MiFID

1. Policy Objective

In line with the intention of the legislator, this policy of OTP Banka Slovensko, a.s., (hereinafter referred to as „Bank”) governs procedures within the range of investment and ancillary services, enabling to discover, assess and solve conflicts of interests that could potentially lead to damaging the client. In addition, the Bank is fully aware of the fact that for the purpose of strengthening the close and long-term relations with the clients, increasing clients´ satisfaction and supporting the trust needed, it is desirable to have available effective mechanisms to avoid and solve conflicts of interests between clients, between a client and an authorized employee of the Bank, as well as between a client and the Bank. The procedures to solve conflicts of interests reduce the risk of discrimination of treating clients, but at the same time they protect business interest and the good name of the Bank. This policy defines the range of persons concerned in terms of conflicts of interests. Moreover, it presents a general procedure to discover, assess and solve incompatibilities resulting from the conflict of interests.

This policy anchors the form how the Bank provides for the priority of clients in all the stages of providing services, in particular in introducing a new product, or in making services available to a new range of clients. The content of this policy corresponds to the requirements of the Slovak legal regulations, EU directives as well as the best international practice.



1. Definitions of terms

Employee:
A natural person that has an employment contract with OTP Banka Slovensko, a.s., or is in another legal relation with OTP Banka Slovensko, a.s., focused on performing work.

Bank:
OTP Banka Slovensko, a.s.

Persons in relations with the Bank:
An employee of the Bank, an external entity providing for outsourced activities based on an agreement on outsourcing, and employees of such an entity, an external entity providing for mediatory activities based on an agreement with the Bank, as well as managers and employees of such an entity

Provision of investment services:
The activity defined in Act No 566/2001 Coll. on securities and investment services, amending some Acts

Permanent data medium:
A tool enabling the client to permanently store data intended for the client for the time period which is in line with the purpose of the data, and presentation of these stored data in an unchanged form and with unchanged contents

Client:
A person using a service falling under the scope of the Act on Investment Services

Manager:
Members of the board of directors, or deputies of the general director, and members of the supervisory board of the Bank

2. Material scope of the Policy
The Policy of Conflicts of Interests Management defines principles applicable to procedures, and the organization of solutions to situations related to investment services provided for by the Bank. The material scope of the Policy of Conflicts of Interests Management does not refer to those cases that are related to other services or other activities of the Bank. The Policy of Conflicts of Interests Management refers also to the conflicts of interests between the client and the investment services provider, an employee of the investment services provider, or another client.

3. Personal scope of the Policy
The Policy of Conflicts of Interests Management refers to the Bank, employees of the Bank, or to persons in relation with the Bank (in a business, legal or economic relation (hereinafter referred to as „Relation“).



1. Circumstances giving rise to conflicts of interests
Any existing or potential conflicts of interests that may have negative consequences for the client must be considered conflicts of interests. Based on this, a conflict of interest may come to existence for example in the following cases:

• the Bank or a person in relation to the Bank makes a profit or avoids a loss to the detriment of the client;
• the Bank or a person in relation to the bank is engaged in the result of the investment service provided to a client or a trade implemented on behalf of the client, or, when the Bank is engaged in the same trade as the client and the interest of the Bank in the result is different from the interest of the client;
• the Bank or a person in relation to the Bank prefers interests of another client or another group clients to the interest of the client for any reason;
• the Bank or a person in relation to the bank got or will get in the future an incentive in any form from a third person exceeding the common fee for the service.

We speak about conflicts of interests when these conflicts of interests cause or may cause a disadvantage for the client.

Already in creating services and introducing products, the Bank seeks to avoid conflicts of interests. When it is not possible to exclude any potential rise of conflicts of interests, the Bank shall establish such an internal organizational and management environment in which these conflicts of interests may not cause any disadvantage for the clients. In the case of particular services or individual clients, it is impossible, however, to exclude a rise to cases of conflicts of interests in spite of all the precautions. Shall such a case occur, the Bank always duly informs the client so that the client can take an informed decision regarding the use of given service.

2. Procedures
Regarding conflicts of interests discovered based on notifications or other methods, the task of the Bank is to establish, to continuously updated and at least once a year to revise the registration of cases of conflicts of interests that contain possible cases of conflicts of interests, related actual or potential disadvantages, and relevant procedures focused on their solutions. In justified cases, the Bank reviews the scheme of incompatibilities in addition to the regular annual revisions.

Taking into account legal and regulatory requirements as well as market procedures, the Bank established an adequate controlling system. Besides education of its employees, and special expert knowledge, the Bank emphasizes also the knowledge required in terms of prevention, identification and avoiding of cases of conflicts of interests.

Within the Bank, the unit of compliance is responsible for summing-up of the intra-bank tasks related to situation of conflicts of interests and for registering cases of conflicts of interests.

3. Solving situations of conflicts of interests
The Policy of the Bank is based on solving existing or potential conflicts of interests that may have negative consequences for client. Therefore, the Bank investigates particular cases of conflicts of interests, and determines their general types, ranges of possible cases as well as related criteria of incompatibility. The registration of cases of conflicts of interests is established based on this investigation.

Employees that are concerned by issues of conflicts of interests perform their work activities preserving maximum independence. For the purpose of satisfying this requirement, the Bank:

• manages the information flow among employees performing particular tasks related to the provision of investment services so that it is controllable and thus any potential damages to the client due to conflicts of interests (organizational separation of the units, rules of the “Chinese Wall” type) could be avoided;
• provides for individual control for those employees that perform tasks related to the provision of investment services on behalf or in favour of such clients among whom conflicts of interests may occur, or that represent conflicts of interests in other ways, including cases when the conflict comes into existence between the activity performed on behalf or in favour of the client and the transaction carried out on the Bank’s own account (organizational separation of units);
• excludes any immediate relation or direct connection between remuneration of those employees who perform activities related to the provision of investment services that may lead to conflicts of interests (procedures of remuneration);
• prevents that a person having no tasks within the provision of investment services could influence, in any way, employees performing these tasks (the duty of secrecy, the Chinese Wall, organizational separation of units);
• prevents that a control of a potential conflict of interests occurring in the case of parallel performance of tasks or in the case of performing related tasks of provision of investment services is limited in any way (organizational separation of units);

When the provision of independence in accordance with the above principles is not satisfying, the Bank may adopt also other measures focused on solving risks related to independence. Such cases or references to such cases are contained in the registration of cases of conflicts of interests.

The Bank is obliged to inform the client about the nature and source of such conflicts of interests when it does not dispose of efficient procedures of solution and the conflicts of interests may lead to such incompatibilities that damage or discriminate the client. The Bank is obliged to implement any justified measures to eliminate conflicts of interests damaging the client. The Bank considers informing the client about the conflicts of interests to be a solution to this incompatibility only when the nature and the source of the conflicts of interests do not allow any implementation of an adequate solution. Informing the client about the conflicts of interests shall be implemented by means of a permanent data medium and shall be sufficiently detailed so that – especially having regard to client’s rating – the client could make a decision on using investment services based on this information.

4. Introduction of new products
In the case of introducing a new investment product, the organization responsible for establishing commercial conditions of introduction of new products is obliged to indentify any potential conflicts of interests related to a new product, or when a new product is related to conflicts of interests, the organization must submit a proposal of efficient solutions to the problem.

In the case of identification of incompatibilities, the organization shall inform the Section. The task of the Section is to participate in establishing the proposed procedure to solve incompatibilities.

5. Extension of the service to a new group of clients
The rules applicable to the introduction of new products must also be used in the case when the provision of investment services or ancillary services is extended by a new group of clients.

6. Financial analysis
The Bank performs activities related to the financial analysis in line with provisions of Act No 566/2001 Coll. on securities and investment services, amending some Acts.

7. Strategy of performing and executing orders of OTP Banka Slovensko, a.s.
The orders given by the clients are executed by the Bank in line with the principles given in the strategy of the Bank on performing and implementing orders of OTP Banka Slovensko, a.s.. The strategy of executing orders ensures that potential conflicts of interests occurring during the implementation of the orders can be eliminated, and that the orders are executed transparently, and in the manner and under conditions communicated to the client in advance.

8. Individual trades of employees
By means of efficient internal provisions and measures that are in line with legal regulations, the Bank prevents from misusing confidential information – legally protected classified information of clients, or other confidential data – in securities trading. Therefore, the Bank keeps registration – among others – also of trades of its employees made on their own accounts, to the extent of and in compliance with relevant legal regulations.

9. Remuneration of employees
The Bank created its internal incentive system so that the clients’ interests are in the first place in each stage of the system of procedures. Therefore, in each case when the client is provided an investment service, the remuneration of the employees is independent of selling particular products.

10. Remuneration from third persons
In connection with providing investment services and ancillary services, the Bank may not receive any advantages from third persons, and may not provide any advantages to third persons (that are not clients of the Bank within given trade), except when it is in favour of the client.

11. Giving information to clients
When a retail client or a future retail client of the Bank requires further information about the Policy of Conflicts of Interests Management, the required information shall be given. The rules of providing investment services are given in the Framework Agreement.