Dated: 6 February 2023
1.1 These Terms of Business (the “Terms”) together with your completed and signed Client Questionnaire (the “Questionnaire”, collectively with the Terms referred to as “the Agreement”), enclosed in Annex 1 including Annex 2 to 4 and the Fee Schedule included in the Questionnaire shall govern the legal relationship between you (hereinafter, the “Client”) and Timberland Invest Ltd. (hereafter referred to as the “TIL”) in respect of the services TIL provides to the Client. The Agreement shall also include the offering documentation, agreements, and other official documentation (such as Key Information Documents) that are presented by TIL on the financial instrument offered in connection with the investment service.
1.2 The Client should read the Terms, and any document referred to herein very carefully. If there is anything that the Client does not understand the Client should discuss this matter with his/ her contact within TIL and seek the necessary clarification.
1.3 TIL’s registered office is at CF Business Centre, Gort Street, St Julians STJ 9023, Malta and may be contacted on +356-209081-00.
1.4 TIL shall communicate with the Client by telephone and electronic mail unless otherwise instructed by the Client. Documents sent by electronic mail (whether it will contain confidential information or not) in the email address specified by the Client in terms of this Agreement will not be encrypted unless specifically requested by the Client in writing.
1.5 TIL reserves the right to record, monitor or access any or all e-mails, calls or any other forms of communications sent to it.
1.6 Communication between Clients and TIL will be made in the English language, unless agreed otherwise by mutual agreement between both parties. In the event of discrepancy between the content of the Terms and any communication in a foreign language, these Terms, provided in English, will prevail.
1.7 The Terms cover the provision by TIL of the following services:
(each “a Service” and collectively referred to as “the Services”)
1.8 The Terms contain important information regarding the way in which TIL will provide the Services to the Client and the Client’s legal position.
1.9 TIL will provide the Client with a copy of these Terms and the most recent Questionnaire upon request.
2.1 The Client represents and warrants to TIL that:
2.2 By agreeing to these Terms, the Client is authorising TIL to deduct or withhold any sum, which TIL is required or liable to deduct or withhold under the law or practice of any revenue authority in any relevant jurisdiction.
2.3 The Client represents and warrants that he/she is in compliance with and shall comply at all times with any applicable law including tax and exchange control laws and regulations for which the Client is subject to. The Client further represents and warrants that any foreign currency which forms the subject of the Agreement is money which has lawfully been invested out of Malta and that any necessary authorisations in this respect have been obtained.
3.1 TIL is regulated by the Malta Financial Services Authority (the “MFSA”), whose offices are situated at Triq l-Imdina, Zone 1, Central Business District, Birkirkara, Malta, CBD 1010 Malta.
3.2 TIL is licensed by the MFSA under the Investment Services Act 1994 and holds a Class 2 Investment Services Licence. TIL provides investment services business in accordance with its licence and is licensed to hold clients’ monies and clients’ assets.
3.3 TIL will provide the Services in accordance with applicable laws, regulations, bye-laws, licence conditions, guidelines, exchange requirements, customs, usages and other provisions or market practices (the “Rules”) to which TIL may be subject from time to time.
3.4 If any conflict arises between the Terms and the Rules, the latter shall prevail.
3.5 TIL may provide other services (including Ancillary services) to Clients which are not regulated and do not require a licence by the MFSA and which are being provided in connection with TIL’s licensed activities.
3.6 TIL is also a member of the Malta Stock Exchange.
4.1 TIL shall categorise Clients into one of the following categories and as also defined in Annex 4 to this Agreement:
The level of protection offered and due to each Client depends on the category assigned to each Client. The Client’s categorisation will be identified in the Questionnaire and shall be advised to the Client prior to the provision of the Services. Where the Client is a person falling within the definition of ‘Professional Client’ or ‘Eligible Counterparty’ as defined in Annex 4, TIL shall inform it prior to any provision of Services that, on the basis of the information available to TIL, the Client is deemed to be a Professional Client or Eligible Counterparty (as applicable) and will be treated as such unless TIL and the Client agree otherwise. Should TIL re-categorise the Client, TIL will inform the Client accordingly.
4.2 The Client may also request (in writing) TIL to change the category in which he/she has been classified. If the Client requests to be treated as a Professional Client or Eligible Counterparty, the Client must prove to TIL that it qualifies as a Professional Client or Eligible Counterparty (as applicable) in accordance with applicable law and regulation. TIL reserves the right to accept or refuse any such request for change in classification. Before a re-categorisation, TIL shall inform the Client in writing on the consequences of this new classification.
4.3 The Client understands that its classification as a Retail Client will grant the Client the highest level of investor protection and transparency in terms of applicable law and regulation. The Client understands that a change to its classification may influence the level of protection afforded to it.
4.4 The Client agrees to advise TIL in writing of any material changes in the information provided to TIL which may affect Client categorisation.
5.1 Advisory Services
5.1.1 TIL shall, where applicable, provide investment advisory services to its Clients suitable to them to achieve their investment objectives. The provision of investment advice shall be subject to the terms of an investment advisory agreement entered into between TIL and the Client. The Client accepts and agrees that the investment advice shall be provided on a non-independent basis. This meaning that the analysis is restricted to a group of investment/financial instruments.
5.1.2 TIL shall inform the Client, in writing, of the following, before providing investment advice:
5.1.3 Before providing investment advice to the Client, TIL shall undertake an assessment of suitability as required by the Rules. To this end, the Client agrees to provide such information to TIL as it may require to determine the Client’s knowledge and experience in the investment field relevant to the specific type of financial instruments in respect of which investment advice is to be provided, the Client’s financial situation including his/her ability to bear losses, and his/her investment objectives including his/her risk tolerance so as to enable TIL to recommend to the Client the financial instruments that are suitable for him/her and, in particular, which are in accordance with his/her risk tolerance and ability to bear losses and his preference to environmental, social and governance investment preferences.
5.1.4 Specifically in respect of Clients categorised as retail clients, TIL shall provide to the Client in writing, before an investment transaction is undertaken, a statement setting out the investment advice, and how this meets the preferences, objectives and characteristics of the Client as well as any prejudice or disadvantage that may be suffered by the Client if the investment advice is followed, subject to the best knowledge of TIL at that time and subject to the information that the Client has given to TIL in the Questionnaire. TIL shall also provide details of any risks that may arise in connection with an investment in a particular financial instrument in respect of which investment advice is provided. The Client will be given sufficient time to read and understand the statement.
5.1.5 TIL will retain a record of all investment advice given to the specific clients.
5.2 Reception and Transmission of Orders
5.2.1 TIL shall, where applicable following the provision of advisory services as to the suitability of the investment, or on an execution only basis, as applicable, receive orders from the Client and transmit the orders to a third party for execution.
5.2.2 Where the service of reception and transmission of orders is not preceded by investment advice, TIL shall not make any assessment of the suitability of the investment for the Client. TIL shall be under no duty to monitor, review or advise the Client on any investment made. TIL shall however keep records of the transactions made and inform the Client in accordance with the Rules on the transaction executed on the Client’s behalf.
5.2.3 TIL shall provide the service of reception and transmission of orders following an assessment, where applicable, as to whether the product or service is appropriate to the Client subject to the best knowledge of TIL at that time and subject to the information that the Client has given to TIL in the Questionnaire. TIL shall perform a target market assessment prior to any transaction order placed by the client.
5.2.4 In order to be in a position to evaluate whether the product or service is appropriate, the Client agrees to provide TIL with information regarding his/ her knowledge and experience in relation to specific products or services.
5.2.5 TIL shall provide regular reports to the Client as set out in these Terms and in accordance with the Rules.
5.3 Placement of instruments without a firm commitment basis
5.3.1 TIL shall, where applicable, market newly issued securities or securities which are already in issue but not listed, to its Clients. In connection with this service and where the service is provided in conjunction with reception and transmission of order or execution of order TIL shall assess whether the financial instrument is appropriate to the Client.
5.4 Execution of Order
5.4.1 TIL shall, where applicable following the provision of advisory services as to the suitability of the investment, execute the order on behalf of the client.
5.4.2 Where the service of execution of order is not preceded by investment advice, TIL shall not make any assessment of the suitability of the investment for the Client. TIL shall be under no duty to monitor, review or advise the Client on any investment made. TIL shall however keep records of the transactions made and inform the Client in accordance with the Rules on the transaction executed on the Client’s behalf.
5.4.3 TIL shall provide the service of execution only following an assessment, where applicable, as to whether the product or service is appropriate to the Client subject to the best knowledge of TIL at that time and subject to the information that the Client has given to TIL in the Questionnaire. TIL shall perform a target market assessment prior to any transaction order placed by the client.
5.4.4 To be in a position to evaluate whether the product or service is appropriate, the Client agrees to provide TIL with information regarding his/ her knowledge and experience in relation to specific products or services.
5.4.5 TIL shall provide regular reports to the Client as set out in these Terms and in accordance with the Rules.
5.5 Nominee, Custodian and Trustee Services
5.5.1 TIL shall provide Nominee services in connection with the provision of Reception and Transmission of Order and Execution Services. This means that TIL shall be holding the clients’ financial instruments when orders are being transmitted ad/or executed to third parties.
5.5.2 TIL shall provide the service to the Client where requested. However, TIL may be holding the Client’s monies and assets in nominee in connection with the provision of reception and transmission or order or execution of order services without requesting specific permission from the Client. For this scope, the Client shall refer to Clients’ Monies and Assets Section in this Agreement.
5.6 Financial Instruments
5.6.1 The Company shall provide investment services as described above in relation to equity (common stock), bonds or units in collective investment schemes. The Client shall also refer to the offering documentation, agreements, and other documentation (such as Key Information Document) provided in connection with the financial instrument offered in connection with the investment service. Risk disclosures included in this Agreement is for information and the Client shall review the risk disclosures included in the offering documentation prior to proceeding with the investment in the financial instrument concerned.
Equity or Common Stock
5.6.2 Equity investment is money that is invested in a company by purchasing shares of that company in the stock market. These shares are typically traded on a stock exchange but equity can be acquired via private placement. Equity investors purchase shares of a company with the expectation that they will rise in value in the form of capital gains, and/or generate capital dividends. If an equity investment rises in value, the investor would receive the monetary difference if they sold their shares, or if the company’s assets are liquidated and all its obligations are met. Equities can strengthen a portfolio’s asset allocation by adding diversification. Equity represents the value that would be returned to a company’s shareholders if all the assets were liquidated, and all the company’s debts were paid off.
5.6.3 Equity is subject to market risk and the value of the investment in equity may fall as well as rise. Equity investors might not receive dividends or dividends received might be lower in value than expected or paid in previous years and the investors might not lose part and all of the original investment made in the company. Equity investors are exposed to the company’s financial and business performance. Also, any company restructuring may make the company less profitable, and companies may become bankrupt or insolvent. As mentioned above the company’s shareholders will receive their investment after all the company’s debts are paid off and are the last persons to be paid during insolvency proceedings.
Bonds (Corporate and Government)
5.6.4 Bonds are a tool for corporations or governments to raise money to finance projects or other investments which are expected to generate direct or indirect returns. These are specialised borrowing agreements that bind a borrower (Issuer) to give the lender (Investor) periodic streams of income. These are specialised borrowing arrangements that bind a borrower (the Issuer) to give the lender (Investor) periodic streams of income. Such agreement is in the form of a contract (Prospectus) which lays out in detail the promises made by the issuer as well as the rights of the investors (Bondholders). These are known as Indentures.
5.6.5 There are different type Bond which may fall as either as complex or non-complex. Hereunder are few examples of bonds:
The Banking Recovery Resolution Directive (“BRRD”) came into force on 2 July 2014 and its main provisions were applicable with effect from 1 January 2015. It was introduced as a clear and comprehensive bank recovery and resolution regime that covers both national and cross-border bank failures within the European Union (“EU”). The BRRD provides national financial authorities with a set of measures and powers which may be used when banks within the EU are judged to be failing or likely to fail. These measures and powers are referred to a ‘resolution’ and are intended to ensure the continuity of the bank’s critical functions, reservation of financial stability and restoration of the viability of all or part of that institution, while the remaining parts are put into normal insolvency proceedings. These powers include the authority to sell or merge the bank’s business with another bank, to separate good assets from bad ones and to convert the debt of failing banks to shares or write down the amount owed (bail-in). In addition, bank capital instruments must be written down or converted when the relevant authority determines that the bank is no longer viable. Thus, if a resolution had to be triggered, losses are first absorbed by the bank’s tier 1 capital (that is, share capital and retained earnings). Where tier 1 capital is not sufficient to absorb all losses, debt obligations of the bank, not otherwise secured by sufficient collateral, may be written down or converted into share capital to make up for the shortfall. Consequently, the principal and interest due on such unsecured EU bank debt instruments may be fully or partially written down or converted into shares to make up for any shortfall. The BRRD may have negative implications for investors since the resolution may potentially affect any financial instrument issued by an EU banking institution which is not secured or which is subject to specific protections under the BRRD. Consequently, investors could face full write-down or partial loss of their investment in a resolution as they will not be able to rely on expectations of ‘bail-outs’ in the event of bank failure. The extent of losses borne by an investor also depends on the amount of capital or debt instruments ranking junior or equal to the debt instrument in which they have invested.
In respect of any current holding, or ahead of any potential investment, in a financial instrument issued by an EU Financial Institution and therefore subject to the BRRD, the Client should particularly note that:
a) an unsecured EU bank debt security is subject to the resolution regime referred to in the BRRD;
b) the impact on investors, in a resolution scenario, depends on the ranking of the liability in the resolution creditor hierarchy, which may have changed due to the introduction of depositor preference;
c) in the event of resolution:
i. the outstanding amount of the BRRD bond may be reduced to zero or the security may be converted into ordinary shares or other instruments of ownership for the purpose of stabilisation and loss absorption;
ii. a transfer of assets to a bridge bank or in a sale of business may limit the capacity of the firm to meet repayment obligations;
iii. the maturity of instruments or the interest rate under these BRRD bonds can be altered and the payments may be suspended for a certain period;
d) the liquidity of the secondary market in any unsecured bank debt instruments, including BRRD bonds, may be sensitive to changes in financial markets;
e) existing liquidity arrangements (for example, re-purchase agreements by the issuer) might not protect you from having to sell these instruments at substantial discount below their principal amount, in case of financial distress of the issuing bank;
f) liability holders have a right to compensation if the treatment they receive in resolution is less favourable than the treatment they would have received under normal insolvency proceedings. This assessment must be based on an independent valuation of the firm. Compensation payments, if any, may be considerably later than contractual payment dates (in the same way that there may be a delay in recovering value in the event of an insolvency).
Like any financial instruments, bonds are generally not guaranteed, and the investment may go as well as down and the Client may lose part or all of the original investment made.
5.6.6 Bonds are usually calculated in units of 100 or 1000 known as the Face Value. This does not necessarily mean that the investor will pay 100 for each bond invested. The investor may pay a higher (Premium) or lower (Discount) price. The life of the bond would be pre-specified in the indentures. The investor would know when the (Principal) face value amount placed with the borrower will be repaid. The specified date is known as the Maturity Date. Bonds generally pay cash flows on pre-specified dates. When an investor invests at face value, the actual return on investment would be equal to the pre-determined interest rate (Coupon).
5.6.7 When an investor invests at a premium or at a discount, the actual return on investment will be lower or higher, respectively. This is known as the Yield to maturity and is usually calculated on an annual basis. The Yield to Maturity depends mainly on the interest rate expectations of other investors as well as interest rate decisions by Central Banks.
5.6.8 Bonds are subject to various risks which need to be considered before investing. Original amounts are not always guaranteed. One of the main risks when investing in a bond is the risk that the issuer fails (Defaults) to meeting their obligation of timely interest or principal payments. This is known as Credit Risk. To manage such risk, an investor can monitor the borrower personally or else s/he can analyse this risk through Credit Ratings, issued by rating agencies. Credit Ratings reflect the creditworthiness, or the associated risk assigned to the issuer. A credit rating reflects the likelihood that the borrower will meet her/his obligations on time and in full, without defaulting which could translated into a high credit rating.
5.6.9 Secured bonds are generally those backed by the company’s assets known as Collateral. In case of a default, the investor has a legal claim against these assets to recoup her/his or her investment. Debit not pledged by collateral is unsecured. Sovereign bonds are generally unsecured and backed by the ‘creditworthiness’ of the issuer (government). Around a quarter of corporate debt in Malta is secured.
5.6.10 An investor can decide to sell a bond to another investor at an agreed price prior to it’s maturity date. This transaction takes place on the Secondary Market. The price at which the bond is bought and sold is determined by demand and supply on the market. Hence these can be sold for more or less than initially purchased. The local Secondary Market is maintained by the Malta Stock Exchange. If a secondary market for a bond is made up of a few buyers and sellers, we would refer to that market as being illiquid (Liquidity Risk). Liquidity risk is the risk that a market participant is unable to find an adequate counterparty to sell a position. Illiquidity can have an impact on the return from an investment and therefore, liquidity risk should be considered prior to purchasing the security especially if the investor does not plan to hold it to maturity. In the local market Sovereign Bonds tend to be more liquidity as the Central Bank of Malta act as a liquidity provider.
5.6.11 Bonds are subject to interest rate risk meaning that as market interest rates start to increase the price of outstanding bonds start to decline. The negative relationship also holds when interest rates fall.
5.7 Collective Investment Schemes (known also as Mutual Funds or Funds)
5.7.1 A Collective Investment Scheme (CIS) is a company or an entity that pools money from many investors and invests the money in financial instruments such as stocks/equity, bonds, and short-term debt, derivatives, or other collective investment schemes. Collective Investment Scheme may also invest directly in immovable property or other types of property such as works of art. The more complex and risk is the underlying investment by the CIS, the riskier is the CIS itself. This also means that not all CIS are suitable for everyone.
5.7.2 There are different types of CIS which include UCITS and retail CIS which are usually available to retail clients; professional investor funds which are a niche type of CISs and which are available for professional and eligible investors; and alternative investor funds which are generally hedge funds and some might also be promoted to retail investors due to the investment strategy, albeit requiring a suitability or appropriateness assessment before these are offered to the Client. CIS maybe listed on a regulated market and CIS can be open or closed ended funds. The latter means that exiting the CIS is subject to certain conditions and can be done at certain times and conditions as described in the offering document.
5.7.3 The main advantage of CIS is that it provides an opportunity for diversification, but CIS are subject to fees, provide less control over the timing of recognition of gains, less predictable income, and no opportunity to customise. In many parts of the world, CIS are regulated and depending on the jurisdiction concerned there are requirements for the type of information and frequency for the publishing information. CISs have an offering memorandum which describes (amongst other things) the investment strategy, the financial instruments and/or assets that the CIS will invest in, the type of entity (SICAV or ICAV), the methodology for the calculation of NAV and the NAV publishing frequency, dealing procedures, and the name of persons and officers involved in the management, administration, and compliance oversight of the CIS. The Client shall read and review the content of the offering documentation and other official documentation provided by the CIS or the management of the CIS.
5.7.4 CIS are subject to various risks factors which are generally shaped by the investment strategy and the nature of investments made by the CIS. The risks generally faced by CIS are market risk, settlement risk, counterparty risk, regulatory risks, foreign currency/FX risks and country risk. The risks are described in the offering documentation and the Client shall review the CIS official documentation prior to proceeding with the investment. Like any financial instrument, investments in CIS may go up as well as down.
6.1 Appropriateness Test
6.1.1 The Client agrees and accepts that TIL shall gather information on the Client based on the service that will be provided and as described in this Agreement. The Client acknowledges that the provision of this information is for the Company to act in the Client’s best interest and to provide appropriate investment services and/or suitable investment advice, where and as applicable. In this regard, the Client accepts and agrees to furnish and provide TIL with up-to-date, accurate and complete information.
6.1.2 When providing investment services other than investment advice, TIL shall, unless specific exemptions apply in terms of applicable law and regulation, conduct an appropriateness test. Based on the information provided by the Client, TIL shall determine whether the product or service requested by the Client is appropriate. Where the product or service requested by the Client is deemed inappropriate, TIL shall issue a warning to the Client. Such warning shall be issued in writing.
6.1.3 TIL may provide the services of reception and transmission of orders without the need to conduct an appropriateness assessment where the transaction is deemed to be at the Client’s initiative, provided that the request is in relation to a non-complex instrument, and the Client has been notified that TIL is not required to assess the appropriateness of the financial instrument, and furthermore, provided that TIL confirms to the Client that it complies with the obligations concerning conflicts of interest. In view of that the Company is not required to conduct such an appropriateness assessment, the client shall not benefit from the relevant protection laid down in applicable Rules.
6.1.4 If based on the information provided by the Client, TIL believes it has insufficient information to assess the appropriateness of the product / service for the Client, TIL shall inform the Client that TIL is not in a position to assess appropriateness.
6.1.5 Where the Client is a Group of Individuals (or Joint Account), the Company shall base its appropriateness test account on the person who has been appointed to act on behalf of the Group. Where this is the case, the Client shall assume the responsibility of the actions of the person appointed on its behalf or on behalf of the Group. Where no person has been appointed the Company shall base its appropriateness assessment on the persons with the least knowledge and experience on the financial instrument where investment service is being provided.
6.1.6 In case of corporate or legal person TIL shall undertake appropriateness test on the individual/s appointed by the Client’s directors to represent them in their dealings with the Company. The Client shall agree and accept that the individuals appointed are knowledgeable and experienced prior to be nominated/proposed to TIL and shall be held responsible for the actions of the individual appointed. The Client shall immediately notify TIL where the individual/s appointed is/are no longer accepted or have been removed by the Client’s Directors. Where more than one individual has been appointed by the Client, TIL shall base its appropriateness test on that individual that has the least knowledge and experience on the financial instruments.
6.2 Suitability Test
6.2.1 When providing advisory services, TIL shall conduct a suitability test. TIL needs to establish that the product / service requested: (a) meets the objectives of the Client; (b) is such that the Client is able to financially bear any related investment risks consistent with his / her investment objectives including the Client’s Environmental, Social & Governance (ESG) investment preferences; and (c) is such that the Client has the necessary experience and knowledge to understand the risks involved.
6.2.2 In case where TIL is providing investment advice to a professional client (per se) or Eligible Counterparty, TIL shall be entitled to assume that such Client is able financially to bear any related investment risks, possesses knowledge and experience on the financial instruments that will be dealt by TIL on behalf of the Company.
6.2.3 In case of elective professional clients, TIL will establish the financial situation and investment objective Client’s ESG investment preferences. In such case TIL shall assume that the Client has the knowledge and experience in the financial instruments TIL will be dealing in on behalf of the Client.
6.2.4 In order to be in a position to evaluate such suitability, the Client agrees to provide TIL with information regarding his/her investment objectives, financial situation in relation to specific investment services and products in line with the Client’s classification assigned.
6.2.5 If TIL determines that, from the information provided by the Client, it does not possess sufficient information to be able to provide the relevant service to such Client, TIL shall refrain from providing such service.
6.2.6 When providing advisory services to Clients that have been categorised as Retail Clients, TIL shall provide the client a suitability statement (“Statement”), before the transaction in financial instruments is executed, and periodically where this is recommended by TIL in the light of the financial instruments and Services offered to the Client. The Statement shall (i) include details relative to the financial demands and needs of the client, (ii) set out the investment advice, (iii) explain why TIL believes that the investment advice provided meets the Client’s investment objectives, personal circumstances and is in line with the Client’s knowledge and experience.
6.2.7 Where the Client is a Group of Individuals TIL shall assess the financial situation and investment objectives (including ESG preferences) of all the persons within the Group, basing the final assessment on the individual that has the least financial assets available and/or is the most risk averse. TIL shall assess the knowledge and experience on the financial instruments of the individual/s that has/have been appointed by the Client to act on behalf of the Group. Where this is the case, the Client shall assume the responsibility of the actions of the person appointed on its behalf. Where no person has been appointed the Company shall base its appropriateness assessment on the persons with the least knowledge and experience on the financial instrument where investment advice is being provided.
6.2.8 In case of corporate or legal person TIL shall assess the financial situation of the Company and the investment objective as determined by the Client’s Board of Directors. TIL shall assess the knowledge and experience on the individual/s appointed by the Board of Directors to act on behalf of the Corporate Client. The Client shall agree and accept that the individuals appointed are knowledgeable and experienced prior to be nominated/proposed to TIL and shall be held responsible for the actions of the individual appointed. The Client shall immediately notify TIL where the individual/s appointed is/are no longer accepted or have been removed by the Client’s Directors. Where more than one individual has been appointed by the Client, TIL shall base its appropriateness test on that individual who has the least knowledge and experience on the financial instruments.
7.1 Both the Client and TIL acknowledge that an investment transaction facilitated by TIL is not deemed to be a loan. Also the Client agrees and accepts that monies shall be send in advance to the Company’s clients’ monies account and all the Client’s funds must be cleared before acceptance and execution of a Clients’ order.
7.2 The Client agrees and accepts that that TIL may, at its discretion, record any telephone communications between the Client and TIL. Trade instructions may be undertaken via email or over the telephone. Transactions, orders, or queries undertaken through the telephone will be affected in a prompt and timely fashion and to the extent possible, in the order in which they were received.
7.3 The Client understands that the telephone orders are recorded and once the order is confirmed to TIL via the Company’s telephone recording system, the order shall be deemed as final by TIL. The Client can request his/her recordings by sending an email to [email protected]. TIL shall provide the recording within 2 business days where the trade has been affected and recorded within fifteen (15) days from the Client’s request. The Client acknowledges that trade recordings shall be kept by TIL for a period of five (5) years.
7.4 TIL shall send the Client the contract note/s or confirmation in respect of each trade effected on behalf of the Client. The Client agrees to review each contract note or confirmation received and to notify TIL of any errors, omissions, or objections within fifteen (15) days from the date of the contract note or confirmation. Following the lapse of fifteen (15) days from the date of the contract note or confirmation TIL shall treat any entries or balances therein as final, conclusive, and binding.
7.5 The Client agrees that payments made for any transactions executed by TIL are to be settled within the period stipulated in the contract note or relevant documentation. Any failure to meet these obligations within the allowed time frame shall not to be borne as a liability by TIL. TIL bears the right to immediately dispose of any unpaid investments, of which any differences emanating from this disposal, are to be made good by the Client.
7.6 The Client has the right to inspect the documentation containing his personal data and details around transaction requests, including contract notes, vouchers and entries in TIL’s books or computerised records relating to his / her transactions. These records are retained at least for the duration of the business relationship except for trade recordings which are kept by TIL for five (5) to seven (7) years. TIL may retain such documents / information after the termination of the business relationship for such period as may be allowed or required in terms of applicable law or regulation.
7.7 TIL may combine the Client’s order(s) with order(s) of other Client(s) provided that such aggregation does not operate to the disadvantage of the Client and for which TIL shall not proceed with the aggregation.
7.8 TIL shall not incur any liability whatsoever by reason of acting on any such client instructions or for any error in such client’s instructions and the Client shall indemnify and hold harmless TIL from any loss, cost, damage or expense it may suffer or incur by relying on such client instructions, whether received by letter, telephone, facsimile or other electronic transmission (including electronic mail) or in such other manner as TIL may determine from time to time, and which TIL, in its absolute discretion, has reason to believe to be genuine.
8.1 Subject to the applicable laws and save where otherwise indicated in these Terms, TIL shall not be liable to the Client for any loss or damage incurred in connection with the subject matter of these Terms howsoever caused unless the TIL’s conduct constituted fraud, wilful misconduct or gross negligence on its part or on the part of its agents, including the unjustifiable failure to perform in whole or in part its obligations (the “TIL’s Wrongful Acts”).
8.2 When providing the service of reception and transmission of orders, the Client understands that TIL will transfer the order received from the Client to a third party for execution. TIL shall provide the service of reception and transmission of orders in accordance with the instructions received from the Client and in terms of applicable Rules, including TIL’s best execution policy. No liability shall attach to TIL resulting from the execution of the order by a third party, to the extent that TIL did not act with gross negligence, with wilful default or fraud in the transmission of the order to third parties for execution, and to the extent that TIL acted in accordance with instructions received from the Client and in accordance with the Rules and its best execution policy.
8.3 When providing the services of execution of an order on a regulated market, the Client understands and accepts that the final execution depends on the regulated market where the order has been placed as described in the Execution of Order Policy. TIL does not accept responsibilities in case of faults by the regulated market and where the systems provided by the regulated market are not operating well and/or as they should be. TIL shall commit to advise the Client where the execution of an order cannot be processed where such situation is encountered.
8.4 The Client undertakes to hold harmless and indemnify TIL against all actions, proceedings, claims, costs, demands and expenses (including all reasonable legal, professional and other expenses) incurred by TIL in relation to such actions, proceedings, claims, costs and demands which may be brought against or suffered or incurred by TIL by reason of its performance of its functions or services under these terms unless due to or caused by TIL’s Wrongful Acts.
8.5 Operational disruption: TIL shall not be liable for any damages resulting from force majeure events related damages, over which TIL has no control.
8.6 No right of set-off shall apply in favour of the Client, except in the event of a res judicata or in event of settlement of claims being reached between parties in terms of law.
9.1 TIL takes all client complaints seriously and makes a concerted effort to respond to and resolve them in a timely manner. Clients shall raise complaints by visiting our offices or write to the attention of “The Compliance Officer, Timberland Invest Ltd., CF Business Centre, Gort Street, St Julians STJ 9023, Malta”. The Compliance Officer of TIL shall deal with Client’s complaints reasonably and promptly and in accordance with TIL’s internal complaint handling procedures. If you have a complaint, you may notify us in writing via mail or e-mail at [email protected]. For further information, you need to refer to the Complaints Procedure section which is available on https://www.timberland-malta.com.
9.2 The Client understands that using email to notify TIL of a complaint is the most efficient method for TIL’s compliance department to respond. Where the Client is dissatisfied with TIL’s Services, the Client shall notify our Compliance Officer.
9.3 TIL will make every effort to resolve the matter in the most expedient manner. The Compliance Officer will acknowledge the receipt of your complaint in writing within 48 hours and will inform the Client how it intends to respond to the complaint. If the Client’s complaint was conveyed by phone or via social media, the Client accepts that TIL will try on a best-efforts basis to acknowledge the receipt of and TIL’s understanding of the Client’s concerns in writing, thereby to confirm and/or correct TIL’s acknowledgment should it be required.
9.4 TIL will provide a response by no later than 15 working days. Where TIL is not able to provide a response within the above period TIL shall inform the Client in advance and provide the reasons relating to the day and when the Client expects to receive a response. However, the Clients acknowledges and accepts that it is his/her responsibility to notify TIL in writing of all complaints.
9.5 Where TIL’s proposed resolution of the Client’s complaint is not satisfactory, and/or where TIL has not addressed the complaint properly, the Client acknowledges that he/she may lodge an official complaint in writing with The Office of the Arbiter for Financial Services at the following address:
The Office of the Arbiter for Financial Services
Notre Dame Ditch,
Il-Floriana,
Malta
https://www.financialarbiter.org.mt
10.1 Changes involving names, addresses or powers of representation that have been provided to TIL by the Client
To ensure that business transactions are handled properly, the Client must promptly notify TIL of any changes in name, address and the expiry or modification of a power of representation (especially a power of attorney including changes in the shareholding in case of corporate clients) that has been provided to TIL. This obligation to notify TIL remains in force in situations in which the power of representation, as well as its expiry or modification, has been registered in a public register.
10.2 Clarity of instructions and order
All instructions and orders sent by the Client to TIL must be clear and, in respect of the services of reception and transmission or orders, through the filling of an application form with the original signature of the client. Instructions or orders that have not been formulated clearly can lead to delays. In issuing an order to TIL for transmission to third parties for execution, the Client must, in particular, pay close attention to the correctness and completeness of the name of the payment recipient, the declared account number, the declared TIL guide number or IBAN number and the stated task-related currency. Modifications, confirmations, or repetitions of orders must be marked as such.
10.3 Special instructions for situations in which an instruction or order is to be completed urgently
If the Client believes that a task needs to be carried out in an urgent manner, the Client must separately notify TIL to that effect. For orders submitted on a printed form, this instruction must be given to TIL via e-mail or telephone communication
10.4 Review of correspondence from TIL
The Client shall promptly check whether order confirmations, commercial paper invoices, securities account lists, profit declarations, invoices and other notifications regarding the Services are accurate and complete; the Client must promptly raise any potential objection and in any case not later than fifteen (15) days from the receipt of the relative documents.
10.5 Notifying TIL in case of non-receipt of communications
All reports, statements, and communications due to the Client shall be sent by TIL to the e-mail and / or postal address provided by the Client to TIL. If the Client does not receive reports, statements, or other communication he must promptly notify TIL to that effect.
10.6 Notifying the Client’s respective authorised representative about the recording of telephone conversations
If TIL is engaged in a legal dispute with a Client, the Client must inform the authorised agent aware of the fact that TIL has the right to record telephone conversations.
11.1 TIL is legally obliged to keep records of face-to-face communication, to keep recordings of phone conversations as well as electronic communication (e.g. email, chat, video conferencing or messenger service) in connection with initiation/acceptance, transmission and execution of Client orders in writing or on sound and data carriers, as applicable, and to store these recordings. This applies regardless of whether these are conducted via the business or private phones of employees. Orders placed by Clients during face to face meetings held with TIL, shall be recorded using written minutes or notes. The Client understands and agrees that such orders are equivalent to orders received by telephone.
11.2 A copy of the recordings concerning these conversations and communication with the Clients shall be available on request for a period of five (5) years or – if requested by the MFSA – for a period of seven (7) years. The Client is therefore hereby informed that that all conversations will be recorded and the Client hereby grants his general consent to such recording of conversations.
11.3 TIL is also entitled, but not obliged under the law, to record conversations, in writing or on sound and data carriers in connection with implementation of the client relationship, which do not have any reference to the Services, and to store these recordings. This includes phone conversations about complaints in particular. Recording shall take place for verification purposes.
11.4 The recordings can be read or listened to by employees of TIL. TIL is entitled, but not obliged, to take minutes of the recordings. The recordings can be used for evidence purposes in any legal disputes. When granting proxy, the Client shall inform authorised representatives that conversations can be recorded.
11.5 The Client agrees and undertakes to utilize the phone-, fax- and/or email addresses and postal addresses provided to the Client for the purpose of processes of instructions relating to the Services. The Client understands that any instruction received from the client using different communication channels to those provided by TIL may not be processed.
12.1 TIL shall hold segregated clients’ monies and assets accounts with reputable banks in Malta and/or EEA. Such clients’ monies accounts and assets are segregated from TIL’s own funds and are not carried our balance sheet as an asset.
12.2 The Clients acknowledges and accepts that where the Clients sends an order or an instruction to the Company or an order is executed in connection with investment advice, the value of the transaction shall be taken from the Client’s monies account to the Company’s Omnibus account for execution on the market. In case of reception and transmission of order (also in connection with investment advice) the relative value or monies and/or assets shall be transferred to third parties. In all the above cases the Client acknowledges that the value relating to the execution of order including transmission of order to third parties, client’s monies and assets shall not be protected under the Segregations of Clients’ Monies and Assets Regulations in Malta.
12.3 TIL undertake its endeavours and take the necessary precautions to ensure that third parties with whom orders are being transmitted and monies and assets are of good standing and licensed in reputable jurisdictions. That said, the Client acknowledges that third parties may not have similar segregation of assets and monies and might be subject to failures or closure which could compromise the assets and monies held.
13.1 TIL shall provide to the Client, in writing, as soon as possible after the execution of the order by a third party – and no later than the first business day following the execution of the order by a third party of from receipt by TIL from a third party of confirmation of the execution of that order – a notice confirming the execution of an order and containing essential information in relation to that order.
13.2 The Client agrees to promptly examine all statements and valuations received from TIL and each entry and balance recorded therein and to notify TIL of any errors, omissions or objections to any entries and balances in such statements or valuations, within thirty (30) days from each statement or valuation date (as the case may be), failing which TIL shall be entitled to treat such statements and valuations and any entries and balances therein as final, conclusive and binding.
14.1 TIL has a Conflicts of Interest Policy which sets out the effective organisational and administrative arrangements that have been put in place to identify, prevent or manage and monitor conflicts of interest that entail a material potential risk of damage to the interests of TIL and its Clients. TIL takes all appropriate steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of TIL and its Client.
14.2 It is understood that TIL or any director, officer, employee or tied agent thereof may have an interest, relationship or arrangement that is material in relation to any trade effected on behalf of the Client. The Company declares that it has in place adequate internal procedures to ensure that the Client is in all cases treated fairly and that risks of damage to client interests will be prevented.
14.3 TIL undertakes to bring to the Client’s attention any conflicts of interest which may arise with regards to products promoted by TIL or the services provided by its related companies. In the provision of its services, TIL will seek to ensure that it always acts in the Client’s best interests.
14.4 TIL shall take the appropriate organizational and administrative measures to avoid conflicts of interest. When such measures are insufficient to exclude the occurrence of possible conflicts of interest, TIL must, as a last resort, inform the Client of the general nature and / or sources of the conflict of interest and the steps taken to mitigate at risk to the Client before providing any services to the Client.
14.5 A summary of TIL’s Conflicts of Interest Policy is enclosed as Annex 2 to these Terms. TIL’s Conflict of Interest Policy can be obtained from the TIL upon demand by agreeing to these Terms, the Client consents to the Conflicts of Interest Policy of TIL.
14.6 The Client accepts that TIL has conflicts of interests where investment services are being provided with respect to securities issued by entities or companies related to TIL including securities issued by E-Stream Energy GmbH Co KG. In such situations, the Company´s opinion or statements are not independent or impartial. In addition, TIL shall not provide investment advice in connection with the above investments.
15.1 TIL is subject to the Prevention of Money Laundering and Counter Funding of Terrorism laws and regulations in force in Malta.
15.2 TIL shall undertake anti-money laundering and counter funding of terrorism checks on the Client in accordance with applicable law, and the Client is required to produce satisfactory evidence of identity and the source of wealth and source of funds to be invested.
15.3 The Client represents and warrants that the monies and investments which form the subject of the Agreement and any future additions thereto have not originated and will not originate from activities or transactions which are a criminal offence in terms of applicable law, or which, if carried out, would constitute such an offence, or comprise property the receipt ownership or control of which would be such an offence.
15.4 TIL shall not accept any cash (liquid cash) for the purchase of financial instruments.
15.5 Where TIL has a suspicion that the Client has violated the money laundering act the Client acknowledges and accepts that TIL could be required to freeze the monies and assets held with TIL.
15.6 The Client also confirms and shall notify TIL where he/she is resident and/or his assets and monies have originated from FATF black-listed jurisdictions.
16.1 The Client acknowledges and accepts that TIL shall comply with EU and UN Sanctions as required National Interest (Enabling Powers) Act. Due to exposures and dealings with other currencies TIL may be subject to other sanction requirements such as OFAC and UK Sanctions. In case of any sanction hits, the Client accepts and acknowledges that TIL shall freeze the assets and monies pertaining to the Client.
17.1 Investment Risks
17.1.1 The price of all investments can go up as well as down and an investor may not get back the amount invested and selling an investment in an inopportune moment may result in a loss.
17.1.2 Past performance is not indicative of future performance. Investment markets are volatile in nature, and it is important that any investment is viewed as long term in nature.
17.2 Currency Risk
17.2.1 An investment may have a base currency other than the Clients’ base currency and thus carries with it an element of currency risk which can affect the value of any investment and the income generated therefrom, positively, or negatively, including interest or dividend payments. In addition, upon the sale or maturity of the Client’s investment, the realisable value might be less than the initial outlay when exchanged in the Clients’ domestic currency.
17.3 Credit Risk
17.3.1 An issuer of a debt instrument such as a bond or other debt instrument may be unable to meet interest and/or principal payments in the future and consequently default on its principal or interest repayments. The longer the term to repayment of principal (maturity), the greater the credit risk.
17.4 Interest Rate Risk
17.4.1 The market value of a bond or other debt instrument may go up or down as a result of a variation in interest rates.
17.5 Other risks
17.5.1 Investments in certain assets may be subject to specific risks which may or may not affect a particular investment. These risks may include Liquidity risk, Country risk, Political risk and Counterparty risk. The exposure to these risks may change over the course of the investment period, and may affect the value of the Client’s investment.
17.5.2 The Client acknowledges that the risks involved and related to an investment are various and the risks referred to in the Terms constitute a non- exhaustive list.
18.1 TIL is a participant of the Investor Compensation Scheme (the Scheme) in Malta.
18.2 Where TIL, fails or defaults and a claim is accepted by the Scheme, the Client acknowledges payment of 90% of the net loss subject to a maximum of Eur20K. For further information the Client shall refer to www.compensationschemes.org.mt.
19.1 The Client agrees to pay TIL, on demand, its applicable commissions and other fees due in respect of the provision by TIL of any of the Services. TIL undertakes that all commissions and other fees payable to / charged by TIL shall be provided to the Client by means of a durable medium. The Client shall have the option of receiving such information in paper format or on any another durable medium including a USB data stick (“other durable medium”). Information on charges shall also be available on TIL’s website.
The Client is hereby expressly informed about his right to request that TIL undertakes to provide details of costs, commissions and other fees payable to / charged by.
The Client is hereby informed and acknowledges that the following details may be found on the website set out below:
or any other website(s) which shall be notified by TIL to the Client from time to time.
The Client hereby confirms that he has a regular access to the internet by providing TIL with an email address. The Client undertakes to inform TIL in writing of any changes to his email address or if he is unable to access the internet.
Where the amount of fees, cost or changes cannot be ascertained, the method of calculating that amount will be clearly disclosed prior to providing the Service. TIL shall, in so far as practicable, notify the Client of any proposed changes in commissions and other fees in good time.
19.2 The Client also agrees to pay TIL, on demand, in addition to its commissions and/or fees, any duty, VAT or other tax whatsoever arising in respect of any of the Services provided. TIL shall not be required to give the Client prior notice of the imposition of, or variation in, any duty, VAT or other tax arising in respect of any of the Services.
20.1 TIL shall respect and protect the confidentiality of all information concerning the Client and shall process personal data in line with its TIL Data Protection Form supplied separately to the Client and in accordance with applicable data protection legislation.
20.2 TIL maintains strict information security policies designed to prevent unauthorised access to the Client’s information. However, the Client’s personal information may be shared with third parties in the course of providing a Service to the Client or as may be required under applicable law as set out in the TIL Data Protection Form (Privacy Policy).
20.3 The Client shall have certain rights pertaining to his/her personal data. These rights and how the Client can avail himself/herself of such rights are explained in the TIL Data Protection Form.
21.1 The Client agrees to receive marketing material related to financial products, financial services and other services offered by TIL.
21.2 Any processing of personal data that takes place in connection with such marketing communications will be based on our legitimate interest to carry out direct marketing.
21.3 The Client’s has a right to request TIL to stop sending any marketing material by informing TIL in writing.
22.1 TIL may amend any provision of the Terms provided that any material changes shall be notified to the Client in good time.
22.2 The Agreement may be terminated at any time by either party with immediate effect upon giving written notice to the other.
22.3 The termination of the Agreement shall be without prejudice to any other rights or remedies TIL may be entitled to hereunder or at law and shall not affect the coming into or the continuance in force of any provision of the Agreement which is expressly or by implication to come into effect or to continue in effect after such termination.
22.4 At the termination of the Client agreement, TIL shall return client’s monies and assets that are being held with TIL.TIL reserves the right to set-off any fees that are due in terms of the Fee Schedule.
These Terms shall be governed by and construed in accordance with Maltese law and the parties hereto agree to submit to the non-exclusive jurisdiction of the Maltese courts.
Client Questionnaire
Distributed in conjunction with the Terms of Business.
Summary of the Conflict of Interest Policy
Scope
Timberland Invest Limited (TIL) faces actual, potential and perceived conflicts of interests during the normal course of its business. This document serves to provide a summary of TIL’s COI Policy, which applies to retail and professional clients alike.
This policy applies to all of TIL’s employees.
Introduction
Through the MIFID II framework, TIL is required to maintain and to operate effective organizational and administrative arrangements with a view to taking all reasonable steps designed to prevent conflicts of interest that can adversely affect the interest of its clients as part of its commitment to protect the best interests of its clients.
Conflicts may arise in the following situations:
Under this policy, TIL employees are required to consider any situation, actual, perceived or potential, wherein their activities with clients and third parties, may present conflicts of interests.
Requirements
TIL must take all effective steps to identify, escalate, manage and prevent conflicts between itself (including affiliated members, clients, third parties, agents and any other person directly or indirectly to itself) and its clients, and between one client and another, which may arise during the provision services to its clients.
TIL employees are bound by this policy and to identify, manage, prevent and escalate any identified conflicts during their course of the business. This process is also to be applied around anti-bribery, personal dealing and market abuse, information barriers and any other requirements emanating from the applicable laws and regulations.
Conflict identification, escalation and Management
TIL employees are responsible for taking immediate action upon the identification of potential or actual conflicts of interests in the course of their duties. In particular, conflicts of interests could arise during new product approvals, product development, new incentive programmes, specific incentives for specific clients, distribution strategy and any other day to day business interactions with clients, agents, manufacturer of bonds and third parties. TIL holds in place an escalation process to determine the risks attached to actual or potential conflicts, the mitigation action needed, the control environment, the determination of residual risk and the residual impact on the clients.
Mitigation of identified conflicts of interest
TIL has in place a conflict of interest register which documents all the identified circumstances which constitute or may give rise to a conflict of interest entailing a risk of damage to the interest of one or more clients, the controls and actions to mitigate such risks. The residual risk is then analysed after all the sufficient steps have been taken to manage and prevent such risks. This register is a live document and is overseen by the Compliance Officer of TIL who is required to identify any conflict of interest and to report directly to the Board of Directors of the Company prior to any entries in the register and any decisions in relation to conflicts of interest.
Where all such steps do not ensure with reasonable confidence that the risks of damage to the interests of the clients will be prevented, as a last resort, TIL is obliged to disclose such conflicts of interests. Such disclosure will be provided within the Client Fact Find Sheet, to enable the clients take an informed decision. Such disclosures, as per MIFID II, also includes the organizational and administrative arrangements that TIL has implemented to manage and prevent the occurrence or impact of such conflicts of interest. The disclosure shall provide the client with general information on the source of conflict and the measures undertaken with regards to such conflicts of interest to enable the client to make an informed decision with respect to the investment service and products to which the conflict of interest has been identified. In cases where the risk to the client cannot be sufficiently mitigated, despite the operational and administrative arrangements in place together with disclosures, TIL will decline the provision of service in relation to the client or circumstance in which the conflict of interest has been identified.
Governance around conflicts of interest
The responsibility for identification, management and control of conflict of interests lies with every employees within TIL. The TIL board of directors is responsible for defining and overseeing the implementation of the governance arrangements to ensure an effective control environment and the necessary information barriers and segregation of duties, amongst others, are reviewed on at least an annual basis. The Board of Directors must also ensure that all employees are aware of this policy and that such policy is embedded in the daily business of all employees whilst ensuring that TIL encourages immediate escalation of risks and identification of weaknesses within the current governance structure as part of its efforts in pursuing the best interest of the clients.
Further disclosures to the customers
TIL is required to disclose a summary of its conflict of interest policy to its clients and to provide the Conflict of Interest Policy to its clients upon request in a durable medium, as per MIFID II definition.
Introduction
Timberland Invest Ltd. (TIL) is a regulated entity by the MFSA authorized under the Investment Services Act of 1994 to receive and transmit orders of clients in relation to financial instruments. TIL receives and transmits orders from clients in relation to bonds issued by Timberland Securities Investment PLC and E-Stream Energy GMBH & Co KG (the “Issuers”), which are the issuers of securities offered to the public in terms of the Prospectus Directive 2003/71/EC and by the Companies Act (The Prospectus) Regulations of 2005. TIL also executes orders on the Malta Stock Exchange.
This Best Execution Policy is based on the specific characteristics of TIL’s clients (all being retail clients), the financial instruments in respect of which it receives and transmits orders (namely the bonds issued by the Issuers) and the sole execution venue available for this financial instrument.
Scope
Currently, TIL acts as receiver and transmitter of Clients’ specific instructions (orders) to buy or sell bonds issued by the Issuers. TIL only receives orders in paper format following the completion of an Application Form.
In this respect, TIL will only transmit Clients’ orders to the Issuers without amending them. TIL does not “execute” any transactions, therefore is not required to meet the “best execution” requirements. TIL does not actually undertake the transactions themselves, but passes them to the relevant Issuer which undertakes the transaction. The Issuer will be bound by terms of the prospectus when executing the transaction.
Transmission Arrangements
TIL is required to implement procedures and arrangements which provide the prompt fair and expeditious transmission of a client order for execution. TIL is obliged to provide appropriate information to its clients in its Best Execution Policy. Prior consent to such policy is requested from its clients, which is considered as consented through the acceptance of the Terms of Business. Such a policy shall also be published on TIL’s website. Any material changes to the Best Execution Policy will be promptly communicated to the clients through its website.
This policy outlines the strategy for complying with the best execution duties in the reception and transmission of client orders. This also highlights the most important elements of the execution arrangements in place for TIL and describes the main factors that TIL takes into consideration in establishing the best possible results for its clients.
As applicable, the regulatory obligations require TIL to disclose the execution venues used in respect to of the instrument and the factors affecting the choice of execution venues (including a regulated market, a Multilateral Trading Facility, a systemic internaliser, or a market marker, or liquidity provider or prime broker) per financial instrument, client type and how all these factors affect its choice of the execution venues. Information on any fees and charges of each alternative execution venue in use shall also be disclosed, as applicable. All TIL employees are required to familiarize themselves with the above-mentioned policy and transmit orders in line with the policy. At all times, TIL shall act in the best interest of the clients.
Disclosure to the clients and execution of venues
To the extent applicable, TIL is required to disclose, in good time prior to the transmission of an order for execution, the execution venues to which it transmits clients’ orders for execution. Where, in view of the operations of TIL, the latter is required to disclose execution venues, TIL shall, on an annual basis, publish the top 5 execution venues by type trading volumes wherein it has transmitted client orders for execution in the preceding year and information on the quality of the execution obtained. This information is to be provided to the public in a summarized format. Any monetary benefits received from different participants in the transactions by TIL shall be disclosed to the clients.
TIL may receive and transmit orders of its clients through a single execution firm or venue when it is able to show that this allows it to obtain the best interest for its clients on a consistent basis by obtaining at least as good as results that it could have reasonably expected from using alternative venues. A single venue can be used if it will deliver best possible results for the financial instruments and orders it receives from its clients. In order to be able to do this, TIL is to assess all possible alternatives to the inclusion of a single venue, including the advantages of indirect access, such as routing orders through other intermediaries. Any changes to the Company’s best execution policy shall be communicated to the clients in a durable medium.
Choice of the execution venue
TIL routes all orders for the acquisition of bonds issued by the Issuers by directing the orders directly to the respective issuer, without thus routing the order through an execution venue. This strategy takes into account ‘total consideration’ of all the best possible results for its clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. This has been found to be in the best interest of the clients and to produce the best execution result for the clients of TIL. This shall be disclosed to the clients in good time prior to the reception and transmission of orders.
Execution Venues
Financial Instrument
Maltese – Equity and Bonds
Execution Venues
Malta Stock Exchange
| Retail Client | A client who does not satisfy the requirements of either the classification of an Eligible Counterparty or of a Professional Client, or any client who has requested to be treated as a Retail Client. |
| Professional Client | Per Se Professional Client 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 mentioned in Schedule 2 to the Investment Services Act, 1994: a. Entities which are required to be authorised or regulated to operate in the financial markets. The list below should be understood as including all authorised entities carrying out the characteristic activities of the entities mentioned: 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; viii. Locals; and ix. Other institutional investors. b. Large undertakings meeting two of the following size requirements on a company basis: – balance sheet total: EUR 20,000,000 – net turnover: EUR 40,000,000 – own funds: EUR 2,000,000 c. National and regional governments, including public bodies that manage public debt at national or regional level, Central Banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB, and other similar international organisations. d. Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitisation of assets or other financing transactions. Professional Clients are responsible for keeping the Company informed about any change, which could affect their categorisation. Elective Professional Clients The Company must ensure that the client requesting to be treated as an Elective Professional Client satisfies the qualitative test and quantitative test described below. As a minimum, two of the following criteria shall be satisfied (‘quantitative test’): – The client has carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter of the previous four quarters; – The size of the client’s portfolio, defined as including cash deposits and Instruments exceeds EUR 500 000; – The client works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged. The Company will undertake an adequate assessment of the expertise, experience, and knowledge of the client, which gives reasonable assurance, in the light of the nature of the transactions or services envisaged, that the client is capable of making his own investment decisions and of understanding the risks involved (‘the qualitative test’). Documentation evidencing satisfaction of the requirements indicated above will be requested if the client is not known to the Company and relevant information is not available to the Company by other means. If the client is not a natural person, the qualitative test should be performed in relation to the person authorised to carry out transactions on its behalf. |
| Eligible Counterparties | Per Se Eligible Counterparties Each of the following is an Eligible Counterparty (including an entity that is not from a Member State or an EEA State that is equivalent to any of the following): a. An investment firm; b. A credit institution; c. An insurance company; d. A UCITS or a UCITS management company; e. A pension fund or a pension fund management company; f. Another financial institution authorized or regulated under EU Law or the national law of an EU Member State; g. Persons providing investment advice in the course of providing another professional activity not covered by MiFID II provided that the provision of such advice is not specifically remunerated; h. associations set up by Danish and Finnish pension funds with the sole aim of managing the assets of pension funds that are members of those associations; i. A national government and its corresponding offices including public bodies that deal with public debt; j. Central bank and supranational organization. Entities classified as Eligible Counterparty have the right to request, either generally or on a trade-by-trade basis to be treated as Professional Clients. Such requests are addressed to the Company by submitting a Request for Re-Categorisation from Eligible Counterparty to Professional Client (“Appendix C”) duly filled in. Elective Eligible Counterparty The Company may treat a client as an Elective Eligible Counterparty if: – The client is an undertaking and a Per Se Professional Client (except for a client that is only a Per Se Professional Client because it is an institutional investor) – The client is an undertaking and requests such categorisation and is an Elective Professional Client but only in respect of the services or transaction for which it could be treated as a Professional Client. |
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Timberland Invest Ltd.,
CF Business Centre,
Gort Street,
St Julians STJ 9023
Malta