INVESTOR COMPENSATION FUND POLICY
Centralspot Trading Limited (the “Company”) is a member of the Investor Compensation Fund (the “Fund”) for Customers of Cyprus Investment Firms (CIFs) and other Investment Firms (IFs) which are not Credit Institutions , under the provisions of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and Other Related Matters Law 87(I)/2017 (hereinafter referred to as the “Law”).
The objective of the ICF is to secure claims of the covered Clients against members of the ICF, through the payment of compensation in cases where the member concerned is unable, due to its financial circumstances and when no realistic prospect of improvement in the above circumstances in the near future seems possible. The ICF compensates the covered Clients for claims arising from the covered services provided by its members, so long as failure by the member of the ICF to fulfil its obligations has been ascertained, in accordance with the terms and procedure defined in the Law, notwithstanding a relevant obligation by the member of the ICF in accordance with the legislation and the terms which govern its agreement with the covered Client and regardless of whether the said obligation of the member of the ICF is based on the agreement or on wrongdoing.
It is a legal obligation for CIFs and other IFs, which are not banks, to subscribe to the Fund.
The Fund covers the Retail Clients of the Company.
It does not cover Professional Clients and Eligible Counterparties. Specifically non-covered Clients are those belonging into the following categories:
a) The following categories of institutional and professional investors:
Investment Firms (Ifs).
Legal entities associated with the member of the Fund and, in general, belonging to the same group of companies.
Cooperative credit institutions.
Collective investment organizations in transferable securities and their management companies.
Social insurance institutions and funds.
Investors characterized by the member as professionals, upon their request.
b) States and supranational organizations
c) Central, federal, confederate, regional and local administrative authorities
d) Enterprises that have close ties with the Company as the ‘close ties’ is construed in Section 2(1) of the Law
e) Managerial and administrative staff of the member of the Fund
f) Shareholders of the member of the Fund, whose participation directly or indirectly in the capital of the member of the Fund amounts to at least 5% of its share capital, or its partners who are personally liable for the obligations of the member of the Fund, as well as persons responsible for the carrying out of the financial audit of the member of the Fund, such as its qualified auditors
g) Investors having in enterprises connected with the member of the Fund and, in general, of the group of companies, to which the member of the Fund belongs, positions or duties corresponding to the ones listed in paragraphs (e) and (f)
h) Second-degree relatives and spouses of the persons listed in paragraphs (e), (f) and (g), as well as third parties acting for the account of these persons
i) Apart from investors convicted of a criminal offence pursuant to the Prevention and Suppression of Money Laundering Activities Law of 2007, as amended or replaced, investors-Clients of the Company responsible for facts pertaining to the Company that have caused its financial difficulties or have contributed to the worsening of its financial situation or which have profited from these facts.
j) Other firms of the same group.
k) Investors in the form of a company, which due to its size, is not allowed to draw a summary balance sheet in accordance with the Companies Law or a corresponding law of a Member State.
In the cases of paragraphs (e), (f), (g) and (h), the Fund suspends the payment of compensation informing the interested parties accordingly, until it reaches a final decision as to whether such cases apply.
The ICF shall compensate the Company’s covered Clients as to the covered investment services and ancillary services offered by the Company as these are listed on its authorization which can be found in the website of the Cyprus Securities and Exchange Commission.
COMPENSATION PAYMENT PROCESS
The Fund compensates the covered clients for claims arising from the covered services provided by its members, as long as failure by the member to fulfill its obligations has been ascertained notwithstanding a relevant obligation by the member of the Fund in accordance with the legislation and the terms which govern its agreement with the covered client and regardless of whether the said obligation of the member of the Fund is based on the agreement or on wrongdoing.
Failure by a member of the Fund to fulfill its obligations consists of its failure:
Either to return to its covered clients funds owed to them or funds which belong to them but are held by the member, directly or indirectly, in the framework of the provision by the said member to the said clients of covered services, and which the latter requested the member to return, in exercise of their relevant right;
Or to hand over to the covered clients financial instruments which belong to them and which the member of the Fund holds, manages or keeps on their account, including the case where the member is responsible for the administrative management of the said financial instruments.
The Fund initiates the compensation payment procedure in one of the following situations:
(a) The Cyprus Securities and Exchange Commission (CySEC) has determined by resolution that that the Company appears, for the time being and for reasons directly related to the Company’s financial circumstances, to be unable to meet its obligations arising out of Clients’ claims and has no early prospect of being able to do so. CySEC shall issue its decision for the initiation of the compensation payment procedure by the ICF within a reasonable time and publish the relevant information on its website.
(b) A Court of the Republic has made a ruling, for reasons directly related to the financial circumstances of the Company, which has the effect of suspending the investors’ ability to make claims against the Company.
Upon issuance of a decision by the Court or by CySEC, on the commencement of the compensation payment process, the Fund publishes in at least two newspapers of national coverage, an invitation to the covered clients to make their claims against the member of the Fund arising from covered services, designating the procedure for the submission of the relevant applications, the deadline for their submission and their content.
The compensation applications of covered Clients with which they make their claims against the Company are submitted to the ICF in one (1) of the following two (2) ways:
(a) By filling in the online application form which can be found on CySEC’s website, or
(b) By post or by hand, a compensation application (in a form of simple letter) to the offices of the ICF, accompanied by all supporting evidence, to the following address:
Investor Compensation ICF for IF Clients,
27 Diagorou Str., 1097, Nicosia, Cyprus.
When submitting a compensation application pursuant to point (b) of this paragraph, the following minimum information shall be included:
(a) The name, Identity Card/Passport No of the claimant-Client.
(b) The address, telephone and fax numbers as well as any email address of the claimant-Client.
(c) The name of the Company.
(d) Client code that the claimant-Client had with the Company.
(e) Copy of the covered services agreement between the Company and the claimant-Client.
(f) The exposition of the particulars from which the alleged claims of the claimant-Client and their amount are delivered.
(g) Copy of account statement from the transactions platform the claimant-Client has used.
(h) Copy of documents that prove the claimant-Client deposits to the Company (e.g. swift transfers, deposit orders, debit advice, etc.).
(i) Reference and copies of any correspondence with the Company regarding the alleged claim.
(j) Written confirmation of the claimant-Client that the information included in the application/letter as well as all the documents accompanied it are correct and true.
(k) Any other information the ICF might or will request.
Upon submission of the compensation applications, the Administrative Committee of the ICF shall check whether the following conditions are fulfilled:
(a) The initiation of the compensation payment procedure.
(b) The existence of a valid claim by a covered Client against the Company which derives from an investment operation of a duly completed application claimant-Client falls within the category of covered Clients.
(c) The submission in time of a duly completed application form accompanied by the necessary supporting documents.
(d) The claims do not arise from transactions in connection with which there has been a criminal conviction for money laundering as defined in the Prevention and Suppression of Money Laundering Activities Law of 2007, as amended or replaced;
(e) There are no criminal proceedings pending and/or the claimant-Client is not convicted of a criminal offence pursuant to the Prevention and Suppression of Money Laundering Activities Law of 2007, as amended or replaced.
(f) The conditions for the valid submission of compensation applications are fulfilled pursuant to Limitation of Actionable Rights Law, as amended.
The Administrative Committee of the ICF rejects the compensation application in case the claimant-Client does not fulfill the conditions referred to in the previous paragraph above, or if at the Administrative Committee’s discretion, the claimant-Client used fraudulent means in order to secure the payment of compensation by the ICF, especially if it knowingly submitted false evidence.
Upon completion of the valuation, the ICF:
(a) Issues a decision listing the Clients of the Company which are compensation beneficiaries along with the amount of money each one of them is entitled to receive (including the Clients to whom compensation will not be paid and the reasons thereof) and, communicates it to CySEC and the Company within five (5) working days from its issue; and
(b) Communicates to each affected Client its decision the soonest possible from the issue of the aforementioned decision.
AMOUNT OF COMPENSATION
The amount of compensation payable to each covered Client is calculated in accordance with the legal and contractual terms governing the relation of the covered Client with the Company, subject to the rules of setoff applied for the calculation of the claims between the covered Client and the Company.
The calculation of the payable compensation derives from the sum of total established claims of the covered Client against the Company, arising from all covered services provided by the Company and regardless of the number of accounts of which the Client is a beneficiary, the currency and place of provision of these services within the European Union.
The total payable compensation to each covered Client of the Company is defined as the lower of 90% of the cumulative covered claims of the covered Client and the amount of twenty thousand Euros (EUR 20,000).
In the case whereby beneficiaries of a joint account of the Company are in their majority covered Clients:
(a) in the calculation of the coverage provided for in the third paragraph above, the share attributable to each covered Client shall be taken into account.
(b) the claims shall be allocated equally amongst covered Clients pursuant to the provisions of the third paragraph of this section, unless there exist special provisions and subject to the exceptions of point below.
(c) the claims resulting from joint investment operation where two (2) or more persons have rights as partners of a private company, association or entity of similar nature, without legal personality, for calculation purposes pursuant to the provisions of the third paragraph of this section, are consolidated and are considered as an investment of one and the same investor.
The currency in which compensation is paid to covered Clients shall be the Euro. Where the funds and/or financial instruments are expressed in a currency other than the Euro, for purposes of calculation of the compensation amount, the exchange reference rate of the said currency against the Euro fixed by the European Central Bank at the end of the day the compensation payment procedure has been effected, shall be used.
V 2.0 28.04.20