Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is a member of the Malta Stock Exchange (“MSE”) and holds a Category 3 licence issued by the Malta Financial Services Authority (“MFSA”) of Notabile Road, Mriehel, Malta under the Investment Services Act. The MFSA’s Investment Services register may be verified on the webpage https://www.mfsa.com.mt/pages/licenceholders.aspx. The following general terms of business set out our relationship with you the ‘Client’.
1. General terms
1.1. The Conduct of Business Rules (the “Rules”) issued by the MFSA 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/matters. Rizzo Farrugia is obliged to classify investors as Retail clients or Professional clients before acceptance.
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 the level of protection afforded to them by the Rules will be lower than that offered to Retail Clients. This may also include the loss of investor compensation scheme rights.
Non-advisory / Execution-only services
1.3. Where Rizzo Farrugia’s services under this Agreement are of a non-advisory/execution-only nature, Rizzo Farrugia will act exclusively on the basis of instructions received from the Client. In this case, 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.
1.4. For non-advisory/execution-only clients, Rizzo Farrugia may at its discretion decline to execute an order if it considers, on the basis of the information contained in Sections C and D that the product or service is not appropriate for the Client. Furthermore, where the Client elects not to provide the required information or where he 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.
1.5. 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 of the Rules.
1.6. When the Retail Client places a non-advisory / execution-only order in a complex instrument or in a non-complex instrument 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 security under consideration. Where the execution-only / non-advisory order in a complex instrument is not considered appropriate for the Client, Rizzo Farrugia may execute the order solely under investment advice, and in this event, the Addendum for Advisory Services would need to be completed and signed.
1.7. 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 Client’s portfolio as elected by the Client in Section C, 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 security or on the overall investment portfolio, for the purposes of seeking to achieve the investment objectives in terms of Section F of this Agreement. Decisions are however taken by the Client every time an acquisition or disposal of an investment is carried out.
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 main 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 on the basis that Rizzo Farrugia may not have analysed a sufficiently wide range of similar securities to that in the recommended transaction/s or course of action.
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 may 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, the Client may choose to either instruct Rizzo Farrugia to delay the execution of the trade until such time for Rizzo Farrugia to prepare and submit the report to the Client, or to instruct Rizzo Farrugia to execute the trade and provide the Suitability Report as soon as possible thereafter. 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. While each investment advice provided by Rizzo Farrugia to the Client shall also indicate whether the advice provided is likely to require the Client to seek a periodic review of the advice provided, it shall then be the Client’s responsibility to instigate such periodic review with Rizzo Farrugia. Such periodic review shall also be subject to the terms and fees as may be applied by Rizzo Farrugia from time to time. Rizzo Farrugia shall generally recommend that Retail Clients seek a periodic review of any investment advice received, particularly in the case of complex instruments. The Client is hereby warned that where the advice will not be subject to a periodic review for any reason, including cases where a periodic review is considered advisable by Rizzo Farrugia but the periodic review is subsequently not instigated 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 for the Client when giving advice, the Client must complete Sections C, D, E and F of this Agreement as explained within each section. Rizzo Farrugia will not provide advice to Clients who refuse to disclose to Rizzo Farrugia all the necessary information required in Sections C, D, E and F of this Agreement that are needed in order to assess suitability of an investment for that client.
1.14. 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 in Section C of this Agreement, and shall take an overall view of his/her knowledge and experience when performing an assessment of suitability.
1.15. In the case of Professional Clients, Rizzo Farrugia shall assume that the client possesses the necessary knowledge and experience in respect of all securities.
General terms applicable to all client orders
1.16. The Client hereby instructs Rizzo Farrugia, who accepts, to acquire any of the financial instruments detailed in Section L, and in accordance with the descriptions stipulated therein, as may be amended from time to time (hereinafter referred to as the ‘Instruments’). Unless otherwise instructed by the Client, Rizzo Farrugia will not act as nominee on behalf of the Client.
1.17. 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 will not be in a position to advance the appropriate funds for settlement, consent is hereby granted to Rizzo Farrugia, for title of the purchased securities which are the subject of the default to be credited to Rizzo Farrugia’s account.
1.18. Rizzo Farrugia and the Client agree that the Client may, in writing, by telephone, or e-mail, request Rizzo Farrugia to acquire/sell Instruments included in Section L of this document. All such means of submitting instructions to Rizzo Farrugia shall be equally binding.
1.19. 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 these instructions and execution by Rizzo Farrugia.
1.20. Rizzo Farrugia shall execute Client’s instructions or any further instructions as aforesaid itself and/or through an associated company 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 Section M.
1.21. EU rules require trading on the local and international stock exchanges to take place at specific tick sizes (ie prices) determined by reference to liquidity bands and the market price band within which the equity is trading. In this respect, while you may continue to provide specific price limits for your trading instructions, you should be aware that the price limit provided may not be a permitted tick size. In such cases, Rizzo Farrugia shall place your order at the next more advantageous tick size available.
1.22. 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 your direct name or under nominee, Rizzo Farrugia is required to share your personal details and your trade order details with the MFSA. In addition, when trading in your direct name, Rizzo Farrugia may need to share some of your personal details (such as date of birth) with the Malta Stock Exchange.
1.23. 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.
Other general terms
1.24. 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 in accordance with Section H of this Agreement, and the said person/s 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, fax 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 Section H.
1.25. 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.
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 Section H and/or Page 22 of this 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: firstname.lastname@example.org
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 e-mail 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 accepts and 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.
2.6. Instructions may be given in Maltese or in English.
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. Complaints must be made in writing (including by email) and Rizzo Farrugia will investigate complaints forthwith. As required by rules issued by the MFSA, any complaint received will be acknowledged in writing and if within fifteen (15) days after receipt of the complaint the investigation has not been completed, Rizzo Farrugia will inform the Client in writing and will continue to try and 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.
4. 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 unless due to fraud or gross negligence on its part. Rizzo Farrugia declares, and the Client accepts, that it is not acting as trustee in respect of the 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 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 unless such loss arises from gross negligence, wilful default or fraud by Rizzo Farrugia or any of its employees. 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, or as a consequence of Rizzo Farrugia acting, or not acting, on instructions submitted or purported to be submitted by the Client by means of telephone, fax, email or any other electronic means.
4.4. The Client assumes full responsibility for all risks in relation to communications by telephone, fax, email or other electronic means, including the risk of unauthorised access, leakages, and errors or breakdown in transmission which are outside the control of Rizzo Farrugia and the Client shall indemnify Rizzo Farrugia for any loss, claim, proceeding, action, demand, cost, expense or other liability incurred as a result of the risks posed by the means of communication used.
4.5. Furthermore, the Client acknowledges that any communication by telephone, fax, email or any other electronic means shall be stored by Rizzo Farrugia in an electronic manner. Such means of communication and their storage are inherently unsecure and can involve risks, including but not limited to, the lack of confidentiality, potential manipulation of contents and/or sender’s address, incorrect recipient (misdirection), data theft, data leakages and viruses. Rizzo Farrugia recommends that the Client does not send any information deemed to be of a sensitive nature via such means, and that the Client does not include details of the previous message in any reply. Rizzo Farrugia assumes no responsibility for any loss or damage resulting from the use of such means of communication or from its storage methods, and 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, the use or storage of such communication by Rizzo Farrugia or by the Client.
4.6. In addition, Rizzo Farrugia may store the Client’s personal or financial details, including trading and portfolio information in an electronic manner, which inherently involves risks, including but not limited to, the lack of confidentiality, data theft and data leakages. 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 the use or storage of such electronic data.
4.7. Rizzo Farrugia may, from time to time prepare research material for circulation 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.
4.8. 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.
5. Fees and Expenses
5.1. The fees and expenses due for the services under this Agreement are specified in Section O, and any addendum to this Agreement as may be applicable, as may be revised by Rizzo Farrugia from time to time and communicated to the Client in terms of clause 22.4 of this Agreement. 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 and settle for the amount due.
5.2. The Client acknowledges and accepts that in the case of collective investment schemes (funds) that are not traded on a stock exchange, Rizzo Farrugia may keep for its own benefit additional fees paid to Rizzo Farrugia by the scheme’s manager which may be up to 50% of the initial charge paid by the Client to the scheme’s manager and up to 35% of the annual management fee charged by the scheme’s manager in relation to the Client.
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 is a criminal offence in Malta or which would constitute an offence if carried out in Malta, and further declares that he/she 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.
The Client further declares and undertakes not to instruct Rizzo Farrugia to transfer the Instruments held in his/her direct name or held on his/her behalf by Rizzo Farrugia on a nominee basis 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 Instruments into the name of a third party unless and until Rizzo Farrugia is satisfied with its due diligence exercise on the third party.
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 investment objectives, tax status, PEP status, and other personal circumstances will be promptly (within 15 days) advised to Rizzo Farrugia.
9. Unsolicited Calls
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.
10. Aggregation of Orders
Rizzo Farrugia may combine the Client’s order/s with its own orders, orders of an associated company or persons connected with Rizzo Farrugia or orders of other customers. 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.
11. 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 customers are treated fairly. Further details on Rizzo Farrugia’s conflicts of interest policy are available in Section N and on the company’s website. 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 investments 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 issuer of instruments (defined as ‘Manufacturer’ by MIFID II and the MFSA Conduct of Business Rules).
12. 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. 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 – Clients a/c’. Monies can be held separately or together with monies belonging to other clients but always segregated from Rizzo Farrugia’s own monies.
12.2. 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.
12.3. 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.
12.4. Rizzo Farrugia is a participant in the Investor Compensation Scheme established under the Investor Compensation Scheme Regulations (Legal Notice 386 of 2003). Further information is available from compensationschemes.org.mt.
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.
14.1. All trade confirmations will be sent to the Client’s last known address. Where we hold your email address, the trade confirmations may be sent by email to that email address.
14.2. In the case of investment advice, in terms of the MFSA Rules, a Suitability Statement shall be provided to the client for each investment advice provided, 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.
It shall be the sole and exclusive responsibility of the Client to ensure that any liability to tax, in relation to the 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 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, 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 securities listed on the Malta Stock Exchange currently qualify from an income tax exemption. Disposal of foreign securities may incur the payment of Capital Gains tax. In this regard Rizzo Farrugia does not accept any responsibility on any Client tax matters and recommends that clients seek professional tax advice.
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.
17. Governing Law and Jurisdiction
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.
18. Risk Warnings
The Client acknowledges and accepts that:
(a) 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;
(b) Investments in emerging markets can be subject to risks which are not normally associated with more developed markets;
(c) Investments in the securities of smaller companies can involve greater risk than is customarily associated with investments in larger and more established companies;
(d) 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. Some companies listed on the Malta Stock Exchange, through their constitutional documents, impose a ceiling on the equity holding that any one particular investor may, directly or indirectly hold in such companies;
(e) The value of any investment and the income therefrom can fluctuate and the Client may not get back the amount originally invested;
(f) 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.
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.
20. Data Protection
21. Clients residing outside Malta
21.1. No person receiving a copy of this 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.
21.2. 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.
22.1. 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.
22.2. 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.
22.3. This Agreement is personal to the parties hereto and shall not be capable of assignment.
22.4. 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 appendices 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.
23. SFDR Disclosures – No Consideration of Sustainability Adverse Impacts
23.1. Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (the “Regulation”), also referred to as the ‘Sustainable Finance Disclosure Regulation’ or ‘SFDR’, seeks to achieve more transparency regarding how ‘financial market participants’ and ‘financial advisers’ integrate sustainability risks into their investment decisions and investment advice. Consequently, this Regulation requires financial market participants and financial advisers to publish written policies on the integration of sustainability risks and to ensure the transparency of such integration. Rizzo Farrugia falls within the scope of the Regulation and is disclosing here-below the required information in terms its regulatory requirements.
23.2. Rizzo Farrugia‘s aim is to consistently take investment decisions or provide investment advice in a highly professional manner and in the best interest of its clients, based on its market knowledge, experience and access to research, and on the basis of a medium or long term investment horizon.
23.3. While, at this point in time, in view of its relatively small size and the potentially cumbersome application of the Regulation, Rizzo Farrugia does not formally and explicitly integrate sustainability risks and consider the adverse impacts (Principal Adverse Impact ‘PIA’) of its investment decisions on sustainability factors as indicated by article 4 of the Regulation (EU) 2019/2088, it shall nonetheless continue to consider, as part of its overall considerations prior to any investment decisions or advice, any significant environmental, social or governance implications connected to a proposed investment that are known to it or that it may become aware of and that may be considered to impact the long-term financial performance of that proposed investment. Rizzo Farrugia also aims to steer away from any investments which may be significantly in conflict with what the Company would consider to be socially and/or environmentally responsible investment decisions or advice. Rizzo Farrugia will continue monitoring market conditions and regulatory developments and may consider the full application of the provisions of the Regulation at a later stage.
23.4. Remuneration Policy. Rizzo Farrugia offers transparency and consistency in the remuneration strategy. In fact all staff members are rewarded by means of a fixed remuneration, thereby eliminating any undue sustainability risk.
DISCRETIONARY PORTFOLIO MANAGEMENT / PINS SERVICE TERMS AND CONDITIONS
The following terms and conditions shall apply in addition to the general terms of business set out in our Agreement with you, the ‘Client’, and any other addendum to the Agreement. All terms of business and client confirmations contained in the Agreement and any addendum thereto shall apply in addition to the below terms and conditions. Any capitalised terms used below shall have the same meaning assigned to them in the Agreement.
1.1. In order for Rizzo Farrugia to assess the suitability of investments for the Client when taking any investment decision on his/her behalf, the Client must complete Sections C, D, E and F of the Agreement, as explained within each section.
1.2. 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 account holder in respect of the portfolio, as indicated by the Client in Section C of the Agreement, and shall take an overall view of his/her knowledge and experience when performing an assessment of suitability.
1.3. Rizzo Farrugia will not provide portfolio management services to Clients who refuse to disclose to Rizzo Farrugia all the necessary information required in Sections C, D, E and F of the Agreement, that are needed in order to assess the suitability of an investment for that client.
2. Client Assets and Client Monies
2.1. Rizzo Farrugia shall:
(a) hold the Instruments registered in its name as nominee for the Client who remains the beneficial owner, and all distributions and benefits in respect thereof in relation to the Instruments as registered in its name shall appertain to the Client;
(b) 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 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;
(c) exercise all rights and privileges attaching to the 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 Instruments from time to time; and
(d) transfer, pay and deal with the Instruments and all benefits receivable in respect of the same in such manner as the Client shall direct.
2.2. Client Assets may be placed and kept in a common pool of identical or similar assets, or otherwise held in a common clients’ 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.
2.3. Client assets 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. Client assets listed on any international stock exchange shall be held in Rizzo Farrugia’s name by a third-party custodian with whom Rizzo Farrugia has custody arrangements in place. Rizzo Farrugia shall reconcile its record of Client assets with the third-party custodian on a periodic basis to ensure the accuracy and completeness of such records at all times.
2.4. 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.
2.5. Where the Financial Instrument is held by a third party custodian on behalf of Rizzo Farrugia, Rizzo Farrugia shall be liable for any loss or prejudice suffered by the Client as a result of the acts or omissions of such third party unless Rizzo Farrugia can prove that such third party was and remains qualified and competent to carry out the functions and duties delegated and that Rizzo Farrugia exercised reasonable care to oversee that the functions and duties delegated were undertaken by such third party competently. Furthermore, Rizzo Farrugia shall not be responsible for the insolvency of the third party.
3. Discretionary Management
It is understood that under this service, 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 Section F of 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.
4. Disclosure of Client Information
The Client hereby accepts and agrees that local or international tax legislation may require Rizzo Farrugia to report to the tax authorities certain information about the Client’s holdings or the income derived therefrom. In the case of foreign securities, 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.
5. Representation at General Meetings
Rizzo Farrugia shall not be required to inform the Client of the dates of General Meetings of the company/companies in which the Client owns shares held by Rizzo Farrugia as nominee. Rizzo Farrugia will not be obliged to attend or vote at any meeting of the holders of any investments held by Rizzo Farrugia as nominee.
6.1. Trade confirmations and other advices relating to the Instruments held by Rizzo Farrugia on behalf of the Client 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.
6.2. 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% or more since the last reporting period. Where we hold your email address, such delivery and/or notification may be made via email.
7.1. In the event of termination of this Addendum for any reason whatsoever, the Client shall, without delay, give Rizzo Farrugia written notice of such termination and give Rizzo Farrugia disposal or transfer instructions relating to all the Instruments and/or any monies held by Rizzo Farrugia on the Client’s behalf.
7.2. Rizzo Farrugia shall have the right to dispose of the Instruments or part thereof itself or to retain proceeds from the disposal of the 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 Instruments.
Last updated 16.02.2018