services in respect of portfolios with a minimum market value EUR 250,000. Rizzo Farrugia reserves the right, at its sole discretion, to terminate its Agreement with the Client should the value of the portfolio fall below this threshold.
13.2. For Discretionary Portfolio Management Services, including PINS Service, and in respect of Client Assets held by Rizzo Farrugia on behalf of its Clients by way of Safekeeping and Administration Services, Rizzo Farrugia shall:
13.2.1. hold the Financial Instruments registered in its name by way of its provision of Safekeeping and Administration services for its Client who remains the beneficial owner, and all distributions and benefits in respect thereof in relation to the Financial Instruments as registered in its name shall pertain to the Client.
13.2.2. promptly and fully account to the Client (or as he/she may direct) for all distributions, interest and/or other benefits accrued or accruing upon the Financial Instruments at any time whilst they are registered in its name and the Client shall receive and give a good discharge for all such distributions and other benefits.
13.2.3. exercise all rights and privileges attaching to the Financial Instruments in such manner as it considers being in the best interest of the Client, unless the Client shall have otherwise expressly directed. For avoidance of doubt, it is expressly stated that Rizzo Farrugia shall not be bound to seek the instructions of the Client or to inform the Client of any rights and privileges attaching to the Financial Instruments from time to time.
13.2.4. transfer, pay, and deal with the Financial Instruments and all benefits receivable in respect of the same in such manner as the Client shall direct; and
13.2.5. in respect of Client Assets held by Rizzo Farrugia on behalf of its Clients by way of Safekeeping and Administration Services other than for Discretionary Portfolio Management Services and PINS, Rizzo Farrugia shall not sell, transfer, charge, encumber or otherwise alienate or deal with the Financial Instruments except as expressly directed by the Client.
13.3. Client Assets, held by Rizzo Farrugia on behalf of its Clients by way of Safekeeping and Administration Services, may be placed and kept in a common pool of identical or similar assets, or otherwise held in a common clients’ securities account. Accordingly, the Client will be entitled to an amount of assets of the same description and of the same amount. Although units in an instrument may not be separately identifiable, full, and proper records will be kept at all times recording the entitlement of each Client’s assets held in common with other clients.
13.4. Client assets held by Rizzo Farrugia by way of Safekeeping and Administration Services and which are listed on the Malta Stock Exchange shall be held with the Central Securities Depository of the Malta Stock Exchange in Rizzo Farrugia’s name on behalf of Clients. In the case of foreign securities, Rizzo Farrugia shall be entitled to remit orders to a third party/ies such as licensed investment firms and/or credit institutions for either onward transmission of order or for execution of order by such third party. Therefore, any foreign securities held by Rizzo Farrugia on behalf of Clients are held on an account held in the name of Rizzo Farrugia on behalf of clients with such third party/ies. Such third party/ies may in turn enter or have entered into agreements with custodian/s for the provision of custody services in relation to one or more of securities. Rizzo Farrugia shall reconcile its record of Client assets with such third-party on a periodic basis to ensure the accuracy and completeness of such records at all times.
13.5. Where a Financial Instrument is held by a third party custodian on behalf of Rizzo Farrugia, Rizzo Farrugia is hereby notifying Clients that such third party may enter or have arrangements with custodian/s, credit institutions and/or banks outside EEA country, and in such circumstances the legal and regulatory regime may differ from that applicable in the EEA country, with the effect that in the event of insolvency or equivalent failure of such custodian, credit institutions and/or bank, the treatment afforded to Client funds may be different from the treatment afforded to Clients Funds held in an account with a custodian, credit institutions and/or bank subject to EEA laws.
13.6. Rizzo Farrugia shall not be liable for any loss or prejudice suffered by the Client as a result of the insolvency or equivalent failure of any third party, including any third party custodian/s. Rizzo Farrugia shall not be liable for any loss or prejudice suffered by the Client as a result of the acts or omissions of any third-party custodians providing safekeeping and administration services to third party/ies to whom Rizzo Farrugia may remit orders for onward forwarding or execution of order and/or transfer of assets by such third party. Where Rizzo Farrugia delegates or entrusts functions, duties, or assets in accordance with specific written instructions from the Client, Rizzo Farrugia shall not be liable for any loss or prejudice suffered by that customer as a result of the acts or omissions of the person to whom functions, duties or assets are delegated or entrusted as requested by the Client.
13.7. Where reasonably required by the nature of the assets and of the arrangements whereby control is to be exercised, Rizzo Farrugia or any third parties to whom Rizzo Farrugia remits orders or any third parties providing safekeeping arrangements to Rizzo Farrugia, may make use of any market clearing system, settlement system, dematerialised book entry system, centralised custodial depository, or similar system (“Settlement Systems”). Such Settlement Systems may also be used to effect transactions including conveyance, assignment, transfer, transmission held under the control of Rizzo Farrugia, whether directly or through third parties, and the law of the country in which the system is maintained shall apply to the validity of such transactions notwithstanding the provisions of any other law. By entering into the General Client Agreement, the Client consents to have Rizzo Farrugia make use of Settlement Systems and accordingly, Rizzo Farrugia or any third parties shall not be held liable for any loss or damage arising as a result of assets being held or transacted on any Settlement System, the use of any Settlement System, or any act, omission or the insolvency of any Settlement System or its operator.
14.1. The Client shall have the right to inspect trade confirmations, vouchers, and copies of entries on books or electronic recording media relating to transactions effected on the Client’s behalf. Such records will be maintained by Rizzo Farrugia for a period up to ten years from the date of the transaction, unless otherwise required by law or regulations.
15.1. It shall be the sole and exclusive responsibility of the Client to ensure that any liability to tax, in relation to the Financial Instruments, of whatever nature, whether arising or due in Malta or outside Malta, shall be settled or otherwise dealt with according to law. The following information is a generic non-exhaustive guideline restricted solely to individual investors who are considered in terms of Maltese income tax law as ordinarily resident and domiciled in Malta. The precise implications for investors will depend on, amongst other things, their particular circumstances. Investors are urged to seek professional tax advice in their specific context. In the case where the income from underlying investments qualifies as ‘investment income’ as defined by Articles 41 and 41A of the Income Tax Act (Cap 123 of the Laws of Malta), the said income will be subject to a final withholding tax, currently at 15%. Where the underlying investment consists of shares in Maltese companies, any applicable tax on the dividend will be deducted at source. Capital gains arising from the disposal of bonds and equities listed on the Malta Stock Exchange and certain international stock exchanges recognised by the Commissioner of Inland Revenue, currently qualify from a capital gains tax exemption. Disposal of other foreign securities may give rise to payment of Capital Gains tax. Rizzo Farrugia does not accept any responsibility on any Client tax matters and recommends that Clients seek professional tax advice.
The Client shall receive investment income net of tax deducted at source at the applicable rate in respect of any interest / dividend received in respect of any Financial Instrument unless the Client shall have instructed Rizzo Farrugia not to withhold tax at source. The Client declares to be aware that in the event that it will have instructed Rizzo Farrugia not to withhold tax at source, the Client shall be responsible for making the appropriate tax declarations. Furthermore, it shall be the Client’s responsibility to verify that the Client’s instructions have been duly complied with on any order form, contract note, remittance/dividend advice, or tax certificate, and Rizzo Farrugia shall have no responsibility in respect thereof.
Rizzo Farrugia is required to disclose information annually on the investment income received by each underlying beneficiary to the tax authorities according to law. This requirement applies irrespective of whether the investment income is being received gross or net of final withholding tax.
The Client shall inform Rizzo Farrugia without delay of any change to the Client’s residency or citizenship status and/or tax status. The Client shall also provide any information concerning his identity or affairs that Rizzo Farrugia may request from time to time.
It may be obligatory for Rizzo Farrugia to share information with the Counterparty/ies through whom orders are remitted and/or execution trades undertaken on behalf of the Clients, with the Maltese and/or other countries’ tax authorities in compliance with Foreign Account Tax Compliance Act (FATCA) and/or its obligations in relation to Automatic Exchange of Information under the Common Reporting Standards (CRS)/ EU Council Directive 2014/107/EU (DAC II). To facilitate any such reporting, Rizzo Farrugia may request additional information from the Client. If the Client does not provide any requested information within any stipulated deadlines, third parties to whom Rizzo Farrugia remits orders for execution and/or Rizzo Farrugia may be obliged by the law and/or regulations governing such third parties and/or Rizzo Farrugia, including but not limited, to withhold all or parts of any specified receipts by the Client. Any withheld amounts by such third parties and/or Rizzo Farrugia on behalf of its’ Clients may have to be passed on to the Maltese or relevant overseas tax authorities.
- Corporate Actions (Applicable only to Financial Instruments held by Rizzo Farrugia on behalf of its Clients by way of the provision of Safekeeping and Administration Services other than Discretionary Portfolio Management and PINS).
16.1. Shareholder Rights Directive II (“SRD II”) requires financial intermediaries to transmit to the ultimate shareholders, all key information regarding corporate events other than a general meeting which the EU listed company is required to provide to its shareholders to enable them to exercise the rights emanating from its shares. In respect of EU listed companies, Rizzo Farrugia will communicate to Clients all key information regarding such corporate events as issued by companies and transmitted by intermediaries as well as the options available for the exercise of shareholders rights. In relation to corporate events by EU and non-EU listed companies, Rizzo Farrugia will seek to obtain instructions from Clients by the relevant deadline, whether such instructions are provided generically or specifically in respect of each corporate event. Any information sent will be for information purposes only and will not be a recommendation. The Client acknowledges and understands that unless Rizzo Farrugia is in receipt of written instructions from the Client within the deadline set by Rizzo Farrugia, no action will be taken in respect of such corporate actions and the default option shall apply. Therefore, Clients are made aware that certain corporate actions, including but not limited to, conversion rights may become worthless at expiry unless exercised and conversion bonds may be left to mature.
16.2. If for reasons outside the control of Rizzo Farrugia, such as, insufficient timely notification by a company or any intermediary, it is not possible to notify and obtain instructions by the Client/s and/or communicate any Client instructions to any intermediary and/or company in good time prior to the deadline by the company and/or intermediary, Rizzo Farrugia and/or the intermediaries transmitting such instruction may not be in a position to act on such corporate action options, in which case the default option would apply.
16.3. Without prejudice to clause 16.1, Rizzo Farrugia, may at its sole discretion, if deemed in the Client/s’ best interest, act on behalf of the Client/s to instruct the third party and/or custodian, as the case may be, on a voluntary corporate action option. Rizzo Farrugia is, however, under no obligation to undertake this option and is only likely to exercise it under exceptional market conditions affecting the market in general or in relation to a specific security, and in an attempt to mitigate Client/s’ losses.
16.4. The Client/s shall accordingly indemnify and hold Rizzo Farrugia harmless for any loss (including opportunity costs) suffered in relation to any actions or no actions undertaken in respect of any corporate actions as stipulated above.
16.5. Rizzo Farrugia shall further have the sole discretion on whether or not to assist a Client with any request in relation to any corporate action that Client may request. Rizzo Farrugia may charge commission and fees related to corporate actions as indicate in its fees and commission, if any.
16.6. The Client is made aware and acknowledges that in voluntary corporate action where the alternative to a cash settlement is the settlement in a security that is not supported by the respective custodian, the Client will not have the option to choose, but will be given the cash settlement.
- Disclosure of Client Information
17.1. Rizzo Farrugia and/or third parties to whom Rizzo Farrugia remits orders for execution may be subject to the obligations under applicable laws, regulations, and stock exchange bye-laws to disclose certain information in relation to the Client. The Client acknowledges and consents that such information be provided as required under the relative laws, regulations and bye-laws in order for Rizzo Farrugia and/or third parties to whom Rizzo Farrugia may remit orders for execution comply with the applicable obligations emanating under the laws and regulations and/or bye-laws. Such request may, inter alia, include requests by relevant competent authorities, MFSA, FIAU, Asset Recovery Bureau, Courts of Malta, Tribunals, Office of the Arbiter, Officer of the Commissioner of Revenue, Information and Data Protection Commissioner, as well as under by the MFSA including for the purposes of Markets in Financial Instruments Regulations and Market Abuse Regulation. Such laws, regulations or bye-laws may require Rizzo Farrugia to report Client personal data, as well as certain information about the Client’s holdings held by Rizzo Farrugia under Safekeeping and Administration Services in respect of certain tax obligations such as any income derived therefrom by the Client. In the case of foreign securities held by Rizzo Farrugia under Safekeeping and Administration Services, Rizzo Farrugia may be required to provide certain Client information to its third-party custodians in compliance with international taxation obligations. The Client consents to such reporting as may be required by Rizzo Farrugia due to tax regulatory obligations.
17.2. Rizzo Farrugia is subject to certain obligations under the Shareholder Rights Directive II (“SRD II”). to provide EU Issuers including through intermediaries, at their request or at the request of a third party nominated by them, with certain information regarding the identity of Clients holding shares in such EU Issuer. The Client acknowledges and accepts that at the request of an EU Issuer in which the Client holds shares, or of a third party nominated by the EU Issuer, and only to the extent required under SRD II, Rizzo Farrugia will communicate the relevant information about the Client to the Issuer without delay. As a result, Rizzo Farrugia shall provide the Client’s identity details to any EU listed company in which the Client may hold shares through Rizzo Farrugia, immediately upon the request of such company. Rizzo Farrugia shall not be required to seek your consent prior to providing the Client’s details to the EU listed company.
- Representation at General Meetings and exercise of voting rights
18.1. In respect of Financial Instruments held by Rizzo Farrugia under Safekeeping and Administration Services that have their registered office in the EU and their shares listed on an EU regulated market, Rizzo Farrugia, as a financial intermediary, is required to abide by the SRD II. SRD II establishes requirements in relation to the exercise of certain shareholder rights attached to voting shares of companies. It also establishes specific requirements to encourage long-term shareholder engagement. The requirements apply in relation to, among others, the identification of shareholders, the transmission of information to shareholders, and the facilitation of exercise of shareholders rights. The measures imposed by SRD II have been transposed into local laws as well as the MFSA Capital Market rules and regulations.
18.2. SRD II requires financial intermediaries including Rizzo Farrugia to transmit information to the ultimate shareholders, all information which the EU listed company is required to provide to its shareholders to enable them to exercise the rights emanating from its shares, including information regarding any general meeting convened by an EU listed company. Rizzo Farrugia shall provide the Client with options to elect either, generically and in respect of All EU listed entities, or specifically in respect of EU listed entities selected by the Client, to be notified about the general meetings that may be convened by EU listed entities. By choosing to be so notified in respect of companies in which a Client may hold shares through Rizzo Farrugia at the time of the notification or on the applicable record date, the Client accepts that Rizzo Farrugia may transmit such information to the Client by means of electronic mail, or by mail in the event that the Client does not provide any email address, or any other means as Rizzo Farrugia may consider appropriate including indicating the website where the EU listed company serves notification. Rizzo Farrugia shall not be required to seek confirmation from the Client of receipt of such information.
The Client/s may request not to be notified of any general meeting that may be convened by any EU listed entity in which Rizzo Farrugia may hold shares on his/her behalf. By choosing not to be notified or to be notified specifically in respect of EU listed entities selected by the Client, the Client accepts that he/she has opted-out from receiving any general meeting notifications in respect of all or all other EU listed companies, and that Rizzo Farrugia shall not be transmitting any notice of general meeting in respect of such companies.
18.3. SRD II requires that financial intermediaries including Rizzo Farrugia to facilitate the exercise of the ultimate shareholders’ rights.
18.3.1. Rizzo Farrugia shall provide the Client with the option to elect to exercise the right to participate and vote at general meetings in respect of each general meeting whether, generically and in respect of All EU listed entities or specifically in respect of EU listed entities selected by the Client, in which Rizzo Farrugia may hold shares on the Client’s behalf. By selecting this option, the Client accepts that Rizzo Farrugia may request such voting instruction via electronic mail. The Client shall be entitled to request a copy of the receipt of the vote submitted, where this is made available to Rizzo Farrugia. The Client further accepts that terms and fees may apply as may be communicated to the Client. In the event of any non-response by the Client or any delay by the Client in submitting any voting preferences beyond the deadline that may be communicated by Rizzo Farrugia to the Client, the Client accepts that Rizzo Farrugia shall not take any action in respect of such votes.
18.3.2. Rizzo Farrugia shall provide the Client with the option to refrain from communicating and/or deciding on voting preference at general meetings and further authorise and instruct Rizzo Farrugia to attend and/or vote, on the Client’s behalf, at all general meetings of any EU listed companies in which Rizzo Farrugia may hold shares on the Client’s behalf. By selecting this option, the Client understands and accepts that Rizzo Farrugia shall have the Client’s authority to attend general meetings, and to vote on their behalf, without any prior notification to the Client. In such instances, Rizzo Farrugia shall vote for any resolution in accordance with its voting policy, a copy of which shall be made available to the Client upon request. However, it is understood and agreed, that while Rizzo Farrugia may elect to attend and/or vote at general meetings on the Client’s behalf, Rizzo Farrugia shall not be bound to do so (and may, in fact, choose to take no action at all). The Client further accepts terms and fees may apply as communicated by Rizzo Farrugia to the Client. The Client further accepts that notwithstanding such instruction, Rizzo Farrugia may, as it may deem fit in its sole discretion, nonetheless ask the Client to indicate his/her voting preference in respect of any resolution/s being put forward at any such general meeting. This instruction is without prejudice to the Client’s right to provide Rizzo Farrugia with specific instructions in writing from time to time regarding attendance and/or voting in respect of any EU listed company.
18.3.3. Rizzo Farrugia shall provide the Client with the option to elect not to take any action in respect of attendance and/or voting at all general meetings of all EU listed companies in which Rizzo Farrugia may hold shares on the Client’s behalf. By selecting this option, the Client accepts that neither the Client nor Rizzo Farrugia shall be exercising his/her voting rights on his/her behalf at such general meetings. This instruction is without prejudice to the Client’s right to provide Rizzo Farrugia with specific instructions in writing from time to time regarding attendance and/or voting in respect of any EU listed company.
18.4. The Client may amend any instructions provided to Rizzo Farrugia at any time by sending Rizzo Farrugia an instruction in writing to this effect.
19.1. Trade confirmations and other advice relating to the Financial Instruments held by Rizzo Farrugia under Safekeeping and Administration Services for and on behalf of the Client under Discretionary Portfolio Management and/or PINS, will not be sent to the Client immediately after the trade but held on file and sent periodically thereafter. Information on each transaction effected on behalf of the Client will be contained in the statement of cash movements supplied with each investment portfolio valuation as at the end of each quarter of each calendar year. The valuation will be sent to the Client’s last known address or via email to the Client’s email address, unless otherwise instructed by the Client.
In respect of Financial Instruments held by Rizzo Farrugia under Safekeeping and Administration Services other than under Discretionary Portfolio Management and/or PINS, a valuation of the Financial Instruments held and a statement showing all transactions connected to this Agreement will be sent to the last known address (postal or email) of the Client every three months. Similarly, in respect of such Financial Instruments, dividend and/or interest advice will, unless otherwise instructed by the Client, be dispatched to the Client within a reasonable period of time following receipt of dividend/interest on securities held. This advice will clearly indicate the gross amount received, tax withheld at source and net amount paid to the Client.
(For Discretionary Portfolio Management)
In terms of the MFSA Conduct of Business Rules, Rizzo Farrugia is obliged to immediately inform you in the event that the value of your portfolio declines by 10% and thereafter in multiples of 10% or more since the last reporting period. It is hereby mutually agreed that such report shall apply on the aggregate portfolio value and not on an individual investment basis. Where we hold your email address, such delivery and/or notification may be made via email.
20.1. The Client may terminate this Agreement upon immediate written notice given to Rizzo Farrugia and without penalty. Rizzo Farrugia may also terminate this Agreement immediately by written notice given to the Client without penalty. Termination shall also automatically take effect, without the need for written notice, in the event that the Client account is inactive for a period of two (2) years, unless otherwise expressly determined by Rizzo Farrugia at its sole discretion. In any event, termination shall not affect any legal rights or obligations which may have arisen, including the rights and liabilities of any of the parties in respect of transactions for which there is an outstanding liability.
In respect of Financial Instruments held by Rizzo Farrugia under Safekeeping and Administration Services, in the event of termination for any reason whatsoever, the Client shall, without delay, give Rizzo Farrugia disposal or transfer instructions relating to all the Financial Instruments and/or any monies held by Rizzo Farrugia on the Client’s behalf. Rizzo Farrugia shall have the right to dispose of the Financial Instruments or part thereof itself or to retain proceeds from the disposal of the Financial Instruments following instructions from the Client, for the purpose of reimbursement of its proper expenses and for remuneration of its services until the date of disposal of the Financial Instrument.
Rizzo Farrugia is entitled to amend the Terms, as permitted by law, without notice. Any changes to this agreement which are not in the Client’s favour may take place at any time by giving notice to the Client at least thirty (30) days in advance and in a durable medium unless a change in the MFSA Conduct of business Rules and any applicable laws and regulations to which Rizzo Farrugia is subject to requires it to take immediate action. The Client is deemed to have accepted such changes if, before the proposed date of coming into force, the Client fails to notify Rizzo Farrugia that he does not accept them.
- Governing Law and Jurisdiction
21.1. This Agreement is subject to the rules and regulations of the MFSA and the Malta Stock Exchange. The Agreement shall be governed, construed, and interpreted in accordance with Maltese Law and the parties agree to submit to the non-exclusive jurisdiction of the Maltese Courts in respect of this Agreement, its validity, termination, and enforceability.
- Risk Warnings
22.1. The Client acknowledges and accepts that:
22.1.1. Past performance is not necessarily a guide to future performance and the value of investments and the currency in which they are denominated may go down as well as up.
22.1.2. Investments in emerging markets can be subject to risks which are not normally associated with more developed markets.
22.1.3. Investments in the Financial Instruments issued by smaller companies can involve greater risk than is customarily associated with investments in larger and more established companies.
22.1.4. The Malta Stock Exchange is a relatively small market when compared to more established international markets. Accordingly, the investments that can be made on the Malta Stock Exchange are limited. This may lead to an exposure to a particular security or industry sector which is higher than that normally associated with a diversified portfolio. This may expose the portfolio to higher levels of volatility and may adversely affect the performance of the portfolio.
22.1.5. The value of any investment and the income therefrom can fluctuate and the Client may not get back the amount originally invested.
22.1.6. Depending on the Client’s reference currency, exchange rate fluctuations between Client’s reference currency and the currency of the investments in the portfolio may adversely affect the value of investments and the income derived therefrom.
22.1.7. During a period of high inflation, a Client’s real return on an investment will be lower than the nominal rate of return and thus undermine the expected return from the investments.
23.1. Both parties to these terms will at all times respect and protect the confidentiality of information acquired in consequence of this Agreement except under compulsion of law including, without limitation, requirements imposed by the tax authorities, the Malta Financial Services Authority and/or the Malta Stock Exchange.
- Data Protection
Neither Rizzo Farrugia nor the Client may disclose any Personal Data and each party shall use all reasonable endeavours to prevent any such disclosure, except as set out herein. The Client authorises Rizzo Farrugia to disclose personal data including personal data as may be required by applicable law, any regulatory and/or supervisory authority, public or governmental authority and/or to disclose any information before any court or adjudicating body of competent jurisdiction where such disclosure is compelled by law or authorised/ordered by a court or adjudicating body of competent jurisdiction without prior notice to or consent from the Client. The Client further authorises Rizzo Farrugia to disclose personal data relating to the Client in order to enforce applicable terms of this Agreement, including investigation of potential violations, and in order to detect and prevent and respond to ICT security threats, and to protect against any harm to the rights, property and safety of Rizzo Farrugia and/or its employees and /or its users, if any. The Client authorises Rizzo Farrugia to transfer personal data to third party providers to whom Rizzo Farrugia may outsource certain functions in order to provide the Client with the products and/or services in the EU and/or countries outside the EU determined by the European Commission on the basis of article 45 of Regulation (EU) 2016/679 to offer an adequate level of data protection and/or to other third countries provided that such transfer can take place provided Rizzo Farrugia makes adequate provision of appropriate safeguards by way of contractual arrangements with such third party as recipient of the personal data including enforceable rights and effective legal remedies for individuals .
- Clients residing outside Malta.
25.1. No person receiving a copy of the Agreement (or any document in connection with the services contained in this Agreement) in any jurisdiction other than Malta or accessing Rizzo Farrugia’s services in any jurisdiction other than Malta may treat the same as constituting an invitation or offer to him/her nor should he/she in any event use any Rizzo Farrugia documentation or form or use any of its services unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to him or such document or service could lawfully be used without contravention of any applicable laws.
25.2. It is the responsibility of any person residing outside Malta wishing to make any application or use of any service to satisfy himself/herself as to full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any requisite governmental or other consents, observing any other formalities required to be observed in such jurisdiction and paying any obligations, including taxes, required to be paid in such jurisdiction.
26.1. All transactions and services are subject to all applicable Maltese legislation or other rules and regulations in each case as are in force from time to time and any such rules, regulations and laws will prevail in the event of any conflict with this Agreement. Rizzo Farrugia may, so as to be binding upon the Client, take or omit to take any action it considers fit to ensure compliance with any such rules, regulations, and laws.
26.2. Each provision hereof is severable and in the event of any provision becoming invalid or contravening any applicable laws, rules or regulations, the remaining provision shall continue to be binding on Rizzo Farrugia and the Client.
26.3. This Agreement is personal to the parties hereto and shall not be capable of assignment.
26.4. This Agreement shall constitute the entire agreement and understanding between the parties hereto and supersedes all previous written and/or verbal agreements. For the avoidance of doubt, the term ‘Agreement’ includes all additional Addendums to this Agreement, if any. With respect to transactions entered into under this Agreement, the individual order forms, application forms and/or assessment forms, shall also, with respect to the transactions described therein, constitute the entire agreement and understanding between the parties hereto. This Agreement in its entirety, or parts thereof, may be amended by Rizzo Farrugia by general notice in writing, or on Rizzo Farrugia’s website, or by email to all its clients or to a specific client, and the said amendments shall enter into force and form an integral part of this Agreement, on the date mentioned in the amendment notice or webpage, unless the Client gives notice in writing or by email to Rizzo Farrugia that he/she objects to such amendments.
- GLOSSARY OF TERMS
27.1. The Glossary of Terms may be updated from time to time without notice to Clients so as to reflect applicable laws, regulations, bye-laws and rules.
General definitions applicable throughout this Agreement
‘Agreement’ refers to the General Client Agreement entered into with the Client/s together with these Terms of Business and any other Addendums to the General Client Agreement, as may be applicable from time to time or specific to a service provided by Rizzo Farrugia.
‘Client’ refers to the person in whose name the account is being held, and in the case of joint accounts, refers to each account holder both jointly and individually and refers to the company (or other form of legal arrangement including partnerships, sole traders, trusts, foundations, etc) in whose name the account is being held, and may also refer to each Decision Maker, Authorised Signatory, shareholder or ultimate beneficial owner of the Client as may be inferred by the context in which the term is being used.
‘Financial Instrument’ refers to any type of investment listed in the Agreement.
‘Deal’ refers to any direct/indirect acquisition or disposal of, or agreement to acquire or dispose of any Financial Instrument, entering into any contract the purpose of which is to secure a profit or avoid a loss by reference to fluctuations in price of any Financial Instrument and the grant, acceptance, acquisition, disposal, exercise or discharge of any option (whether for the call, put or both) or other right or obligation, present or future, conditional or unconditional, to acquire or dispose of Financial Instruments, or any interest in the Financial Instruments.
‘Designated Director’ refers to the Chairman and/or one or more Directors of the Listed Company that has/have been designated to monitor and/or approve trading by Restricted Persons, including ensuring compliance with the MFSA Capital Market Rules and the Internal Code of Dealing.
‘Eligible Counterparty’ refers to investment firms, credit institutions, insurance companies, UCITS and their management companies, pension funds and their management companies, other financial institutions authorised or regulated under EU law or under the national law of a Member State, national governments and their corresponding offices including public bodies that deal with public debt at national level, central banks, and supranational organisations.
‘Internal Code of Dealing’ refers to the internal rules of the Listed companies whose Financial Instruments are listed on a stock Exchange which regulate trading by Restricted Persons.
‘Professional Client per se’ refers to a client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs. The following should all be regarded as professionals in all investment services and activities and with respect to all the financial instruments:
- Entities which are required to be authorised or regulated to operate in the financial markets including all authorised entities carrying out the characteristic activities of the entities mentioned: entities authorised by a Member State under a Directive, entities authorised or regulated by a Member State without reference to a Directive, and entities authorised or regulated by a Non-Member State:
i. Credit Institutions
ii. Investment Firms
iii. Other authorised or regulated financial institutions.
iv. Insurance Companies
v. Collective investment schemes and management companies of such schemes
vi. Pension funds and management companies of such funds
vii. Commodity and commodity derivatives dealers
ix. Other institutional investors
- Large undertakings meeting two of the following size requirements on a company basis:
i. balance sheet total: EUR20,000,000
ii. net turnover: EUR40,000,000
iii. own funds: EUR2,000,000
- National and regional governments, public bodies that manage public debt, Central banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB, and other similar international organisations.
- Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitisation of assets or other financing transactions.
‘Elective Professional Client refers to Clients not falling under the definition of Professional Client per se, but request to be treated as Professional Clients, including public sector bodies, local public authorities, municipalities, and private individual investors, subject to the meeting the conditions as specified in the Addendum to Elective Professional Clients.
‘Retail Clients’ refers to clients that are neither professional clients nor Eligible Counterparties.
With reference to the sub-heading entitled ‘RESTRICTED PERSONS, PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES WITHIN AN ISSUER, AND THEIR CONNECTED PERSONS/CLOSE ASSOCIATES’ of the Agreement
‘Restricted Person’ refers to a listed company’s directors or directors of its subsidiary or parent undertaking, and any of its officers or employees or an officer or employee of its subsidiary or parent undertaking who, because of his office or employment in the listed company or subsidiary undertaking or parent undertaking, is likely to be in possession of unpublished price-sensitive information in relation to the listed company.
‘Connected Person’ to a Restricted Person refers to:
(a) a member of a Restricted Person’s family including spouse, partner, parents, children, and other dependants.
(b) a body corporate owned or controlled by a Restricted Person or any person mentioned in the aforementioned point (a) to the extent of 20% or more.
(c) a trustee of a trust, the beneficiary of which is a Restricted Person, a person mentioned in point (a) or a body corporate as described in point (b) above.
(d) a business partner of a Restricted Person or any person/body corporate/trustee mentioned in points (a), (b) and (c).
‘Person Discharging Managerial Responsibilities’ refers to a member of the administrative, management or supervisory bodies of the listed company, or a senior executive having regular access to inside information and the power to make managerial decisions affecting the future developments and business prospects of the company.
‘Person Closely Associated with a Person Discharging Managerial Responsibilities’ refers to:
(a) the spouse, or equivalent;
(b) dependent children;
(c) other relatives who have shared the same household for at least one year; or
(d) any legal person, trust, or partnership whose managerial responsibilities are discharged by a person referred to in (a), (b) or (c), or by a person discharging managerial responsibilities within a listed company, or which is directly or indirectly controlled by such a person, or set up for the benefit of such person, or whose economic interests are substantially equivalent to those of such person.
‘MFSA Capital Market Rules’ refers to the rules issued by the Malta Financial Services Authority in terms of the Financial Markets Act, Cap 345 of the Laws of Malta.
‘Politically Exposed Persons’ means natural persons who are or have been entrusted with prominent public functions in or outside Malta, other than middle ranking or more junior officials. For the purposes of this definition the term “natural persons who are or have been entrusted with prominent public functions” means:
(a) Heads of State, Heads of Government, Ministers, Deputy or Assistant Ministers, and Parliamentary Secretaries.
(b) Members of Parliament or similar legislative bodies.
(c) Members of the governing bodies of political parties.
(d) Members of superior, supreme, and constitutional courts or of other high-level judicial bodies whose decisions are not subject to further appeal, except in exceptional circumstances.
(e) Members of courts of auditors or of the boards of central banks.
(f) Ambassadors, charges d’affaires and high-ranking officers in the armed forces;
(g) Members of the administrative, management or supervisory boards of State-owned enterprises.
(h) Anyone exercising a function equivalent to those set out in paragraphs (a) to (f) within an institution of the European Union or any other international body; and
(i) Anyone entrusted with a prominent public function listed in an order issued by the Minister in terms of article 12(5) of the Prevention of Money Laundering Act from time to time or included in any other equivalent list issued by any other jurisdiction or international organisation.
With reference to the sub-heading entitled ‘POLITICALLY EXPOSED PERSONS’ of the Agreement
‘Family members’ of PEPs include: the spouse, or a person considered to be equivalent to a spouse; the children and their spouses or partners; and the parents.
‘Close associates’ of PEPs shall include:
(a) a natural person known to have joint beneficial ownership of a body corporate or any other form of legal arrangement; or any other close business relations with that PEP; or
(b) a natural person who has sole beneficial ownership of a body corporate or any other form of legal arrangement that is known to have been established for the benefit of that PEP.
‘Safekeeping and Administration Services’ refers to the Ancillary Services under MIFID II for the Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as when Rizzo Farrugia holds and administers securities in its own name on behalf of its clients.
Effective from 1 February 2024