MiFID

Safeguarding of Client´s Assets in line with Act No 566/2001 Coll. on Securities and Investment Services

• (1) Client´s assets placed with a securities dealer shall not be included in the assets of the securities dealer. A securities dealer may not use the funds or financial instruments that a client has placed with it for its own benefit or the benefit of any third party, unless the client has given his consent thereto.
• (2) For the purposes of safeguarding clients´ rights in relation to financial instruments and funds belonging to them, a securities dealer shall:
  • keep such records and accounts that are necessary to enable it at any time and without delay to distinguish assets held for one client from assets held for any other client, and from their own assets;
  • maintain its records and accounts in a way that ensures their accuracy, and in particular their correspondence to the financial instruments and funds held for clients,
  • conduct, on a regular basis, reconciliations between its internal accounts and records and those of any third parties by whom those assets are held;
  • take the necessary steps to ensure that any client financial instruments deposited with a third party, in accordance with Article 71i, are identifiable separately from the financial instruments belonging to the securities dealer by means of differently titled accounts on the books of the third party or other equivalent measures that achieve the same level of protection;
  • take necessary steps to ensure that client funds deposited in accordance with Article 71j are held separately from any accounts used to hold funds belonging to the securities dealer;
  • introduce adequate organizational arrangements to minimize the risk of the loss or diminution of client assets, or of rights in connection with those assets, as a result of misuse of the assets, fraud, poor administration, inadequate record-keeping or negligence.
• (3) If, for reasons of the applicable law of the jurisdiction in which the funds and financial instruments are kept or held, the arrangements made by the securities dealer in compliance with paragraph (2) are not sufficient to safeguard clients ´rights, especially in the event of the insolvency of the securities dealer, the securities dealer shall take additional measures in order to safeguard clients ´assets.
• (4) If the applicable law of the jurisdiction in which the client funds or financial instruments are held prevents a securities dealer from complying with the provisions of paragraph (2) (d) or (e), the securities dealer shall take equivalent measures which have the same effect in terms of safeguarding clients´ rights.
• (5) By a decree to be promulgated in its full text in the Collection of Laws, the National Bank of Slovakia may lay down details of what is meant by “additional measures” and “equivalent measures” for the purposes set out in paragraphs (3) and (4), details of the conditions for depositing financial instruments with a third party under Article 71i and the manner and method of reconciliations made under paragraph (2).

• (1) A securities dealer shall, when providing investment services, ancillary services or investment services, act in the interests of clients in accordance with the principles of an honest business relationship and professional care in the best interest of the clients. The securities dealer shall operate in such a way as not to impair the security of the financial system, and it may not perform any activities directed towards the manipulation of the securities rates.
• (2) A securities dealer shall not be regarded as acting in accordance with the principles mentioned in paragraph (1) if, in relation to the provision of an investment service or ancillary service to a client, it pays or is paid any fee or commission, or provides or is provided with any non-monetary benefit, other than the following:
  • a fee, commission or non-monetary benefit paid or provided to or by the client, or a fee, commission or non-monetary benefit paid or provided to or by a person acting on behalf of the client,
  • a fee, commission or non-monetary benefit paid or provided by a third party, or a fee, commission or non-monetary benefit paid or provided by a person acting on behalf of a third party, where the following conditions are satisfied:
    • the existence, nature and amount of the fee, commission or benefit, or where the amount cannot be ascertained, the method of calculating that amount, must be clearly disclosed to the client in a manner that is comprehensive, accurate and understandable, prior to the provision of the relevant investment service or ancillary service;
    • the payment of the fee or commission, or the provision of the non-monetary benefit must be designed to enhance the quality of the relevant service and not impair compliance with the duty of the securities dealer to act in the best interest of the client;
  • proper fees which enable or are necessary for the provision of investment services, such as custody costs, settlement fees, levies to regulated market operators, levies to the supervisory authority, administrative fees or legal fees, and which, by their nature, cannot give rise to conflicts with the duties of the securities dealer to act in accordance with paragraph (1).
• (3) For the purposes of point one of paragraph (2)(b), the securities dealer may disclose to the client the essential terms of the arrangement relating to the fee, commission or non-monetary benefit in summary form, provided that it undertakes to disclose further details at the request of the client. The National Bank of Slovakia may suspend or terminate this right if it finds that securities dealer has failed to comply with the client´s request for disclosure of further details.