General terms and conditions

This is an English translation of the Slovenian original provided as a reference to aid the understanding of the relevant documents. Equito Brokerage Company, Ltd. shall not be held responsible for any erroneous translations and is presented as is. In case of a discrepancy, the Slovenian original will prevail as an official document and applicable for interpretation.

PART I: GENERAL PROVISIONS

1. BASIC INFORMATION

1.1. Purpose of the General Terms and Conditions

This document (hereinafter referred to as the “General Terms and Conditions”) governs the terms and conditions of business of Equito, brokerage company, Ltd. (hereinafter referred to as the “Company”) in the provision of investment services and ancillary services pursuant to the Market in Financial Instruments Act (Official Gazette of the Republic of Slovenia, No. 77/18 as amended and supplemented; ZTFI-1) and pursuant to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349-496; MIFID II Directive).

1.2. Information about the Company

Company: Equito, brokerage company, Ltd

Abbreviated firm: Equito Ltd.

Date of establishment: 5. 5. 2022

Share capital: EUR 500.000,00

Registration number: 9125108000

Tax number: 79822819

E-mail: info@equito.co

Website: www.equito.co

1.3. Services provided by the Company

The company provides the following investment services and transactions under the MIFID II and ZTFI-1:

(a) Reception and transmission of orders in relation to one or more financial instruments,

(b) Execution of orders on behalf of clients,

(d) Investment advice,

(e) Placing of financial instruments without a firm commitment basis,

In addition to the above, the Company also provides the following ancillary investment services:

(a) Safekeeping and administration of financial instruments for the account of clients, including:

i. custodianship and related services such as cash/collateral management,

ii. services for the maintenance of accounts of clients’ securities, other than the maintenance of a central register.

(b) Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings.

(c) Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments.

1.4. Financial instruments

The Company provides investment services to clients in relation to the following financial instruments as defined in the ZTFI-1 and MIFID II:

(a) transferable securities,

(b) money market instruments,

(d) options, futures, swaps, forwards and other derivative transactions relating to securities, currencies, forward rate agreements, emission coupons or yields as underlying instruments or other derivatives, financial indices or other financial benchmarks that can be settled by the transfer of the underlying instrument or by a cash payment,

(e) options, futures, swaps, forwards and other derivative transactions relating to commodities as underlying instruments which: must be settled by cash payment or may be settled by cash payment at the option of one of the parties, except for default of the other party to the contract or other reason for termination of the contract,

(f) options, futures, swaps and other derivative transactions relating to commodities as underlying instruments which may be settled by the transfer of the underlying instrument, provided that they are traded on a regulated market, MTF or OTF, as the case may be, with the exception of wholesale energy products traded on an OTF which must be settled by the transfer of the underlying instrument,

(g) options, futures, swaps, forwards and other derivative transactions relating to commodities as underlying instruments which: may be settled by the transfer of the underlying instrument and are not listed in the previous point and have no commercial purpose but have the characteristics of other derivative instruments. More detailed information on the financial instruments in relation to which the Company provides investment services and transactions, and ancillary investment services, and the risks associated with those financial instruments, is disclosed in Annex 1 (Description of Financial Instruments and Risks) to these General Terms and Conditions.

2. PROCEDURES BEFORE AND AT THE TIME OF ENTERING INTO A BUSINESS RELATIONSHIP WITH CLIENTS

2.1. Client identification

The Company, as a regulated entity under the Act on Prevention of Money Laundering and Terrorist Financing (Official Gazette of the Republic of Slovenia, No. 48/22, ZPPDFT-2), is obliged to identify the Client prior to entering into a contract with the Company, either by personal identification, video identification or electronic identification, all in accordance with the provisions of the ZPPDFT- 2 and associated regulations.

The Client expressly authorises the Company to keep a digital copy or photocopy of the Client’s identity document for identification purposes and in accordance with applicable regulations.

2.2. Processing of Client data

In the process of entering into a business relationship, the Client is required to provide the Company with the personal data necessary for the Company to verify the identify of the Client, to carry out all the procedures prescribed by the ZPPDFT-2 in respect to the screening of Clients, and to provide investment services and transactions and ancillary investment services to the Client. If the Client fails to provide such information, the Company shall not be able to comply with its legal obligations or enter into a contractual relationship with the Client.

The Client, who is a natural person, may, subject to conditions set out in Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (OJ L 119, 4.5.2016, p. 1-88; General Data Protection Regulation), request from the Company to be informed of his/her personal data and to have access to, rectify and/or erase, restrict the processing of, or transfer his/her personal data. If the Company processes the personal data of a Client on the basis of the Client’s consent, the Client may withdraw the consent at any time. The withdrawal of consent shall apply prospectively and shall not affect the lawfulness of the processing that took place prior to the withdrawal. The Client may object to the processing of personal data where the Company processes personal data on the basis of legitimate interests. In this case, the Company will cease processing the personal data unless the Company demonstrates compelling legitimate grounds for the processing which override the interests, rights and freedoms of the Client or for the establishment, exercise or defence of legal claims.

The Client is entitled to file a complaint, if the Client considers that the Company is unlawfully processing personal data. The Client may exercise all of his/her rights by sending a written request to Dunajska cesta 5, 1000 Ljubljana, or by e-mail to “info@equito.co”.

Also, a Client who considers that the Company is in breach of the data protection regulations has the right to file a complaint with the Information Commissioner of the Republic of Slovenia, Dunajska cesta 5, 1000 Ljubljana.

The Client warrants that the information provided is accurate and truthful and shall be liable for any damages resulting from inaccurate or untrue information. The Client is obliged to notify the Company immediately of any changes in the provided information and of any changes related to Client’s tax residency. For notices given by the Company to the Client, the Client shall be deemed to have received such notices if the Company has sent it to the Client using the contact details provided by the Client to the Company.

The Client expressly and irrevocably authorises the Company to make enquiries with third parties regarding the Client’s assets, the Client’s permanent/temporary residence, place and date of birth, tax and registration number, and to provide such data and information to the Company, in cases where it is necessary for the execution of these General Terms and Conditions and/or the Contracts or for the exercise of the Client’s rights or performance of the Client’s obligations under these General Terms and Conditions and/or the Contracts.

The Company shall protect the information on the balances and performance of the Client’s financial instruments accounts and other information, facts, or circumstances of which it becomes aware in connection with the provision of investment services in accordance with the applicable regulations.

The Client and the Company undertake to treat as confidential all data and information arising out of or in connection with transactions executed under these General Terms and Conditions. Notwithstanding the foregoing, the Company may, without the prior consent of the Client, disclose information and data about the Client to domestic and foreign governmental and other relevant regulatory and judicial authorities upon their request in accordance with applicable regulations. In connection with dealing in financial instruments in particular (but not limited to) foreign markets, the Client, as the ultimate holder of the foreign financial instruments, hereby gives explicit authorisation and consent to the Company for disclosing and providing to the custodian bank, custodian, execution venues, etc., all documentation and data relating to the identification of the Client, including the Client’s personal data, including all information relating to the holdings of or transactions in particular financial instruments in its accounts or sub-depositories with the Company.

2.3. Client categorisation

In the process of entering into a business relationship with a client, the Company shall carry out a process of categorisation of the client as a retail, professional and/or eligible counterparty in accordance with the Client Categorisation Policy, which is available to Clients for review at the Company’s registered office and accessible on the Company’s website “www.equito.co”. The Company is obligated to tailor the scope and manner of its services to each client according to the client’s classification within the aforementioned categories.

2.4. Assessment of suitability and appropriateness

In the provision of investment services, business services, and ancillary investment services, the Company shall act diligently, honestly, and with due professional care, prioritizing the interests of its clients as its guiding principle. Accordingly, in compliance with the Rules on the Assessment of Suitability and Appropriateness, the Company shall, prior to commencing investment advisory services or portfolio management services, obtain comprehensive information from the client or potential client regarding their knowledge and experience, investment objectives, and acceptable level of risk. This suitability and appropriateness assessment enables the Company to offer clients appropriate products and services. It is in the best interest of the clients to provide the Company with up-to-date, accurate, and complete information regarding their knowledge, experience, financial position, loss-absorbing capacity, and investment objectives, which is necessary for the Company to conduct a thorough suitability and appropriateness assessment.

3. GENERAL COVENANTS

3.1. Protecting clients’ interests and complying with regulations

In the provision of investment services, related transactions and ancillary investment services, the Company shall act diligently, honestly and with due professional care and shall have clients’ interests as its guiding principle in the provision of services to them. The Company is obliged to inform clients of all circumstances known to the Company which are relevant to the client’s decisions in relation to orders to buy or sell financial instruments or other services provided by the Company and the risks associated with investments in financial instruments. A description of the risks relating to each type of financial instrument is contained in Annex 1 (Description of Financial Instruments and Risks) to these General Terms and Conditions.

The Company is obliged to perform investment services and transactions and ancillary investment services in accordance with the applicable regulations and rules of the KDD – Central Securities Clearing Corporation, LLC (hereinafter referred to as the “KDD”), other central securities depositaries and sub-depositaries, and the rules of the relevant regulated markets and other relevant regulations.

3.2. Limitation of liability

The Company does not guarantee the performance of financial instruments to the Client and shall not be liable to the Client or any third party for any direct or indirect damages, liabilities and/or losses arising as a result of the performance of these General Terms and Conditions or the Services Agreement (as defined below), except as provided in these General Terms and Conditions. Furthermore, the Company shall not be liable for the consequences of the Client’s decisions and shall not be liable for the consequences of any misuse of the Client’s financial instruments by third parties conducted through the Company. The Company shall also not be liable for any damages, costs or any other liabilities suffered by the Client in connection with the provision of the Company’s services in the event that the Client has provided the Company with incorrect, incomplete or inaccurate information or documents.

In no event shall the Company be liable for any damages, liabilities and/or losses of any party arising from any disruption to the Company’s business beyond the Company’s control (such as force majeure or conduct of a client).

3.3. Managing conflicts of interest

The Company provides investment services, transactions and ancillary investment services to a wide range of clients, which in certain situations may give rise to conflicts of interest that could adversely affect the protection of clients’ interests. Such conflicts of interest may arise in particular:

– between the Company and its related parties and (potential) Clients;

– between the Company’s different Clients;

– between the Company’s employees and its (potential) Clients.

The Company is obliged to organise its business in such a way that (potential) conflicts of interest are avoided or minimised and appropriately managed. In order to properly manage and control conflicts of interest, the Company has adopted a specific Conflicts of Interest Management Policy, which is available to Clients for review at the Company’s registered office and on the Company’s website “www.equito.co”.

3.4. Investor Compensation Scheme

In accordance with the provisions of Article 450 of the ZTFI-1, the Company is included in the Investor Compensation Scheme. More detailed information on the Investor Compensation Scheme is contained in the document “Information on the Investor Compensation Scheme”, which is available to the Clients at the Company’s registered office and on the Company’s website “www.equito.co”.

The above-mentioned Investor Compensation Scheme only covers claims of retail clients, but not:

– claims of professional clients referred to in Articles 246 to 248 of the ZTFI-1;

– claims relating to transactions for which the holder of the claim has been convicted of a criminal act of money laundering,

– claims of legal persons which, according to the data in their last published annual financial reports, qualify as large or medium-sized companies according to the Companies Act (Official Gazette of the Republic of Slovenia, No 65/09, as amended and supplemented; ZGD-1), and

– other claims referred to in Article 450(8) of the ZTFI-1.

3.5. Accessibility and changes to the General Terms and Conditions

The General Terms and Conditions are available for review at the Company’s registered office and on the Company’s website “www.equito.co”.

The Company shall ensure that the Clients, prior to entering into or in the process of entering into a business relationship with the Company, fully inform themselves with and agree to the contents of these General Terms and Conditions (including all Annexes), the Company’s Price List of Services and the Company’s Order Execution Policy.

In the event of any material change to these General Terms and Conditions, the Company shall notify the Client of such material change. The Company shall send notice of such changes to its Clients by e-mail to the address provided by the Clients to the Company in the course of entering into the business relationship.

Either party may terminate its business relationship with the Company (by giving 30 days’ notice to the Company at “info@equito.co”) within 8 days of receiving notice of a material change to these General Terms and Conditions. If the Client does not notify the Company of the termination of the business relationship within the aforementioned period, the Client shall be deemed to have accepted the amendments to the General Terms and Conditions.

4. THE BUSINESS RELATIONSHIP AND REMUNERATION FOR SERVICES RENDERED

4.1. Business relationship

Before commencing the provision of investment services, transactions and ancillary investment services, the Client shall enter into an appropriate agreement with the Company for the provision of those services (hereinafter referred to as the “Service Agreement”), whereby the Company and the relevant Client shall define their mutual rights and obligations in relation to the provision of those services by the Company to the Client. The process of concluding the Services Agreement shall be automated and shall in principle take place through a specific investment platform accessible on the website “www.equito.co” (hereinafter referred to as the “Equito Investment Platform”), whereby acceptance of these General Terms and Conditions shall be deemed to constitute a valid conclusion of the Service Agreement unless otherwise indicated. Unless expressly agreed otherwise between the individual Client and the Company, the Service Agreement shall be deemed validly concluded subject to a condition precedent. This condition precedent shall be deemed fulfilled if the Client transfers funds of at least EUR 0.01 to the Client’s cash account or to the account of financial instruments on the Equito investment platform, maintained by the Company in accordance with the provisions of ZTFI-1. Notwithstanding the foregoing, the Service Agreement may also be concluded in writing.

4.2. Fees

The Company charges its clients fees for the provision of investment services, transactions and ancillary investment services in accordance with the applicable Company’s Price List, which is accessible for review at the Company’s registered office and on the Company’s website “www.equito.co”. In respect of services not covered by the aforementioned Service Price List of the Company, the Company and the Client shall stipulate on the scope of services and associated fees in the individual Service Agreement.

PART II – INVESTMENT SERVICES AND ACTIVITIES AND ANCILLARY INVESTMENT SERVICES

1. RECEPTION, TRANSMISSION AND EXECUTION OF CLIENT ORDERS

1.1. Reception of Client orders

Clients may place an order to buy or sell financial instruments exclusively through the Equito investment platform, which is available on the Company’s website “www.equito.co”.

The date and time of receipt of the order shall be deemed to be the date and time of receipt of the client’s automated order confirmation within the Equito investment platform, which is automatically generated immediately after the order has been correctly placed.

The Company accepts orders only in respect of financial instruments in respect of which it has provided services for the placing of financial instruments without a firm commitment basis.

1.2. Types of orders

The Company accepts all types of client orders as defined by the rules of the market in which the client order will be executed.

Orders are sorted as follows:

i. by type of transaction: buy (B) and sell (S) orders;

ii. by place of execution: on an organised market/trading venue (OM), on a non-organised market (OTC);

iii. depending on the price:

a. market order (an order where there is no price limit and it is executed immediately at current market prices and according to the rules of the trading venue where the financial instrument is listed. Market orders are executed immediately at best available price; there is a risk that the price at which the purchase or sale of a financial instrument is executed deviates significantly from the last known price or the last closing price. The Company shall not be liable any losses incurred by the Client in this case);

b. limit order (an order to buy a financial instrument at a price no higher than a certain price or to sell a security at a price no lower than a certain price (called “or better” for both directions); there is a risk that the order will not be executed due to an adverse movement in the price of the financial instrument);

iv. according to the trade execution condition parameters, trading conditions and other criteria, in accordance with the applicable rules in the particular market/trading venue in which the client’s order is to be executed.

v. depending on the period of validity of the order:

a. daily order (an order is only valid on the same day as it is accepted);

b. until cancellation (an order is valid until it is executed on the market or cancelled, but within the timeframe set by the individual organised market/trading venue);

c. up to a specified date (an order is valid until execution or cancellation, or until a specified date, subject to a maximum validity timeframes as provided in the rules of particular market/trading venue).

vi. Subscription and purchase of securities in an offering to the public where the subscription is made with the Company as the authorised investment firm of the issuer for the purpose of providing a service of placing of financial instruments without a firm commitment basis.

For transactions in foreign financial instruments, a client may place orders of the type and under trade execution terms and conditions and with periods of validity parameters as specified by the rules of the market in which the client’s order is to be executed.

The Client’s order shall expire when it is cancelled by the Client in accordance with the applicable regulations and these General Terms and Conditions, or upon the expiry of the validity period specified in the order.

1.3. Place of execution of orders

A client’s buy or sell order in relation to financial instruments traded on an organised market/trading venue shall be executed on such trading venue, unless the client expressly instructs for the specific order to be executed on a non-organised market (OTC).

For the execution of buy and sell orders of clients in relation to negotiable financial instruments outside the organised market/trading venue and the execution of buy and sell orders in relation to financial instruments not traded on an organised market/trading venue, the regulations governing the Company’s obligations when executing orders on an organised market/trading venue shall apply mutatis mutandis.

A list of the execution venues at which the Company executes its clients’ orders is disclosed in the List of Execution Venues, which is accessible at the Company’s registered office and on the Company’s website “www.equito.co”.

1.4. Acceptance of orders by the Company

A Client’s order is accepted when:

i. the Company has received from the Client all information necessary to execute the order; and

ii. the conditions set out in point 1.3 of Part II to these General Terms and Conditions are met, and

iii. the Client meets its obligations to pre-fund the investment account in sufficient amount pursuant to point 1.9 of Part II of these General Terms and Conditions, and complies with any other conditions imposed by applicable law for the execution of the order; and

iv. Client’s order is not rejected in accordance with the provisions of point 1.5 of Part II of these General Terms and Conditions.

If the Company does not reject the order, the order shall be deemed accepted by the Company upon expiry of the time limits for communicating a notification on rejection of orders as set out in the ZTFI-1.

The Company shall transmit the received order to the execution venue as soon as practicable after receipt of the order, taking into account the trading hours applicable to the market for which the order was accepted or the execution venue’s operating hours, and in any event no later than the next Business Day after receipt of the order. An order shall be deemed to have been received by the execution venue when it is received by the execution venue during its own business hours on the business day on which it operates.

1.5. Rejection of Client orders

The Company may reject to accept any order from a Client at its sole discretion, whereas an order will be in particular rejected in the following circumstances:

i. if the Client fails to pre-fund the investment account when placing the Buy Order in accordance with the provisions of Section 1.9 of Part II of these General Terms and Conditions;

ii. if the client fails to ensure that the financial instruments which are the subject of the sell order are held in sufficient amount pursuant to point 1.10 of Part II of these General Terms and Conditions;

iii. in the event of identified conflict of interest or if, in the Company’s opinion, such order or its execution may be against Company’s business policy or in breach of any applicable laws or regulations.

iv. in the event of a conflict of interest or where, in the Company’s assessment, such order or the execution thereof may be contrary to the Company’s business policy or to applicable laws or regulations binding on the Company and/or the Client;

v. in the event of suspected misuse of the Equito investment platform or client identification data within that investment platform;

vi. a client places an order for a financial instrument in respect of which the Company does not accept orders;

vii. in other cases provided for in the General Terms and Conditions, the Service Agreement, relevant laws and regulations applicable to the Company and/or the Client.

The Company shall assess the existence of the circumstances referred to in the preceding paragraph within a reasonable time and shall promptly and reliably notify the client in writing, setting forth the reasons for the rejection. The Company shall not be required to give notice of its refusal to the client before it is deemed to have received the Order in accordance with these General Terms and Conditions.

1.6. Changing and cancelling an order

The client may modify or cancel his order under the same conditions as set out for the placement of the order insofar as the execution of such order can still be prevented by reasonable measures and taking into account the priority ranking in which orders are received. A modification to a client’s order relating to a change in price, an increase or decrease in the quantity of a financial instrument, or adding, modifying or removing a specific order condition shall be deemed a cancellation of the previous order and the placement of a new order.

Orders relating to foreign financial instruments may be modified or cancelled by the Client if permitted by the modification or cancellation procedures imposed by the relevant Execution Venue. An order shall be deemed to have been modified or cancelled when the modification or cancellation is confirmed by the relevant execution venue.

The Company shall be entitled to charge the Client administrative costs in respect of the cancelled order in accordance with the Company’s applicable Price List.

1.7. Receipt of order confirmation

Immediately upon receipt of an order, modification or cancellation of an order, the Company shall provide to the Client, via the Equito investment platform, an order confirmation receipt relating to confirmation, modification or cancellation of an order, containing relevant details in accordance with applicable regulations.

The Client shall be deemed to have received the order confirmation receipt when the entry of the Order Confirmation has been validated in the Equito Investment Platform system.

1.8. Execution of Client orders

The Company shall execute Client orders as they are received, with Client orders of the same type being executed in consecutive order in which they are received. All Client orders shall be recorded in accordance with applicable regulations.

The Company accepts, transmits and executes Client Orders in accordance with the Order Execution Policy (which is accessible at the Company’s registered office and on the Company’s website “www.equito.co”), and in accordance with other relevant regulations and rules applicable to the market on which the financial instrument is traded in relation to a particular order.

1.9. Purchase price

For placing a buy order, the Client shall pre-fund his Equito investment account in 100% of the amount required to purchase the financial instruments and to cover the costs associated with the custodian bank or credit institution.

1.10. Ensuring adequate balance of financial instruments

For placing a sell order relating to domestic financial instruments, the client must ensure that the financial instruments which are the subject of the order are held in the client’s account with the KDD, other central securities depositaries or sub-depositaries.

For placing a sell order relating to foreign financial instruments, the Client shall ensure that such financial instruments are held in the Client’s account with a sub-depositary of the Company or in an account with a domestic or foreign sub-depository or foreign depositary, as the case may be, so that such financial instruments are registered in the Client’s name with a foreign central depository or sub-depositary.

A client’s order to sell is executed when the Company has verified with reasonable certainty that the client has ensured that the financial instruments that are the subject of the order are held in the account or that the client has ensured that the financial instruments are available for disposal free of any encumbrances, unless otherwise explicitly agreed between the client and the Company.

A Client’s sell order of book-entry securities on the organised market/trading venue shall be deemed to include an instruction for the transfer of such securities from the Client’s account with the KDD, other central securities depositaries or sub-depositaries, in order to fulfil the obligation arising from the transaction concluded on the regulated market. A Client’s sell order of foreign financial instruments held by the Company in the Client’s sub-depository account shall be deemed to include an instruction for the transfer of such financial instruments from the Client’s account in the sub-depository account in order to fulfil the obligation arising from the concluded transaction.

1.11. Handling of client financial instruments

The Company shall ensure that on the second business day (T+2) following the

– execution of the order on the organised market, or

– the fulfilment of the seller’s obligation if the sell order was executed on non-organised market (OTC),

the domestic financial instruments purchased by the Company on behalf of a particular Client shall be transferred to that Client’s account held with the KDD, unless the Company and the Client explicitly agree otherwise.

For transactions in foreign financial instruments, the Company shall ensure settlement in accordance with the rules of the market where the order is executed by crediting or debiting the financial instruments to the client’s sub-account of the Company.

1.12. Handling of client money

The Company shall transfer the amount of the purchase price or the unexpended balances from the client’s pre-funded investment account to the client’s cash account, managed by the Company in accordance with the provisions of ZTFI-1, on the next business day following the day on which:

i. receives the purchase price from a sale transaction concluded on behalf of a client; or

ii. clears the purchase transaction or receives the cancellation of the Client’s buy order in respect of which the Client has paid pre-funded the investment account.

On the following business day after the receipt of monetary assets on the exercised rights under the client’s financial instruments, the Company shall transfer such amounts to the Client’s cash account, which the Company maintains in accordance with the provisions of ZTFI-1.

The Company may not use client’s funds for its own account or for the account of other clients.

Notwithstanding the second paragraph of point 1.12 of Part II of these General Terms and Conditions, the Company shall transfer funds, received on the exercised rights under the financial instruments of client as a natural person, to his/her cash account, which the Company maintains in accordance with the provisions of ZTFI-1 within two Business Days after the receipt of such amount.

In the event of the sale of foreign financial instruments, receipt of coupon payments, dividends and other proceeds from foreign financial instruments held with the Company’s client sub-depository, the Company shall ensure that, in accordance with the provisions of the preceding paragraph, the client’s funds are transferred from the Company’s client’ foreign currency account via the Company’s cash account, held with a custodian bank or credit institution in Slovenia to the client’s cash account held by the Company in accordance with the provisions of the ZTFI-1, unless otherwise agreed between the Company and the individual client. In such cases, the date of receipt of the purchase price or redemption of dividends or coupons by the Company shall be deemed to be the date of receipt of the funds in the client’ cash account.

Client funds in the Company’s account held with a custodian bank or credit institution are non-interest bearing in accordance with applicable law.

Before crediting funds to the Client’s cash account, which the Company maintains in accordance with the provisions of ZTFI-1, the Company shall charge the client for all costs and fees and any outstanding liabilities due in accordance with the applicable Company’s Price List and shall credit the client with a correspondingly reduced amount of funds.

1.13. Settlement of transactions in foreign financial instruments

In the process of settlement of transactions in foreign financial instruments, the Company shall only be responsible for the timely transmission of appropriate instructions to the foreign clearing firm or custodian bank or other competent institution, on the basis of which the settlement of the concluded transactions in foreign financial instruments may be effected. The Company shall not be liable for any delay in the settlement of a transaction in foreign financial instruments or any failure to settle a Transaction due to the default of the counterparty to the transaction, nor for the non-delivery of the relevant financial instruments by the counterparty. In the case of DVP (delivery versus payment) settlement methods in foreign markets, the Company does not guarantee the timely delivery of the financial instruments and warns the client that the transaction may be cancelled later due to the counterparty’s non-performance.

1.14. Transaction accounting

No later than the next business day following the fulfilment of the obligations from the transaction it concluded on behalf of the client, the Company submits to the client an accounting statement of the completed transaction, which shall be accessible on the Equito investment platform. If the Company has entered into a transaction for a Client through an execution venue, the Company shall send an accounting statement to the Client no later than the next Business Day following the receipt of the accounting statement from the execution venue in relation to such transaction.

The Client shall be deemed to have received the accounting statement of an executed transaction when the entry of the statement has been validated in the system of the Equito investment platform.

2. PORTFOLIO MANAGEMENT OF FINANCIAL INSTRUMENTS

2.1. Portfolio management services agreement

Prior to the commencement of the provision of the portfolio management services, the Company and the Client shall enter into a written agreement, of which these General Terms and Conditions shall form an integral part, pursuant to which the Company shall buy and sell financial instruments for the account of the Client and shall execute the settlement of the obligations arising from such transactions.

The portfolio management service Agreement shall provide at least for:

– the amount of cash that the client delivers for management under the contract,

– the investment policy,

– the amount of the commission and the method of calculating the commission base(s).

An individual portfolio management services agreement may contain additional provisions which affect only the contract in question.

By signing the portfolio management services agreement, the Client agrees and authorises the Company to manage the Client’s funds at its discretion, in accordance with the investment policy set out in the Agreement and the General Terms and Conditions, and to make the necessary representations or certifications and to take such other action as may be necessary or advisable for the management of the Client’s funds. The Company may, in accordance with the Execution Policy, make decisions to trade and execute orders outside an organised market or MTF multilateral trading facility only if it obtains the Client’s express consent to do so in accordance with Article 269 of the ZTFI-1. Such consent may be given by the client either as general consent in respect of all orders or as specific consent in respect of the execution of a particular order. The firm shall publish annually a summary of the top five venues where it has executed the most trades for clients in each financial instrument, together with the information on the quality of the executions referred to in Article 267 of ZTFI-1.

Unless otherwise provided in the portfolio management services agreement or these Terms and Conditions, by signing the portfolio management services agreement, the Client waives any claim to, or disposition of, the assets it has placed at the Company’s disposal subject to the terms and conditions set out in these General Terms and Conditions.

The portfolio management services agreement, supplement, request for payment or other document shall be effective from the date of receipt by the Company.

The Client agrees that all funds received by the Company from purchases and sales of Financial Instruments on its behalf shall be applied by the Company through the portfolio management account to the sale and purchase of Financial Instruments for the account of that Client.

The Company shall, in principle, manage the Client’s funds without specific instructions from the Client. If the client nevertheless wishes to give a specific instruction, the Company may comply with it if it is in writing and the client shall be fully responsible for its instructions and the consequences of the Company’s actions based on such instruction. The Client shall also bear full responsibility for the choice of investment policy and the consequences of such choice. By giving specific instructions, the Client acknowledges that such instructions may result in deviations from the originally agreed investment policy of each Portfolio and accepts such deviations. Declarations of explicit prohibitions on the purchase of certain financial instruments due to certain personal circumstances/involvement on the part of the client shall also be considered as client instructions.

The portfolio management agreement also stipulates the manner of opening and maintaining the client’s financial instrument account or the management of the sub-depository of financial instruments. Financial instruments traded on organized markets by clients are held in collective management accounts managed by the Company or sub-depositories at custodian banks. The Company establishes and manages the sub-depository of financial instruments for the client within its own analytical records for those financial instruments held in a central depository or other central depository in its name for clients. The Company manages the sub-depository of financial instruments in accordance with the Rules for Managing the Sub-depository.

2.2. Portfolio management service fees

The Company is entitled to the following fees for providing portfolio management services under these general terms:

a) Management fee for client funds, as determined by the agreement,

b) Any share of the excess from managed assets, as determined by the agreement, due on the valuation date of any excess under these general terms,

c) Entry and exit costs as defined in the contract,

d) Reimbursement of any taxes, fees, and other charges paid by the Company on behalf of the client,

e) Costs of trading, settlement, and any other costs related to transactions with financial instruments in the portfolio,

f) Any other costs as determined by the Company’s price list, these general terms, or the contract.

Payments for the portfolio management of financial instruments are specified in each respective contract for the management of financial instruments. If such payments are not specified in individual contracts or these general terms, their amount is determined by the price list, which is an integral part of the contract.

2.3. Transfer of Managed assets to the Client

The client is entitled to request the transfer or release of part or all of the financial instruments or cash. A request for payment or transfer of assets under the portfolio management agreement must be made in writing on the prescribed form, with the Company conducting identification in accordance with the applicable legislation. In this case, the Company is obliged to transfer or release the requested financial instruments or cash to the client, and the client must accept or take over the requested financial instruments or cash within 10 (ten) working days from the date the Company receives the complete and correct client request, unless transfer is not possible due to non-compliance or delay by a third party over whose business the Company has no control.

2.4. Performance by a Third Party

If third parties fulfill their obligations from transactions concluded by the Company on behalf of the client directly to the client, the client must immediately inform the Company thereof. In this case, the funds received by the client from third parties shall be deducted from the remaining client funds under management at the Company and considered as a transfer or release of the share of assets under the previous article of these general terms, with all legal consequences arising therefrom.

2.5. Termination of Portfolio Management Agreement

Both contractual parties may terminate the management agreement in writing. Upon termination of the agreement in accordance with the relevant regulations, all outstanding client obligations under the contract for the last period before termination of the agreement become due. If the management agreement does not specify otherwise, the Company is obliged after the termination of the agreement to transfer or release to the client, and the client to accept or take over, all assets under management, with the Company usually transferring assets in the form in which they are at the time the Company sends a written termination to the client or at the time the Company receives written termination from the client. The client may request the transfer of cash assets, and the Company will consider such a written request only if the client includes it in its written termination or provides such a request within five working days from the day it received the Company’s written termination.

A request for payment or transfer of all assets under the portfolio management agreement is considered a termination of the contract.

The contractual parties agree on the duration of the contract and the conditions for termination or withdrawal from the contract in cases not mentioned in these general terms in the contracts or applicable provisions of contract law.

The provisions of the contract on costs and fees related to obligations arising before termination shall continue to apply despite the termination of the contract.

2.6. Distribution of Excess from Management

The parties shall stipulate in the portfolio management agreement the method of distribution of any surplus funds.

In the event of the distribution of excess from portfolio management above the highest achieved value (high-water mark), the basis for calculating the distribution of excess after the settlement of costs on the valuation date and before the last distribution of excess shall be the amount of funds deposited or the highest achieved value of the portfolio, as determined by the settlement.

The methodology for calculating the distribution of excess is available to clients at the Company’s headquarters.

2.7. Determination of the Value of Financial Instruments

The value of financial instruments is determined daily in the Republic of Slovenia according to the following rules:

a.) Shares and shares of investment companies are valued at the last known price (i.e., the closing price of an organized market for financial instruments or another comparable price published by the market organizer as a result of transactions). Investment coupons or shares of target funds are valued by multiplying the number of units of assets or shares of the target fund by the value of the unit of assets or the value of the share of the target fund, excluding transaction costs that may arise upon sale or other disposal.

b.) In the valuation of debt instruments and interest-bearing financial instruments, interest is calculated and credited in accordance with the conditions set by the issuer at the issuance of the financial instrument. The last known value (indication of interest) is used for valuation, as reported by Interactive Brokers or other designated investment service provider.

c.) Zero-coupon bonds are treated the same as interest-bearing bonds. They are shown at the discounted nominal value, and interest accrues daily in accordance with the conditions set by the issuer at the issuance.

d.) Money market instruments (treasury bills, commercial papers) are valued at the discounted nominal value together with interest, in accordance with the conditions set by the issuer or at the closing price of the organized market, if the money market instruments are traded on an organized market.

e.) Financial instruments traded on organized markets are valued at the market rate where they were purchased. In the event of continuous operation of the organized market for financial instruments, the last rate of this market at the end of the day (at midnight) for which the valuation is performed is considered.

f.) Financial instruments not traded on organized markets are valued at cost or using a valuation model determined by the Company.

2.8. Reporting

The Company, providing portfolio management services for the client, shall send a report on the state of its investments with a transaction statement, at least once every three months, based on the state on the last day of the quarter.

Notwithstanding the previous paragraph, the Company shall notify the client, for whom it provides portfolio management services, in cases where the total portfolio value, as assessed at the beginning of each reporting period, decreases by 10% and then multiples of 10%, no later than the end of the working day following the date of the assessment of the total portfolio value.

2.9. Determination of Investment Policy and Management Criteria (Benchmark)

Based on the client’s investment profile, the Company proposes the selection of specific portfolios with investment policies and corresponding benchmarks (hereinafter: benchmark) defined in each respective portfolio management agreement.

In case of changes in investment policies and/or benchmarks, the Company informs the client according to the agreed communication method. If the client does not respond to the Company’s request to amend the contract due to changes in policies and/or benchmarks, the Company will apply the amended investment policy and/or benchmark until the contract is signed, all in the best interest of the client.

The investment policy includes at least:

– types of financial instruments,

– characteristics of financial instrument issuers,

– maximum permissible percentage of investments in financial instruments of each type,

– other circumstances relevant to determining the level of investment risk.

The Company does not icorporate sustainability preferences when providing portfolio management services.

2.10. Management of book-entry Securities Accounts

With the portfolio management agreement, the contracting parties also agree on the method of opening and managing the client’s financial instrument account or managing the sub-depository of financial instruments.

The Company is obliged to open the account no later than three working days after the conclusion of the portfolio management agreement, provided that all data or personal data of the holder and beneficiary stated in the contract are consistent with the data at the custodian or sub-custodian and that the Company has the client’s tax number. The Company calculates fees and charges related to the account management contract in accordance with the applicable price list.

2.11. Management of Foreign Issued Financial Instruments Accounts

In accordance with regulations and the organization of the management of accounts of individual local markets, the Company manages or ensures the management of clients’ financial instruments issued abroad:

a) in its name and on behalf of clients through a special account of the Company at the central depository of the local market or at the Company’s sub-custodian, which manages these financial instruments in the foreign market, or

b) directly at the central depository of the local market, if local legislation allows the opening and management of client financial instrument accounts in the name of the client at the central depository and the client requests this from the Company.

The Company performs the service of managing accounts in such foreign markets and to such an extent as it can provide through a network of selected foreign sub-custodians and central depositories or third parties, in accordance with its business policy, relevant regulations, and market practices of each market. The client is aware that all costs arising from the organization and implementation of such entry of ownership burden the client, and the Company is entitled to charge its costs related to the organization and implementation of such entry of ownership.

2.12. Sub-custody and Risks Related to the Management of Financial Instruments and Cash

The Company manages or ensures the management of the sub-custody of financial instruments for the client in accordance with the rules of the sub-custody within its own analytical records for those financial instruments managed in its name and on behalf of clients in the central depository through its account or through another intermediate sub-custodian, unless the client expressly requests the Company to manage financial instruments and cash on a separate account of the client.

The Company informs the client that in cases where the client’s financial instruments and cash are managed in the name and through the client’s account directly at the central depository, costs may be higher, but risks may be lower. Costs for managing a client’s financial instrument through the Company’s name and account are usually lower, but risks may be higher, including:

– due to actions or omissions of the central depository or intermediate sub-custodian or third party through which client cash assets are managed, there may be a deficiency of financial instruments in the Company’s sub-custody or cash in its analytical records;

– when based on individual national legislation, financial instruments or client cash (hereinafter referred to together as assets) managed by a third party cannot be identified separately from other assets, fulfillment risks for the client are greater;

– if the management of a client’s asset account is subject to legislation in a jurisdiction other than an EU Member State, the client’s rights with respect to those assets may differ;

– the sub-custodian through which the client’s assets are managed may have the right to enforce or pledge with respect to those assets.

The Company is not responsible for any legislative possibilities to enforce security rights under individual national legislation. Likewise, the Company is not responsible for the actions, omissions, or insolvency of the central depository or sub-custodian or third party through which the Company manages client assets in its name and on behalf of the client, and for any deficiencies in the assets mentioned above. In cases from the previous paragraph, the Company, on behalf of the client and at the client’s expense, enforces claims for damages and other claims against the responsible person or transfers the mentioned claims to the client.

2.13. Settlement of Financial Instruments and Cash

On markets where, due to the characteristics of such markets, settlement is only possible upon the fulfillment of additional conditions, the Company may require the client to arrange certain documentation or other actions before trading begins on a particular market.

3. INVESTMENT ADVICE

3.1. Information on Investment Advice

Equito Ltd. provides clients with independent investment advisory services, under which:

– Equito Ltd. will not accept payments, inducements, or other (non-)monetary benefits from issuers, intermediaries, or third parties that could benefit from recommending financial instruments to clients, except for possible minor non-monetary benefits that could contribute to enhancing the quality of the provided service, and which, considering the scope and nature of the incentive, cannot be considered a benefit that would breach the obligation of the company to act in the best interest of the client, provided that the client is clearly and comprehensively informed thereof;

– Equito Ltd. will not recommend financial instruments issued by issuers for which it has carried out initial or subsequent placement of financial instruments in accordance with Article 11, paragraph 7 of the Financial Instruments Market Act (ZTFI-1), or financial instruments issued by issuers for which it has provided services in accordance with Regulation (EU) 2020/1503 (Regulation on crowdfunding services);

– Equito Ltd. will not recommend its own financial instruments or financial instruments of affiliated companies to its clients in the course of providing investment advisory services, nor in other investment services or services related to crowdfunding.

– Equito does not take sustainable preferences into account when selecting financial instruments to recommend to clients in the context of investment advisory services, nor in other investment or crowdfunding services.

The Company, in providing investment advisory services, establishes and implements a selection process to assess and compare a sufficiently large range of financial instruments available on the market, whereby the selection process includes the following elements:

– the number and diversity of financial instruments considered are proportionate to the scope of the investment advisory services offered by Equito Ltd.;

– the number and diversity of financial instruments considered are appropriately representative of the financial instruments available on the market;

– the quantity of financial instruments issued by the investment firm itself or entities closely linked to the investment firm is proportionate to the total quantity of financial instruments considered; and

– criteria for selecting different financial instruments include all relevant aspects such as risks, costs, complexity, and characteristics of the client’s investment firm, and the selection of instruments that may be recommended is not biased.

3.2. Investment Advisory Agreement

The Company and the client shall enter into an investment advisory agreement, to which these general terms form an integral part, before commencing the provision of investment advisory services.

The investment advisory agreement is:

a. an agreement under which the Company undertakes, on behalf of the client throughout the term of the agreement, to provide individual investment advisory services in the form of investment advice and personal recommendations on individual financial instruments, with the aim of providing the client with expert assistance in making economically efficient financial decisions regarding the management of assets managed by the client itself,

b. an agreement under which the Company undertakes, on behalf of the client throughout the term of the agreement, to provide the client with individual investment advisory services in the form of investment advice and personal recommendations, which may include the preparation of geographic analyses, sector analyses, company analyses, and any other services agreed upon exclusively for the purposes of investment cooperation with the relevant client, considering the circumstances and objectives of the client,

c. an agreement under which the Company undertakes, on behalf of the client, to perform certain services in the form of investment advice that do not fall within the scope of services under the preceding points of this paragraph.

Depending on the scope and complexity of the investment advisory services provided by the Company, the client and the Company agree on the payment of compensation and costs for the investment advisory service in each individual contract.

Analysis and investment research intended for distribution channels and the public, including publication on websites, and any other recommendation that, in accordance with applicable regulations, is not considered a personal recommendation, are not considered investment advice. A recommendation is not a personal recommendation if it is made exclusively through distribution channels or the public.

The Company is not liable for the consequences of decisions made by the client based on investment advice.

4. PLACEMENT OF FINANCIAL INSTRUMENTS

4.1. Placement agreement for the execution of a first sale or subsequent resale of financial instruments

The Company and the Client shall stipulate in a separate agreement the terms and conditions and their mutual rights and obligations in relation to the provision and execution of placement services in respect to the first sale or subsequent resale of financial instruments without the Company having an obligation to buy any of the financial instruments that could not be sold to the public.

5. SAFEKEEPING AND ADMINISTRATION OF FINANCIAL INSTRUMENTS FOR THE ACCOUNT OF CLIENTS

5.1. Safekeeping and administration of financial instruments

The Company provides custody and administration services exclusively in respect of financial instruments in respect of which it has provided placement services in respect to the first sale or subsequent resale of financial instruments without the Company having an obligation to buy any of the financial instruments that could not be sold to the public.

5.2. Opening a client account with the KDD

Prior to entering a new client account with the central securities depository register at KDD, the Company shall conduct a Client identification as set out in Section 2.1 of Part I of these General Terms and Conditions.

Provided that the Company is registered as a system member of the KDD and in the case of trading in securities whose issuer is registered in the Republic of Slovenia and whose securities are registered with the KDD, the Company shall open a client’s account with the KDD no later than within three business days following a client’s request. In addition to the foregoing conditions, the Company shall open the Client’s account with the KDD only if all the Client’s data specified in the Service Agreement are in line with the data with the KDD.

The Company may close a client’s account with the KDD in which no financial instruments are recorded if the duration for which the client has paid the fee or the costs of maintaining the account has expired.

If a client who does not reside or have its registered office in the Republic of Slovenia does not wish to close the client’s financial instruments account upon the sale of the entire portfolio of securities in the client’s financial instruments account, the Company shall have the right, upon the fulfilment of its payment obligation to the client in respect to the sell order, to retain in the client’s financial instruments account monetary assets in amount equivalent to one year’s expenses related to the client’s financial instruments account for the period from the sale onwards.

5.3. Transfer of book-entry securities

The transfer of book-entry securities between accounts of the same holder, the transfer of book-entry securities between accounts of different holders and the registration of third-party rights in book-entry securities shall be carried out by the Company on the basis of the corresponding client’s instruction, which shall be in accordance with the relevant guidelines of the KDD, other central securities depositaries or sub-depositaries. The Client shall be obliged to transmit the instruction through the Equito investment platform. The Company does not accept any other method of order/instruction transmission.

A Client’s instruction for the transfer or registration/cancellation of a third party’s right shall be deemed complete when the Client pays a fee in accordance with the Company’s applicable Price List for the transfer, registration or cancellation service and provides supporting documents necessary to prove a legal basis for the requested transaction. The Company shall decline an instruction for transfer or for registration/deletion of a third party rights if the Client fails to duly supplement the instruction details no later than on the 15th day following the day on which such (incomplete) instruction is submitted to the Company.

The Company shall not be obliged to comply with the Client’s instructions to transfer book-entry securities or to register third-party rights if the Client’s account with the KDD, other central securities depositaries or sub-depositaries, does not maintain sufficient amount of book-entry securities.

5.3. Transfer of book-entry securities

5.4. Order of instructions

The Company shall submit to the KDD instructions for transfers from the Client’s account or instructions for the registration/cancellation of third-party rights in the Client’s domestic securities according to consecutive order of receipt of complete instructions for transfer or registration/ cancellation of third-party rights.

The Client’s instruction shall be deemed to have been received when the Company, through the Equito investment platform, has received from the Client all the required information and supporting documents necessary for the entry of a complete transfer instruction in the Central Securities Depository Register at the KDD and when the conditions set out in the preceding paragraph of these General Terms and Conditions have been met.

5.5. Informing clients about their account balance with KDD

Once a year, the Company will provide the client with a statement of the balance and annual turnover on the client’s account with KDD, unless shorter notification periods have been agreed with the customer. At the Client’s request and against payment of a fee in accordance with the Company’s applicable Price List, the Company shall provide the Client with a statement of the turnover on the Client’s account with KDD for the requested period and the new balance as at the date of the statement. Such statement shall be provided on the next business day following the receipt of the client’s request.

5.6. Foreign financial instruments sub-depository

For the purpose of providing transmission and execution of orders services in relation to foreign financial instruments to the Client, the Company shall open a sub-depository account, on which the client’s foreign financial instrument balances are administered in the name and on behalf of the Client. In this respect the Company shall enter orders for the transfer of such financial instruments from the Client’s account to another account, or for the registration or cancellation of third party rights.

The sub-depository shall maintain the financial instruments of clients held by the Company in its own name and for the account of its clients through its account with the central securities depository or through another intermediate sub-depositary. Within the sub-depositories, the Company shall create a separate sub-depository for each client in which it shall keep separate records of that client’s financial instruments so that it can distinguish at any time and without delay between that client’s financial instruments and financial instruments held for other clients.

The maintenance of the Client’s foreign financial instruments account in the sub-depository shall be subject to the Sub-depository rules applicable and in force at the time, which are accessible at the Company’s registered office and on the Company’s website “www.equito.co”.

5.7. Sub-depository of units of collective investment undertakings

For the purposes of executing orders and dealing in units of collective investment undertakings, the Company shall open a sub-depository account for the client, in which it shall hold the balances of the units of collective investment undertakings in the name and on behalf of the client and shall enter orders for the transfer of such financial instruments from the client’s account to another account or for the registration or cancellation of third-party rights.

The sub-depository shall maintain units of collective investment undertakings of clients held by the Company in its own name and for the account of its clients, through its account with the central depositary of the issuer of those financial instruments. Within the sub-depositories, the Company shall create a separate sub-depository for each client in which it shall keep separate records of that client’s financial instruments so that it can distinguish at any time and at any moment between that client’s financial instruments and the financial instruments it holds for other clients.

The maintenance of the Client’s units of collective undertakings account in the Sub-Depository shall be subject to the Sub-Depository Rules applicable and in force at the time, which are accessible at the Company’s registered office and on the Company’s website “www.equito.co”.

5.8. Foreign financial instruments held in a central depository

If the relevant legislation allows for the opening and maintenance of accounts for the Client’s foreign financial instruments in a central depository, the Company shall, at the specific request of the Client, open such an account if the Company is a member of such central depository. Otherwise, the Company shall ensure that such an account is opened and maintained by a member of the central depository.

The Client hereby acknowledges and understands that:

i. costs are higher when foreign financial instruments are held in the client’s name through the client’s account at a central depository, but the risks are lower.

ii. costs are lower but risks are higher when foreign financial instruments are held in the same central custodian in the name of the Company and for the account of the client, either through the Company’s account in that depository or through the account of a sub-depositary.

If the Client chooses to open and maintain a foreign financial instruments account with the central depository, the Company and the Client shall agree on the terms and conditions of such operation in the Services Agreement.

5.9. Separation of client assets from the Company’s assets

The Company shall keep Client funds in a special Client cash account opened with a credit institution, which shall not be considered as assets of the Company and shall not form part of the bankruptcy estate in the event of the Company’s bankruptcy. Through this account, the Company shall receive deposits and make withdrawals in respect of transactions entered into on behalf of its Clients.

Financial instruments held in the Company’s accounts, in Client accounts with the KDD and for the account of Clients in the sub-depository do not constitute assets of the Company and do not form part of the Company’s assets in the event of the Company’s bankruptcy.

5.10. Warnings

The Company shall not be liable to clients for any acts, omissions and any consequences resulting from acts and omissions which are (in whole or in part) caused by events or circumstances beyond the Company’s control, including failure of telecommunications facilities, malfunctions in the operation of systems in the financial instruments markets, conduct of third parties such as CSDs, credit institutions, central depositaries, sub-depositaries, execution venues, etc.

In relation to the management of client’s financial instruments through a central depositary or an intermediate sub-depositary, the Company shall not be liable for the acts or omissions of the central depositary or intermediate sub-depositary with which it manages client’s financial instruments in its own name and for the account of its clients. The acts or omissions or insolvency of such persons/entities may result in a loss or shortfall of financial instruments held by the Company’s sub-depositories and the Company shall not be liable for any such losses. Notwithstanding the foregoing, the Company undertakes, for the account of the Client and at the Client’s expense, to pursue appropriate claims for damages and other claims against the responsible person or to assign such claims to the Client if the Client submits such requests.

The acts or omissions or insolvency of a credit institution may result in a shortage of cash balances in Clients’ cash accounts, whereby the Company shall not be liable for such losses.

Where, under a particular national law, a client’s financial instruments and cash held by a third party cannot be identified separately from other financial instruments held by that third party, there is a risk of a change in the client’s rights in relation to those client financial instruments and cash balances.

Where a third party through whom a client’s financial instruments and cash are held has a right of enforcement or a lien in respect of those financial instruments or cash, there is a risk that the client’s rights may be altered in respect of those client financial instruments and cash balances.

The Client acknowledges that where the client’s Financial Instruments and client’s balances are held and maintained in a Central Depository for the account of clients, either through its own account in a Central Depository or through another intermediate depositary, it may be subject to the regulations of a country that is not an EU Member State, which may alter the Client’s rights in respect of such Financial Instruments or client’s monetary assets.

6. ADVICE TO UNDERTAKINGS ON CAPITAL STRUCTURE, INDUSTRIAL STRATEGY AND RELATED MATTERS AND ADVICE AND SERVICES RELATING TO MERGERS AND THE PURCHASE OF UNDERTAKINGS

6.1. Advisory services contract for companies on capital structure, business strategy and related matters and for services in connection with mergers and acquisitions

The Company and the Client shall stipulate the terms and conditions and their mutual rights and obligations in relation to the provision of advisory services to companies on capital structure, business strategy and related matters, as well as consulting and associated services in relation to mergers and acquisitions of companies, by means of a separate written agreement for placement of financial instruments.

PART III – FINAL PROVISIONS

1. INFORMING CLIENTS OF THE COMPANY’S ACTS

1.1. General Terms and Conditions acknowledgement

By entering into the Services Agreement, the Client confirms that it is aware of and fully accepts the contents of these General Terms and Conditions (and any Annexes), which together with any Annexes form an integral part of the relevant Services Agreement.

1.2. Acknowledgment of the Company’s policies

By entering into the Services Agreement, the Client confirms that he/she has reviewed and understands the contents of the following acts of the Company and that he/she accepts them in full:

i. Client categorisation policy;

ii. Order execution policy;

iii. List of execution venues;

iv. Conflicts of interest management policy;

v. Information on the investor compensation scheme;

vi. Sub-depositary rules;

vii. Rules on handling client complaints and the out-of-court dispute settlements; and

viii. Company’s Price list.

2. APPLICABLE LAW AND DISPUTE RESOLUTION

2.1. Applicable law

Slovenian law shall apply to the interpretation and enforcement of the rights and obligations of the Client and the Company under the Services Agreement and these General Terms and Conditions, unless the application of another law is mandatory in relation to specific areas of the Company’s business.

2.2. Dispute resolution

Disputes between the Client and the Company shall be settled in accordance with the Rules on handling client complaints and the out-of-court dispute settlements. The referenced Rules are available for review at the Company’s registered office and on the Company’s website “www.equito.co”.

Disputes that cannot be resolved in accordance with the provisions of Rules on handling client complaints and the out-of-court dispute settlements shall be settled by a court of competent jurisdiction in Ljubljana, Slovenia.

3. VALIDITY

3.1. Entry into force

Unless otherwise agreed, these General Terms and Conditions shall constitute an integral part of the Service Contract between the Company and the Customer, effective from and including 5 July 2024. Upon coming into effect, these General Terms and Conditions shall fully replace any prior versions thereof.

ANNEX 1: DESCRIPTION OF FINANCIAL INSTRUMENTS AND RISKS

1. Introduction

The description of the risks associated with investments in financial instruments offered by Equito, brokerage company, Ltd. (the “Company”) is intended for clients and potential clients of the Company. The purpose of the description is to provide information and warnings about the risks associated with financial instruments that a client may buy, sell or order, or in relation to which the client may carry out other types of transactions through the Company. Risk is understood as the failure to achieve a certain expected return on the capital invested and/or the loss of the capital invested up to its total loss, the basis for which may be various causes related to the financial instruments, the markets or the issuers of these instruments. These risks cannot always be foreseen in advance and therefore the statements in this description cannot be considered as definitive.

The purpose of this description is not to provide information on all the risks that may arise in the provision of services with financial instruments, but rather to provide information on the risks that enables the client to understand the nature of these risks in particular when making investment decisions. The Company also advises the client to read carefully the additional disclosures about that financial instrument or service before making a decision in relation to a particular investment service or transaction.

The statements in this description do not constitute advice by the Company on potential investments and shall not be understood as a recommendation by the Company to provide any investment service. The descriptions contained herein do not constitute an offer by the Company to the Client in respect to the provision of any investment service and is therefore not a substitute for the Client’s due diligence of the specific product.

2. General risks

Financial instruments are not the same as bank deposits and, when purchasing them, the investor assumes the risk that, due to adverse conditions in global capital markets, changes in the business or creditworthiness of the issuer of the financial instrument, money and currency market conditions, interest rate movements, it will achieve a lower price on the sale of the financial instrument than was paid for it at the time of purchase.

The price of a financial instrument or the value of a client’s investment may also depend on the global political situation, the political situation in a region or country, natural and ecological disasters, wars and other emergencies, crises and other changed circumstances, and any other causes.

The investor is exposed to the risk of default by the issuer; and other risks arising from market conditions, as described below.

2.1 Market risk: The value of financial instruments changes over time, reflecting the supply and demand for each financial instrument, but a given market value does not necessarily reflect the actual value of a particular financial instrument.

2.2 Currency or exchange rate risk: is the risk that the currency in which financial instruments held by a client are issued will lose value against its home currency.

2.3. Liquidity risk: is the risk that, due to a lack of demand, which may be influenced by a number of different factors, a financial instrument cannot be sold at a given point in time, or can only be sold at a lower price or on weaker terms.

2.4. Credit risk: is the risk that the issuer of a financial instrument or its counterparties will fail to meet their obligations under the financial instrument at or at any time after the payment due date. This risk includes the risk that the value of the financial instrument will decline as a result of a higher probability of default, most commonly reflected in a downgrade of the credit rating of the debt instruments of such an issuer.

2.5. Interest rate risk: is the risk inherent to bonds and other debt securities whose value varies according to movements in interest rates. When interest rates rise, the value of debt investments generally falls; conversely, when interest rates fall, the value of debt investments generally rises. Debt securities with higher interest rate sensitivity and longer maturities tend to be more profitable, but their value tends to fluctuate more.

2.6. Operational risk: is the risk of loss due to the following circumstances: inadequacy or malfunctioning of internal processes, other malpractice by persons within the Company’s internal business area, inadequacy or malfunctioning of systems within the Company’s internal business area, or external events or actions.

2.7. Inflation risk: is the risk that the real return on an investment will be lower than expected, meaning that the purchasing power of savings at the time of withdrawal (cashing in) will be lower than expected.

2.8. Regulatory change risk: is the risk that the Republic of Slovenia or the countries in whose capital markets the client invests assets may experience an adverse change in regulations, including a change in tax regulations and any type of restriction on capital flows with foreign countries, which may adversely affect both the liquidity and the value of investments in the capital markets.

3. A description of the financial instruments and specific risks

The Company offers the possibility to invest in the following financial instruments:

– transferable securities

– money market instruments

– units in collective investment undertakings,

– options, futures, swaps, forwards and other derivative transactions relating to securities, currencies, forward rate agreements, emission coupons or yields as underlying instruments or other derivatives, financial indices or other financial benchmarks that can be settled by the transfer of the underlying instrument or by a cash payment,

– options, futures, swaps, forwards and other derivative transactions relating to commodities as underlying instruments which: must be settled by cash payment or may be settled by cash payment at the option of one of the parties, except for default of the other party to the contract or other reason for termination of the contract,

– options, futures, swaps and other derivative transactions relating to commodities as underlying instruments which may be settled by the transfer of the underlying instrument, provided that they are traded on a regulated market, MTF or OTF, as the case may be, with the exception of wholesale energy products traded on an OTF which must be settled by the transfer of the underlying instrument,

– options, futures, swaps, forwards and other derivative transactions relating to commodities as underlying instruments which: may be settled by the transfer of the underlying instrument and are not listed in the previous point and have no commercial purpose but have the characteristics of other derivative instruments.

which are associated with the specific risks described below.

4. Shares and other types of equity securities

A share is an equity financial instrument. According to the rights attached to the shares, there are ordinary (ordinary) shares and preference shares, which give their holders certain preferential rights (e.g. priority in the payment of dividends, in the payment of distributions in the event of the liquidation of the company, etc.). Shares can be registered or bearer shares.

The return on an equity instrument consists of the dividends paid, which are decided by the owners of the company in general meeting, and the differences in the share price that arise when the share is bought and sold. The difference may be positive or negative and cannot be predicted with certainty.

Shares are exposed to all the main types of risk set out in this document. In addition to these risks, shares are also subject to the risk of volatility or problems in the sector of the company concerned. If a company is unlisted and its shares are not traded on a stock exchange, or if it is listed and its shares are rarely traded, there may also be liquidity risk, which can make it difficult to sell the shares. The risks associated with investing in shares are mainly:

– the loss associated with a decline in share prices, given that past returns are no guarantee of future ones;

– the risk that the issuer will not achieve expected future operating results;

– the risk of bankruptcy or insolvency of the issuer;

– the risk of other changes in the economy beyond the control of the issuer that may cause the value of the investment to change;

– market risks, such as changes in interest rates, measures and changes in legislation, in particular in the area of money and capital market regulation, taxes and international capital flows;

– natural and environmental disasters, wars and other conflict situations, or other cases of force majeure;

– lack of demand for the share (liquidity risk);

– if the share is denominated in a foreign currency, the investor also bears the currency (exchange rate) risk.

An investment in shares does not contain leverage. By buying shares, the investor risks losing the entire investment. In the event of the winding-up of the issuer’s business, the shareholder is entitled to an appropriate share of the liquidation estate and, in some cases, the bankruptcy estate.

Other types of equity securities are e.g. equity certificates, global equity certificates, warrants, etc. and the risks associated with these securities are reasonably the same as for shares.

5. Bonds and money market instruments

A bond is a debt security with a fixed or variable interest rate, whereby the issuer obliges the holder to fulfil a pre-agreed plan at maturity or to pay the principal and interest already during the term of the bond. The return on the bond consists of interest on the capital invested and the difference between the purchase and sale price of the bond. Bonds are, on average, a safer investment than shares because they have priority for repayment in the event of the company’s liquidation.

The yield can only be pre-determined if the holder keeps the bond to maturity and it has a fixed interest rate. The yields on floating-rate bonds cannot be fixed in advance. Also, the selling price is not known in advance and may differ from the price used to calculate the expected yield, so the expected and realised yields may differ. Any transaction costs must also be deducted from the realised return.

In addition to highly rated bonds, such as those issued by various countries, local authorities and well-managed companies, there is also a segment of bonds issued by low-rated companies and institutions. The latter are among the riskier forms of investment as they have an increased or high probability of default. When the expected bond yields exceed normal yields, careful consideration should be given to the credit risk of the issuer.

In particular, the risks associated with buying bonds include:

– default by the issuer;

– credit risk;

– interest rate risk;

– changes in the economy beyond the control of the issuer;

– liquidity risk;

– market risk;

– currency risk.

By buying a bond, an investor may risk losing the entire investment, especially when buying bonds with a low credit rating. If particular bonds are also traded on an exchange, the prices formed on the exchange may deviate significantly from the prices formed off the exchange. Limit orders can limit the risk of a shallow market.

6. Money market instruments

Money market instruments are all types of instruments normally traded on the money market, such as treasury bills, certificates of deposit and commercial paper, except payment instruments. The risks associated with the purchase of money market instruments are reasonably equivalent to the risks mentioned for the risks associated with the purchase of bonds. The most important risks are the risk that the issuer will fail to pay principal and interest and the risks associated with a decline in the market price of the instrument. Similarly to bonds, there is a possibility that losses on the overall investment are very small.

7. Units in collective investment undertakings

An investment fund is a collective investment undertaking the sole purpose of which is to accumulate the assets of investors and, in accordance with a predetermined investment policy, to invest them in different types of investments for the exclusive benefit of the unit-holders of that investment fund. The investment fund shall collect assets either publicly or non-publicly. An investment fund shall be a collective investment undertaking for investment in transferable securities (hereinafter referred to as ‘UCITS’) or an alternative investment fund (hereinafter referred to as ‘AIF’).

UCITS funds are divided into investment coupons and AIF funds into investment units or units, the records of which are kept by the manager of such funds. An investment coupon is a security issued by a management company/manager managing its own investment fund and is registered in respect of one or more units of the investment fund. The holder of an investment coupon shall have the right to require the management company/manager to pay the value of the units of the investment fund to which the investment coupon relates. The risks associated with the purchase of units of investment funds are in particular the risks associated with a decline in the value of the units of the investment fund (as past returns are no guarantee of future returns), uncertain profit-sharing and the risk of being unable to make distributions from the value of the assets of the investment fund. The investor risks losing the entire investment by purchasing units of investment funds.

Units/shares of some (foreign) funds may also be traded on a regulated market (so-called Exchange Traded Funds – ETFs). ETFs typically contain a basket of securities (e.g. a basket of shares) that mimics the composition of an index, i.e. it tracks an index in a security by using the securities contained in the index and their current weighting in the index. For this reason, ETFs are often also referred to as index shares. The risk associated with an investment in such funds depends on the underlying instruments contained in the basket of securities concerned.

8. Derivative financial instruments

Derivative financial instruments are instruments whose value and price are derived from the value of another financial instrument or commodity.

Derivative financial instruments are exposed to all major types of risks outlined in this document. Additionally, they are particularly exposed to counterparty risk and liquidity risk.

Counterparty risk is the risk that the issuer of the derivative financial instrument may not pay the agreed amount at maturity or deliver the commodity to which the holder of the derivative financial instrument is entitled. This risk is particularly pronounced in over-the-counter (bilateral) derivative financial instruments, where there is no central counterparty guaranteeing settlement.

Liquidity risk is the risk of low demand for the derivative financial instrument, which may prevent the investor from selling it, or may only allow sale at a significant discount from the fair price. This risk is particularly pronounced in over-the-counter (bilateral) derivative financial instruments where parameters are not standardized, potentially limiting demand for them.

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Legal documents

General terms and conditions

PART I: GENERAL PROVISIONS

1. BASIC INFORMATION

1.1. Purpose of the General Terms and Conditions

1.2. Information about the Company

1.3. Services provided by the Company

1.4. Financial instruments

2. PROCEDURES BEFORE AND AT THE TIME OF ENTERING INTO A BUSINESS RELATIONSHIP WITH CLIENTS

2.1. Client identification

2.2. Processing of Client data

2.3. Client categorisation

2.4. Assessment of suitability and appropriateness

3. GENERAL COVENANTS

3.1. Protecting clients’ interests and complying with regulations

3.2. Limitation of liability

3.3. Managing conflicts of interest

3.4. Investor Compensation Scheme

3.5. Accessibility and changes to the General Terms and Conditions

4. THE BUSINESS RELATIONSHIP AND REMUNERATION FOR SERVICES RENDERED

4.1. Business relationship

4.2. Fees

PART II – INVESTMENT SERVICES AND ACTIVITIES AND ANCILLARY INVESTMENT SERVICES

1. RECEPTION, TRANSMISSION AND EXECUTION OF CLIENT ORDERS

1.1. Reception of Client orders

1.2. Types of orders

1.3. Place of execution of orders

1.4. Acceptance of orders by the Company

1.5. Rejection of Client orders

1.6. Changing and cancelling an order

1.7. Receipt of order confirmation

1.8. Execution of Client orders

1.9. Purchase price

1.10. Ensuring adequate balance of financial instruments

1.11. Handling of client financial instruments

1.12. Handling of client money

1.13. Settlement of transactions in foreign financial instruments

1.14. Transaction accounting

2. PORTFOLIO MANAGEMENT OF FINANCIAL INSTRUMENTS

2.1. Portfolio management services agreement

2.2. Portfolio management service fees

2.3. Transfer of Managed assets to the Client

2.4. Performance by a Third Party

2.5. Termination of Portfolio Management Agreement

2.6. Distribution of Excess from Management

2.7. Determination of the Value of Financial Instruments

2.8. Reporting

2.9. Determination of Investment Policy and Management Criteria (Benchmark)

2.10. Management of book-entry Securities Accounts

2.11. Management of Foreign Issued Financial Instruments Accounts

2.12. Sub-custody and Risks Related to the Management of Financial Instruments and Cash

2.13. Settlement of Financial Instruments and Cash

3. INVESTMENT ADVICE

3.1. Information on Investment Advice

3.2. Investment Advisory Agreement

4. PLACEMENT OF FINANCIAL INSTRUMENTS

4.1. Placement agreement for the execution of a first sale or subsequent resale of financial instruments

5. SAFEKEEPING AND ADMINISTRATION OF FINANCIAL INSTRUMENTS FOR THE ACCOUNT OF CLIENTS

5.1. Safekeeping and administration of financial instruments

5.2. Opening a client account with the KDD

5.3. Transfer of book-entry securities

5.3. Transfer of book-entry securities

5.4. Order of instructions

5.5. Informing clients about their account balance with KDD

5.6. Foreign financial instruments sub-depository

5.7. Sub-depository of units of collective investment undertakings

5.8. Foreign financial instruments held in a central depository

5.9. Separation of client assets from the Company’s assets

5.10. Warnings

6. ADVICE TO UNDERTAKINGS ON CAPITAL STRUCTURE, INDUSTRIAL STRATEGY AND RELATED MATTERS AND ADVICE AND SERVICES RELATING TO MERGERS AND THE PURCHASE OF UNDERTAKINGS

6.1. Advisory services contract for companies on capital structure, business strategy and related matters and for services in connection with mergers and acquisitions

PART III – FINAL PROVISIONS

1. INFORMING CLIENTS OF THE COMPANY’S ACTS

1.1. General Terms and Conditions acknowledgement

1.2. Acknowledgment of the Company’s policies

2. APPLICABLE LAW AND DISPUTE RESOLUTION

2.1. Applicable law

2.2. Dispute resolution

3. VALIDITY

3.1. Entry into force