United Bulgarian Bank (hereinafter “the Bank”) recognizes the need to provide investment and /or ancillary services to its clients in an honest, fair and professional manner in compliance with the Markets in Financial Instruments Act and Ordinance No. 38 on the Requirements to the Activities of the Investment Intermediaries (hereinafter «Law»).

This policy document is applied prior to the provision of investment and / or ancillary services to existing or potential clients by the Bank’s Personnel.

The Bank performs appropriateness test, whenever required by the current regulatory and statutory requirements and by this policy, prior to the provision of other investment services.

The Bank is not obliged to perform the appropriateness and suitability tests prior to the provision of an investment service for specific type of transactions only if it has previously received all the information required by the Law so as to assess the suitability of clients’ investment decisions for the specific type of transactions

The Bank may request from the client to re-perform the suitability and appropriateness tests in case when a substantial change, in the initial information provided by the client, has occurred.

The Bank’s Personnel encourages clients and potential clients to provide all required information in order to assess their suitability and appropriateness.

 

The main objective of performing the suitability test is to obtain such information as is necessary for the Bank to assess the investment objectives of the client, the client’s financial ability to bear any related investment risks consistent with his investment objectives, and whether the client has the necessary experience and knowledge in order to understand the risks involved in the transaction or in the management of his portfolio.

The suitability test is performed before the provision of the following investment services:

The suitability test is performed for all client categories:

The suitability test is performed upon completion of the questionnaires which are at the disposal of the Bank’s Personnel.

In cases where the Bank does not obtain the required information from the suitability test of the client, the Bank is not obliged to provide investment advice or portfolio management services to the abovementioned client.

 

The Bank with the suitability test to Retail Clients receives information on the client’s:

a. investment objectives,

b. financial ability to bear any related investment risks,

c. level of experience and knowledge which enable him to understand the risks involved in the provision of  investment  advice or portfolio management services.

 

The Bank assumes that a Professional Client possesses the experience and knowledge   in relation to the products, transactions and services for which is classified as a professional client, and subsequently during the suitability test derives information only upon client’s:

a. investment objectives, and

b. financial ability to bear the related investment risks.

 

Specifically:

The Professional Clients (credit institutions, investment firms, other financial institutions, insurance companies, UCITS and their management companies, pension funds and their management companies, commodity and commodity derivatives dealers, locals[1] and portfolio investment companies and other institutional investors) are  considered to be able financially to bear the investment risks consistent with their investment objectives, when the provided investment service concerns provision of investment advice. In this case the Bank only assesses client’s investment objectives.

In cases where the Bank provides portfolio management services the abovementioned Professional Clients are not considered to be able financially to bear any related investment risks consistent with their investment objectives. In such cases the Bank considers the client’s:

a. investment objectives, and

b. financial situation to bear the related investment risks.

 

The Bank assumes that an Eligible Counterparty possesses both the necessary experience and knowledge, and is financially able to bear the related investment risks consistent with their investment objectives and consequently during the performance of the suitability test derives information only regarding client’s investment objectives.

 

The main objective of performing the appropriateness test is to obtain such information as is necessary for the Bank to assess whether the client has the necessary experience and knowledge in order to understand the risks involved in the investment product or in the investment service.

The Bank performs the appropriateness test only for clients categorized as “Retail” clients.

The appropriateness test is performed only for complex financial instruments during the provision of the following investment services:

Complex financial instruments are called the financial instruments that contain derivatives. Appendix 1 presents an indicative list of financial instruments, defined by the Bank for the purposes of this policy as Complex or Non-Complex Instruments.

The Bank conducts appropriateness test for the provision of the investment service for each client by deriving information regarding their experience level and knowledge that enables them to understand the risks related to the investment product or the investment service.

 

In cases where the Bank provides services of reception, transmission and execution of orders in non – complex financial instruments is not required to perform appropriateness test for the retail client, only if the Law’s following conditions are met:

 

When the Bank provides services of reception & transmission and execution of orders in complex financial instruments performs appropriateness test of the provided service for each retail client, by deriving information regarding its experience level and knowledge that enables him to understand the risks related to the transaction.

 Where it results from the test that the financial instrument or the service is not appropriate for client’s experience and knowledge or is not appropriate for the specific client, the Bank warns the client accordingly and receives specific and written instructions prior to the execution of the transaction. Otherwise, the transaction is not executed.

In cases where the Bank does not obtain the necessary information or receives insufficient information, in the course of the appropriateness test procedure warns the client that the Bank is not able to determine whether the investment service or the financial instrument are appropriate for him.

The Bank warns the client that is not responsible for the risks resulting from the execution of the specific transaction and the provision of these services. These services can be provided upon specific and written instructions received from the client.

 

 

 

 

 

 

 

 

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