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.
1. GENERAL PROVISIONS
1.1 Purpose and content of the Rules
These Sub-depository Rules (the “Rules”) set out the rules relating to the maintenance by the Company of a sub-depository of financial instruments in respect of financial instruments held for the account of its clients through its account with the central securities depository or through another intermediate sub-depositary.
The purpose of the Rules is to define:
i. how the sub-depository is to be managed and how entries are to be made in the sub-depository;
ii. how to exercise the rights attaching to clients’ financial instruments,
iii. the content and manner of issuing orders by a client or third party right holder regarding disposition of client financial instruments;
iv. the frequency and manner of issuing reports on the state of the client’s financial instruments and third party rights in those financial instruments,
v. the content and manner of submission of the request for an extract from the sub-depository.
1.2. Intermediate depository and intermediate depositary
The Company maintains balances of all financial instruments that are not entered in the central register of book-entry securities at the KDD in an intermediate depository for the account of its clients.
The Company shall keep financial instruments held for its own account in a separate intermediate custody.
The Company shall select the central securities depository or the intermediate sub-depositary at its sole discretion and the Company shall not be liable for the conduct of the central securities depositary or the Intermediate sub-depositary but shall be responsible for its careful selection.
1.3. Meaning of terms
The following terms shall have the meanings given to them in these Rules:
|“deposited financial instrument (DFI)”
i. of which the Company is the legal holder, or
ii. in respect of which the Company has the right to request the liable person to exercise the rights arising from such financial instrument on the Company’s account and to dispose therewith on the Company’s order;
|the rights that each client has in relation to the Company based on the DFI, which are held in its DFI Account;
|“unique identification number”
|i. the tax number of the person entered in the tax register in the Republic of Slovenia;
ii. the Company’s own identification number assigned to a person who is not entered in the tax register in the Republic of Slovenia in accordance with the provisions of Article 2.2 of these Rules;
|each of the following:
ii. the person in whose favour a third party right is registered in the client’s DFI,
iii. the legal representative of another rightholder,
iv. a person who, as a proxy, is entitled to represent another rights holder in relation to the Company;
|the person who has the right of redemption on the client’s DFI;
|the following third party rights on the client’s DFI:
iii. redemption right,
iv. pre-emption right,
v. ban on disposal
|in relation to a specific DFI:
i. any rights which the Company has against the obligor under or in connection with this DFI; and
ii. the right to dispose of or request DFI from the obligor;
|a person who has a pre-emption right over the client’s DFI;
|the DFI records maintained by the Company for the Client in accordance with these Rules;
|all DFIs of the same issuer, which have the same characteristics and from which the same rights are derived;
|a person for whom the Company maintains one or more DFI accounts under contract;
|any change to the DFI client’s account or to the rights of a third party in the client’s DFI.
|“beneficiary of a ban on disposal”
|a person in whose favour a ban of disposal is registered on the client’s DFI;
|a person who has an usufructuary right on the client’s DFI;
|a person who has a lien on the client’s DFI;
|in relation to a specific DFI:
– the issuer of such financial instrument and any other person whose obligations arise under that financial instrument; or
– a person who has undertaken to exercise and dispose of the rights under the financial instrument on behalf of the Company and at the Company’s direction;
Unless a different meaning is specified for a particular term in these Rules, terms used in these Rules shall have the meanings as defined in the ZTFI-1.
2. MAINTAINING THE SUB-DEPOSITORY AND ENTRY MAKING
The Company shall keep the following records in relation to the sub-depository:
a) records of clients and other rights holders;
b) DFI account records;
c) DFI records.
2.2. Records of clients and other right holders
In the register of clients and other right holders, the Company shall keep, for each client and other right holder, its identification data, namely:
a) for a natural person:
– first and last name,
– address of permanent residence,
– date of birth,
– a unique identification number,
– if the holder is alive and has no legal capacity, details of the legal representative(s) (e.g. parents) for each legal representative:
- type of agent (parent/guardian),
- method of representation (jointly with another representative/individually),
- a unique identification number;
b) for a legal person:
– firm (abbreviated firm),
– business address,
– a unique identification number,
– details of the persons entitled to give orders to the Company on behalf of the legal entity,
– information on restrictions (opening of bankruptcy or similar proceedings).
The Company shall enter the Client’s identification information in the records upon the opening of the first DFI account and the other right holder’s information upon the first entry of such right holder’s rights in the Sub-Depository.
If a client or other holder of rights is not registered and is not obliged to register in the tax register in the Republic of Slovenia despite having acquired the characteristics of a client or other holder of rights, the Company shall assign such client or other holder of rights its own identification number, which shall distinguish such client or other holder of rights from all other holders of rights.
The Company shall enter a change to the identification data on the basis of an order from the right holder to change the data. If the information obtained by the Company on the basis of an extract from an official record or other public document changes, the order shall be accompanied by a new extract from such official record or public document from which the change in information is derived.
2.3. DFI account records
In the DFI account register, the Company maintains the following types of information on each DFI account:
a) the DFI account number and type;
b) client details;
c) information on the balances;
d) information on changes in balances (transactions); and
e) details of payments made under the client’s DFI.
The following information shall be kept in respect of each DFI account for the client who is the DFI account holder:
a) the unique identification number of the client;
b) the unique identification number of each person authorised to give orders in relation to that DFI account (the client’s proxy);
c) address for sending notifications and other contact details;
d) details of the cash account to which the Company pays cash distributions to the Client from the Client’s DFI in that DFI Account.
The unique identification number of a client may be changed only on the basis of a public document establishing the universal legal succession of the client. Changes to other data shall be entered by the Company on the basis of a written order from the client, whereby the information on the proxy shall only be entered if a notarised power of attorney of the client is submitted to the Company at the same time or if the client authorises the proxy in person with the Company.
The Company maintains the following information regarding the DFI balance in the DFI account:
a) the DFI series and the amount of DFI of each series in the DFI account,
b) third party rights on the client’s DFI.
The information on the balance of the DFI in the Account or the balance of third party rights in the DFI in the Account shall be subject to change based on the Company’s entries. The Company shall execute entries in the chronological order in which it receives the orders or decisions which are the legal basis for the execution of the entries.
The following information shall be kept in the DFI account register in relation to third-party rights to the DFI in the account:
a) the name and surname/company name of the right holder,
b) address/business address,
c) an identification number derived from the identification document,
d) information on restrictions,
e) details of legal representatives or proxies,
f) type of right,
g) the amount of DFI of each series to which the third party right relates or, in the case of a lien, the current DFI account balance of each series,
h) the time of entry, the duration of the right, if limited, and the time of deletion of the right,
i) details of the cash account of the usufructuary or lienholder,
j) the purchase price in the case of a redemption beneficiary.
The Company shall amend the cash account details for payments to a lien holder or usufructuary on the basis of an order from the lien holder or usufructuary.
For each change in the DFI Account balances and change in the balances of third party rights in the DFI Account, the Company shall keep details of:
a) the date of the amendment,
b) the type of change,
c) the amount of DFI,
d) the legal basis for the change (the client’s order or the decision of the competent authority).
The Company shall keep the following information in respect of each payment made by the Company to a client or third party rights holder in respect of the holding or exercise of rights under the client’s DFI:
a) the amount paid,
b) details of the cash account to which the payment was made,
c) the amount of tax withheld,
d) the amount of other expenses and allowances to be deducted from the payment,
e) the legal basis for the payment.
2.4. DFI records
In the DFI register, the Company keeps the following information on the DFI of each series for which it maintains a sub-depository:
a) DFI code,
b) a central depository or an intermediate depository where a record of the Company’s rights in respect of such DFI is kept,
c) the total balance of each DFI series,
d) changes in the balance of a series of DFIs.
The basis for entries in the DFI Register shall be the information on balances and changes in balances received by the Company from the Central Depository or the Intermediate Depository, as the case may be, in which the Company’s record of rights in respect of such DFI is kept.
3. DFI ACCOUNT MANAGEMENT
3.1. Opening a DFI account
The Company shall open a DFI Account for the Client on the basis of a agreement between the Company and the Client, which shall be concluded through the Equito trading platform, accessible on the Company’s website www.equito.co (hereinafter referred to as the “Equito Trading Platform”).
A Client may have multiple DFI accounts with the Company.
A DFI account can be opened as a client account or as a fiduciary account. The type of account shall be determined in the contract between the Company and the client.
If a DFI Account is opened as a Client Account, the Company shall be entitled to assume that the Client is exercising the rights under the client’s DFI in such DFI Account for its own account.
If the DFI Account is opened as a fiduciary account, the Company shall be entitled to assume that the Client is exercising rights under the client’s DFI in such account for the account of one or more other persons.
3.2. DFI entry in favour of DFI account
The client shall acquire rights in respect of the client’s DFIs when such DFIs are registered in favour of the client’s DFI account.
The Company shall credit the DFI to the DFI Account:
a) if the same amount of DFI of the same series is debited from another DFI account at the same time; or
b) when it is satisfied that an equal amount of DFI of the same series has been definitively entered in favour of an account of the Company with a central depository or an intermediate depository where a record of the Company’s rights in respect of such DFI is maintained and that such DFI has been received for the benefit of a client who is the holder of such DFI account.
Where DFIs are credited to the Company’s account with a central depository or an intermediate depository by virtue of a transaction executed based on the Client’s order by the Company or by another person to whom the Company has communicated the Client’s order, the condition set out in point (b) of the preceding paragraph shall be deemed to have been satisfied when the Company receives notice of the execution of such transaction.
Financial instruments determined by the Company to be acceptable and notified to the Client may be transferred to the sub-depository and such notification shall be deemed to have been given if the Company publishes a list of acceptable DFIs on its website.
The Company shall notify the client upon request:
a) which financial instruments can be transferred to a sub-depository with the Company and under what conditions;
b) the information that must be contained in a notice of transfer or entry of DFIs in favour of the Company’s account with a central depository or an intermediate depository in order for such DFIs to be deemed to have been received by the Company on behalf of that client.
3.3. Debit entry of Deposited financial instruments to the DFI account
Upon debiting the DFI from the DFI Account, all rights of the Account Holder in and to such DFI shall cease.
The Company shall debit the DFIs from the DFI Account if it makes a transfer.
The transfer of DFIs shall be effected either by the Company crediting them simultaneously to another DFI account or by the Company debiting its account with the Central Depository or the Intermediate Depository and transferring them to the benefit of another person.
The Company shall execute the transfer of the DFI on the basis of a complete and correct order from the eligible originator for the transfer of the DFI or on the basis of a binding decision by a competent authority.
A DFI transfer order is correct and complete if it is given in the form and manner prescribed by these Rules for the giving of orders to the Company and if it contains:
a) details of the DFIs subject to the transfer;
b) transfer instructions that enable the Company to effect a transfer for the benefit of a particular person.
The eligible originator for the transfer of DFI is:
a) the account holder of the DFI, provided that no third-party rights are registered with those DFIs;
b) a lien holder, if there is a registered lien with these DFIs;
c) the account holder together with any third party right holders, if any other third party right is registered with those DFIs.
3.4. Termination of the DFI
The Company shall record the acquisition, transfer and termination of third party rights in the client’s DFI on the basis of a complete and correct order from the eligible originator or a binding decision from a competent authority.
An order for the entry of the acquisition, transfer or termination of third party rights in a Client’s DFI shall be correct and complete if it is given in the form and manner prescribed by these Rules for the giving of orders to the Company and if it contains the particulars by which such third party rights are to be entered in the records of the DFI’s accounts in accordance with these Rules.
At the same time as the Company records the acquisition of a particular third party right in a particular client’s DFI, the Company shall record the cancellation of all other third party rights in such DFI, except for the pre-emption right.
The eligible originator for the entry of the acquisition of a third-party right with the client’s DFI is the client together with those third-party right holders who are deleted as a result of the entry of the third-party right to which the order relates.
The eligible originator for the entry of a transfer of a third party right with the client’s DFI is:
a) in the case of a lien, by the lien holder with the relevant contract or with the consent of the account holder;
b) in the case of other rights, a person who proves to the Company by a public deed that such right has passed to him by universal succession.
The eligible originator for the entry of the deletion of a third party right with the client’s DFI is:
a) the holder of such a third party right;
b) the client, if the time for which the third party’s right was registered has expired, or if he proves by a public document that a fact has occurred which causes the termination of such third party’s right (e.g. death of the usufructuary), or upon presentation of a notarised declaration by the beneficiary authorising the deletion.
4. EXERCISING YOUR DFI RIGHTS
The Company shall exercise the rights under the DFIs in relation to the DFIs held in DFI accounts for the account of clients against the obligors.
In exercising its rights under the DFI, the Company is obliged to act in accordance with the client’s instructions.
The Company shall forward to the client any notification concerning the client’s DFI received from the obligor. If such notice includes a request to choose one or more options for exercising rights under the DFI, the Company shall notify the client at the same time as the notice:
a) which option will be considered selected if the client does not select another option (default option), and
b) the time limit within which the client can notify it of the choice of an alternative.
If in the case referred to in the preceding paragraph, the Company does not receive instructions to the contrary from the Client within the given time limit, the Company shall be entitled to consider that the Client has chosen the default option.
4.2. Cash payments
The Company shall pay the sums of money received from the obligor based on the DFI into the cash account of the holder of the rights entitled to such payment, as follows:
a) if the DFI is subject to a registered lien, the Company shall pay into the cash account of the lien or into the account of the DFI holder or a third party, if so agreed in the lien agreement;
b) if the DFI has a usufructuary entry:
– the amount of dividends, interest and other returns to the beneficiary’s cash account;
– amounts representing repayment of principal or
– a capital payment, to the cash account of the client in whose DFI account the DFI is registered on the cut-off date of such payment;
c) in all other cases, to the cash account of the client in whose DFI account the DFI is registered on the cut-off date of such payment.
Cash distributions shall be paid to the account holder less the amount of any taxes and other charges which the Company is liable to levy, withhold and pay on the payment.
4.3. Rounding at conversions and distributions of DFIs
If the Company receives additional or replacement DFIs as a result of the conversion of DFIs held for the client and the number of DFIs in the client’s DFI account is insufficient to entitle the Client to the full number of additional or replacement DFIs, the Company shall be entitled to act in accordance with the terms of the conversion or the client’s instructions. The Company shall inform the client of the options available to it and also which option it will deem to have been selected if the client fails to give instructions within the time period notified to it by the Company (default option). If the Company does not receive instructions to the contrary from the client within the time period, the Company shall be entitled to deem the client to have selected the default option.
4.4. Voting rights
The Company shall not be entitled to exercise the voting rights attached to the DFIs entered in the client’s DFI Account unless it receives a written voting instruction from the client.
The Company shall, at the request of a client, endeavour to issue or procure for the client a proxy to exercise voting rights under the DFI.
The Company shall not be obliged to provide the Client with any annual reports, notices to holders of financial instruments, notices or other documents or information relating to any action of the DFI Issuer.
An order from a Right Holder to the Company shall only be effective if it is given by the Right Holder or a person entitled to act as a Right Holder in giving such orders and is given through the Equito Trading Platform.
The Company may agree with an individual right holder to give orders in a different form.
5.2. Company announcements
If the occurrence of any consequence in relation to these Rules is dependent on the Company giving notice to the rights holder, the rights holder shall be deemed to have received such notice if the Company has given such notice to the rights holder via the Equito Trading Platform or by email.
5.3. Account balance report
The firm shall, at the request of a holder of financial instruments, issue a statement of the turnover in the client’s account referred to in the preceding paragraph on the next business day following receipt of the request, for the period requested. The statement shall also include the account balance in the sub-depository on the date of the statement.
A request for an extract from a financial instrument holder must include:
a) the name and identification of the client;
b) the account number in the sub-depository;
c) the DFI to which the extract request relates, or an indication that it is requested for all financial instruments;
d) the period to which the extract relates.
Article 5.1 of these Rules shall apply mutatis mutandis to the form of the application. The Company shall, at the request of the holder of a third party right, inform the latter of the rights of the third party registered in his favour.
5.4. Account statements
The Company shall send the DFI account holder quarterly information on the balance of the account in the sub-depository.
The notice includes the following information:
a) the client’s identification data entered in the sub-depository;
b) the cut-off date of the statement;
c) for each client account:
i. account number,
j. the quantity and value codes of the DFIs entered in the account,
k. if third-party rights are registered on the DFI, the type of third-party right and the designation, quantity and value of the DFI subject to that right.
The Company shall provide the DFI account holder with information on the turnover, charges and fees of the account in the sub-depository account at least once a year.
The quarterly statement referred to in paragraph 1 of this Article and the annual statement of turnover, costs and charges shall be sent by the Company to the client via the Equito trading platform.
6. FINAL PROVISIONS
6.1. Publication on the website
The Company is obliged to publish these Rules on its website.
6.2. Entry into force
These Rules shall enter into force on the date on which the Company obtains authorisation to provide investment services and transactions and ancillary investment services.