INDIVIDUAL SAVINGS ACCOUNT TERMS OF BUSINESS
To apply for a HB Markets Self Select ISA, we require that you have opened a General Trading Account with us. Your ISA Annual Management Charge (“AMC”) will be taken from your General Account so as to not reduce the amount you may invest within the ISA Account.
HB Markets plc is authorised and regulated by The Financial Services Authority Limited (“FSA”) and under the Rules we have initially classified you as a retail customer. This is because we may currently have insufficient information to judge your status, or we may need to review the transactions that you enter into with us. If other firms regulated by the FSA would normally classify you as a professional customer or an eligible counterparty, we may wish to re-classify you as a professional customer or eligible counterparty when we are in a better position to consider your status. If you would normally have the status of a professional customer or eligible counterparty, you may not have rights under the Financial Ombudsman Service or the Financial Services Compensation Scheme. We will provide you with more information concerning this on request.
If you wish to accept these Terms of Business, please sign and return the enclosed Retail Customer Information Form (“RCIF”). You should note also that we may not be able to offer our advice if you do not complete fully a RCIF and return it to us.
DEFINITIONS
“We” and “HB” mean HB Markets plc (Registered No. 2693942), 131 Finsbury Pavement, London, EC2A 1NT, its successors and assigns, together with any parent company, companies in the same group (including our nominee companies) and, where applicable, employees of any such persons.
“You” means the person or persons who has or have accepted these Terms of Business.
“Terms of Business” means the Investment Services and Terms, Conditions, Obligations and Rights applying between us and you, as set out in this document, the document entitled “Personal Information & Data Protection Policy”, and our published charges sheet.
“Person” or “Persons” includes one or more individuals, bodies corporate, partnerships, firms, associations (whether incorporated or unincorporated), Trustees, Personal Representatives, and any other person or entity recognised by law.
“Initial Services Agreement” means the agreement between us and you as defined under the Distance Marketing Directive 2004.
“Clause” means a clause of these Terms of Business. A person is connected with us if so defined by The Rules of the FSA, including persons who control us, are controlled by us, or are members of the same group of companies and includes our employees and those of a connected person. We are regarded as “controlling” an investment if we are entitled to exercise rights attaching to that investment.
“CREST” means the organisation responsible in the United Kingdom for the paperless registration, transfer and settlement of transferable securities.
“London Stock Exchange” means The London Stock Exchange plc.
“AIM” means the AIM Market of the The London Stock Exchange.
“The Rules” means The Rules and Regulations of London Stock Exchange, the London International Financial Futures and Options Exchange, CREST Co. Limited and any other exchange, clearing house or regulatory authority having jurisdiction in relation to business which we transact for you, together with any requirements arising from or regulations made by or under the Financial Services and Markets Act 2000 (“FSMA”), or in accordance with the Financial Services Act 1986 in so far as its provisions have not been amended or superseded by FSMA.
“FSA” means The Financial Services Authority whose address is 25 The North Colonnade, Canary Wharf, London E14 5HS.
The above definitions are not an exhaustive list of the terms used in these Terms of Business.
Our services are regulated by the FSA and a copy of their rules and regulations is available for inspection during weekday normal business hours at our address. Where applicable, any term used in these Terms of Business has the meaning given to it by those rules and regulations.
This document contains details of the investment advisory services which we will provide to you, and it sets out the obligations and rights applying between us and you. If there is anything you do not understand or with which you do not agree, please contact us immediately, or alternatively seek independent advice from an appropriately qualified adviser.
MARKET ABUSE PROVISIONS OF FSMA
1. You confirm that you have read and understood the Code of Market Conduct published by the FSA. You also confirm that you will comply with its provisions in your dealings with us and undertake that you will indemnify us against any loss arising out of any failure by you to comply with such code.
a) Unless we notify you otherwise we will classify you as a retail customer as defined by The Rules of the FSA. You may request a different classification as a Professional Client or Eligible Market Counterparty. If these are relevant for you we will discuss these options with you, but you will lose some protections from which you currently benefit.
b) We will not act as your investment manager, which means that we do not accept responsibility on a continuing basis for advising on the composition of your account or portfolio of investments held on your behalf by us or any other party. We may provide you with advice, recommendations and research on an unsolicited basis. You agree to receive communications of this nature. If you decide to transact business on the basis of communications received from us, you accept that we have no obligation to advise you on a continuing basis with respect to investments purchased on the basis of our commendations.
You accept that it is your responsibility to contact us if you wish to seek advice on any recommendations we have made. Although we will endeavour to provide advice when you request it, you acknowledge that we are not obliged to do so.
2. We provide investment, advisory and dealing services with respect to a range of investments and securities, including the following, but shall be entitled at any time to restrict such categories, whether for regulatory or other reasons:
a) listed, traded and unquoted shares in UK and foreign companies (including partly paid shares);
b) debenture stock, loan stock, bonds, certificates of deposit, commercial paper or other debt instruments, including those issued by or on behalf of any government, local or other public body;
c) warrants and other derivatives to subscribe for securities within sub-paragraphs 2.a) and 2.b) above;
d) depository receipts and other types of instrument relating to securities within such sub-paragraphs;
e) collective investment schemes (including those which are unregulated); and
f) Self Invested Personal Pensions and Individual Savings Accounts.
3. If you wish to deal in warrants, contingent liability investments or any other contracts for differences, futures or options, please request the separate Derivatives Risk Warning Notice, which is available on request. It is your responsibility to read, sign and return it to us before we deal in these investments on your behalf.
Recommendations
4. a) We will not make recommendations or advise you on the merits of any particular transaction if we reasonably believe from the circumstances in which you give the order or instruction that you do not seek or will not accept such advice and are dealing as an execution-only customer. In such circumstances we will inform you at the time that we will execute your order on that basis.
b) We may provide on request written and oral information, research recommendations and marketing information (produced by a person(s) other than us) to facilitate your investment decisions, using sources believed to be reliable and accurate but which cannot be warranted by us to be accurate and complete. We do not accept liability for any direct or consequential loss arising from the use of any research or recommendation provided in this way.
c) We will not be responsible for considering the tax implications for you of any recommendations that we may make.
5. You agree that we may make to you to buy or sell investments in which we deal as principal for our own account, or in our capacity as a market maker. In these circumstances we will disclose that we are acting as principal/market maker as required by The Rules of the FSA. We will nevertheless continue to be subject to The Rules and Regulations of FSA, and the Principles of Conduct requiring us to act in the best interests of our customers. If you request us, orally or in writing, to retain contract notes, then you agree that the oral disclosure of our acting as principal with you at or around the time of dealing is sufficient notification for the purposes of these Terms of Business and regulatory compliance with The Rules.
IDENTIFIED PRINCIPAL
6. a) You alone will be treated as our customer under The Rules of the FSA, even if you are acting as an agent and have informed us of the identity of your principal. We will not treat any principal for whom you may be acting as our indirect customer unless we have specifically agreed to do so in writing in accordance with a professional customer agreement entered into between you and us.
b) We shall be entitled to rely on and treat as binding any instructions we reasonably believe to have been given by you or on your behalf. We may refuse to carry out your instructions, if in our reasonable opinion, compliance with them would be contrary to any applicable law, rule, regulation, regulatory requirement, market practice or code of conduct,or to do so would be unreasonable in the circumstances. If you wish to give authority to another person to deal on your account, we will require a duly signed power of attorney to that effect. Subject to any limitation in such power of attorney, you agree that we are entitled to treat your attorney as having an unlimited authority to deal on your Account. We are under no obligation to obtain your confirmation concerning any limits on the value, size, frequency or indebtedness of their dealings or instructions in respect of safe custody services and we will not be obliged to consider whether they have exceeded the authority you have given to them in light of your circumstances that are known to us.
YOUR INVESTMENT OBJECTIVES
7. We have asked you to complete a Retail Customer Information Form (“RCIF”) with information on your financial circumstances, investment objectives and the level of risk you are prepared to take in relation to investments. The purpose of this is to determine the suitability of any investment recommendations we make to you. If you do not provide us with comprehensive information, you accept that we may not be able to provide advice to you.
8. Once the RCIF has been completed, we may contact you to verify that the information that you have provided remains accurate. This may affect the manner and content of the services which we provide to you. If the information that you so provide conflicts with information contained in the RCIF, you agree that we are entitled to rely on the former. We may provide you with a written record of our understanding of your revised objectives upon which our recommendations will be based. If you believe that our record is incorrect, it is your responsibility to request us to amend such record. You agree that, in the absence of any request by you, the record will be deemed to be accurate and you will have no claim against us for making recommendations that are unsuitable.
9. In order to help us to ensure that we do not make unsuitable recommendations to you, you should inform us immediately of any changes to your circumstances which may be relevant. It is your responsibility to keep us informed of any matters which we should take into account when giving advice to you.
10. It is agreed between us that your investment objectives, the level of risk in relation to investments and expectations of receiving recommendations in respect of speculative and higher risk shares may change during even a short period of time, and that the percentage limits matching different levels of risk may become inappropriate. If you decide to deal more frequently in high risk stocks or change your frequency and/or size of bargain or level of speculative stock in your portfolio, we shall be entitled to assume that your risk profile has changed and that you accept a higher level of risk. However, we shall not be on notice that your level of risk has reduced simply because you may deal less frequently in higher risk stocks or deal more frequently in lower risk stocks.
11. You confirm that you are aware of and understand the nature and level of risks involved in dealing in all forms of investments, (including but not limited to fully listed and quoted stocks, including shares on AIM and PLUS Market) as well as penny shares, non readily realisable investments, and unlisted stocks which we may recommend to you on a principal or agency basis, or which you may purchase through us on an execution only basis.
RESTRICTIONS ON TYPES OF INVESTMENT
12. If you do not inform us of any particular investments or types of investments which you do not wish us to recommend to you or purchase on your behalf, we may recommend any investment which falls within the categories set out in Clause 2 above. This however will not affect our obligation under the Rules of the FSA only to recommend to you those investments which we have reasonable grounds to consider are suitable for you. We will not, without separate signed instructions, commit you to underwriting, stock lending or borrowing or similar obligations transactions or obligations.
COMMUNICATIONS
13. We will communicate with you in English. We shall be entitled to communicate with you by letter, facsimile, any forms of electronic communication or other virtually instantaneous communication medium (including email and text message) and by telephone. Where these Terms of Business are addressed to more than one person, any instruction, notice, demand, acknowledgement, request or other communication by or to you may be given by or to any one of you. You expressly confirm that a purpose of your accepting these Terms and Conditions is to receive our recommendations. Accordingly you agree to receive unsolicited contact by telephone or by other medium with our recommendations to enter into transactions with us to buy or sell investments (including recommendations where we may be acting as market maker or as principal for our own account). Contact may be made between 08:00-21:00 hrs. (and such other hours as the markets in which you normally deal are open) in our local time, Monday to Saturday. We will not contact you by telephone on Sundays or outside these hours unless we consider it to be necessary, or we reasonably believe that you may wish to receive a call outside these times. Please inform us of times that you do not wish to be telephoned for reasons of work patterns, religious faith or other personal reasons. We may contact you on an unlisted number if you have previously provided it to us. Our procedures and The Rules of the FSA require any employee making an unsolicited call to terminate it immediately if the customer does not wish the call to continue. For your protection and to resolve any misunderstandings, we reserve the right to record all telephone calls, retain them for our records and to review them as part of our monitoring and training procedures. You agree that any such recorded calls may be used as evidence in a dispute between you and us.
OUR CHARGES
14. Our charges are set out in our published charges sheet, a copy of which is provided with and is incorporated into these Terms of Business. If you have not received the copy sent to you, it is your responsibility to request a further copy. Our charges are subject to change. Subject to Clause 34, we will inform you of any changes to our charges. Our charges are incurred on a per bargain basis, and any overall variation in charges that you request or negotiate will only be enforceable if we have expressly agreed in writing. Transactions dealt on non-standard settlement may result in additional charges or fees levied by third parties, which will be notified on your contract note. Dealing on non-standard settlement terms may also mean that you are offered a worse price than the price quoted for standard settlement. Interest charged for late settlement is detailed in Clause 24. We may share dealing charges with our associated companies and other third parties, or receive remuneration from them in respect of transactions carried out on your behalf. Details of any such remuneration or sharing arrangements will not be set out on the relevant contract note but are available on written request.
TERMS APPLICABLE TO DEALING
Applicable customs and practices
15. Except as otherwise provided in these Terms of Business, all transactions are subject to The Rules and the customs and practices of the exchange or market on which they are executed. You warrant to us that you are not prohibited from using our services by the laws of the country in which you currently reside or otherwise, and that your dealings will comply with all relevant laws and regulations affecting you.
Settlement of transactions
16. You will ensure that all monies due to us are paid and all documents are delivered to us in good order to settle transactions effected by you or on your behalf, and have done everything necessary to allow settlement by the date confirmed to you at the time of dealing, or as stated in the contract note (whichever is the earlier). You confirm that when you sell an investment through us, you own that investment and have the right to sell it free from all liens and any other restriction and to receive the proceeds personally. You agree to indemnify us from all fines, taxes and charges that CREST, the London Stock Exchange or any other exchange or clearing house may impose on us or our nominee as a result of your failure to deliver money or documents to allow transactions to be settled. All sums due to us in respect of commissions and other charges (whether under these Terms of Business or otherwise) may be deducted from any funds which we may hold from time to time on your behalf. Payments to you in respect of sale transactions carried out on your behalf will be dependent on CREST accepting the stock as good. All dealings for securities held in CREST will be dealt for standard settlement unless we confirm otherwise. All dealings for securities held in certificated form will be dealt for non-standard settlement unless we confirm otherwise. We do not make or accept payments to or from third parties unless we have agreed to do so by prior written agreement. You agree to inform us immediately if there are any errors in documentation that we send to you and to repay to us immediately any overpayments made to you.
Power of Sale/Purchase
17. All investments (including any cash) which we hold (or are entitled to receive) on your behalf constitute a first security interest for the payment of any liabilities which you may have incurred to us and which remain outstanding on the due settlement date. Such investments will not be released or discharged, by time being given, or other concession being granted by us to you or to any other interested person, or by any other matter as a consequence of which the investments or your liabilities might be released or discharged. At any time after the due settlement date in respect of any liabilities which you have incurred to us, we shall have the power to sell or dispose of any such investments in or toward satisfaction of those liabilities and will account to you for any surplus. Any costs incurred by us in effecting the above will be debited to your account. Without prejudice to our rights we shall be entitled, without instructions from you, to execute an offsetting transaction at your expense, if we do not receive a certificate and signed sold transfer form for the investments sold for you by the relevant due settlement date.
Aggregation of orders
18. We shall be entitled, without reference to you, to combine your orders of any nature with other orders for execution (including orders placed by persons connected with us or on our own account). Where such aggregation results in a number of transactions at different prices, we shall be entitled to average the prices obtained and allocate your own proportion at the average price. If we combine your order with others, we will follow our policy on aggregation (which requires us reasonably to consider that it would benefit each customer concerned) although you accept that on occasion, aggregation may work to your disadvantage.
Stabilisation
19. We may deal for you in investments that may have been the subject of stabilisation. This is price supporting process that often takes place in the context of new issues and similar offerings, including rights issues. The effect of stabilisation can be to make the market price of the investment, which is the subject of the issue or offering, higher than it would otherwise be. Stabilisation may also affect the price of investments of the same class, which are already in issue, and of other investments whose price affects the price of the new issue. Stabilisation is undertaken in order to ensure that the issue of investments is introduced to the market in an orderly fashion, and that the issue price and/or the price of associated investments is not artificially depressed because of the increase in supply cause by the new issue. The fact that there have been dealings in an investment in which stabilisation may be taking place does not necessarily mean that investors are interested in buying that investment or in buying it at the level at which the dealings have taken place. Stabilisation takes place for a limited period. There are limits on the price at which shares, warrants and depository receipts may be stabilised but the limits do not apply where loan stock or bonds are being stabilised. At the time of dealing, reasonable steps will be taken to enable you to understand the nature of the risks involved. Please inform us in writing on the RCIF is you do not wish to be advised in respect of the purchase of such investments.
Conflict of interests and permitted dealings
20. When we give you investment advice or enter into a transaction as your agent, we may have an interest, relationship or arrangement that is material in relation to the transaction or investment concerned or could give rise to a conflict of interest. However, our employees are required to comply with our Policy of Independence and our Policy of Treating Customers Fairly, and to disregard any such interest when making recommendations to you. In particular, when we recommend a transaction, or enter into a transaction for you, we may deal as principal for our own account by selling the investment concerned to you or buying it from you or may match your transaction with that of another customer by acting on their behalf as well as yours or may buy investments in a company with respect to which we are involved in a new issue, rights issue, takeover or similar transaction. Our arrangements for managing our conflicts of interest are available on our website at www.hbmarkets.com and any amendments to these arrangements will be detailed on our website.
Order Execution Arrangements
21. Details of our arrangements for Order Execution are available on our website at www.hbmarkets.com. If you require a printed copy please contact us. Any subsequent amendments to these arrangements will be notified only via our website.
In some circumstances when exceeding orders on your behalf, we may transact “off market” i.e. away from a regulated market or multi-lateral trading facility. By entering into this agreement you expressly consent to your orders being executed in this way.
CUSTODY OF YOUR MONEY AND INVESTMENTS
Client money arrangements
22. We are obliged to treat money held by us, on your behalf, in accordance with FSA’s Client Money Rules. Amongst other things, these require us to hold your money segregated from our money and at a bank approved by us for the purpose. Any monies belonging to you and other customers held in separate customer accounts at a bank or banks selected by us in accordance with the client money rules, will be identified as trust accounts. We will require any bank or banks selected by us to acknowledge that, in accordance with the client money rules, monies held in the customer accounts belong to our customers and are not our property. If we receive money from you to invest, we will keep it in our customer accounts until we make payment on your behalf for the investment concerned. If we receive money payable to you, we will hold it in our customer accounts until such time as it is re-invested or you request us to transfer it to you. In the latter event, we will forward it to you by crossed cheque sent to your latest address known or by electronic transfer to your bank account.
23. If there has been no movement in an account for a period of not less than six years (apart from payment of interest or deduction of charges, interest, dividends or similar items) we shall be entitled to cease to treat unclaimed client money as client money, but before we do so, we will send notice to that effect to your last known address, giving you 28 days in which to make a claim. We will make and retain records of all such balances and undertake to make good any valid claims in respect such funds received during such period.
Dividends, Interest, Charges and other Income
24. All client accounts which we open are designated as cash deposit accounts (“CDA”). We will pay interest on any balance standing to the credit of such account, at our prevailing rates. The frequency of interest payments and the rate of interest payable are detailed on our published charges sheet, as amended from time to time. The charges sheet forms part of these Terms of Business. You authorise us to deduct our charges from your CDA. If you owe us money or your instructions are likely to result in you owing us money, we shall be entitled to refuse to allow withdrawals or transfer balances. You agree that if you have not opened a CDA, interest will not be payable on any credit balance on our customer account, or on monies held in trust on your behalf by our clearing agents or correspondent brokers. If you incur debit or uncleared balances with us, or do not settle in cleared funds an amount when it is due, we reserve the right to charge you interest at a rate of 8% per annum above our bank’s published base lending rate from time to time on any amount overdue from you, from the date such amount falls due until the day cleared funds are received in our customer bank account. Such interest shall accrue on a daily basis. In addition, we reserve the right to make an overdue payment charge (as detailed in our published charges sheet in effect at the time) in respect of sums you owe to us. Customer bank account details are available on request.
Custody arrangements
25. All investments purchased through us to be held in custody on your behalf (except for bearer stocks) will be registered in the name of a nominee company owned by us, or a custodian in accordance with The Rules of the FSA. We will use reasonable endeavours to obtain your instructions before a) exercising on your behalf conversion and subscription rights and voting rights regarding your holdings b) acting on your behalf in takeover situations, other offers or capital reorganisations concerning your holdings. We will endeavour to forward to you information about corporate actions sent to us from those companies shares held by our nominee on your behalf. However we shall not be responsible for the failure of information to reach you or your instructions to reach us as a result of loss of mail or other event outside our control. We will not forward to you annual reports and accounts or other information to shareholders unless you have specifically requested us to do so in writing. The consequences of your failure to provide instructions by the relevant time, once notification has been given to you, are entirely your own responsibility.
26. We will send you a statement on a “trade date” basis at least once every six months detailing the transactions that have occurred on your account, payments of dividends and other transactions. We will send you, on at least an annual basis, a record of investments that you hold in our custody on a “trade date” basis. We will provide you with statements on a more frequent basis if so requested in writing.
Stock lending and use of documents of title
27. Unless you agree in writing, we will not lend any documents of title or evidence of title to investments registered in the name of our nominee to any third party, or borrow money on the security of such documents.
Registration and Custody of Your Investments
28. We are responsible for the acts of our nominee company and our custodian to the same extent as for our own acts, including, for the avoidance of doubt, losses arising from fraud, wilful default or negligence. You may instruct us in writing to register investments purchased through us in your name, or the name of some other person whom you specify (which must not be HB). If you do so instruct us, the consequences of registration carried out in accordance with your instructions are entirely at your own. Whilst we will take reasonable care in selecting a nominee or custodian, you acknowledge that any nominee or custodian (other than our own nominee company or our own custodian) which hold your securities is not under our control and, notwithstanding any other provision, we shall not be responsible for any loss or damage suffered by you arising directly or indirectly from any act or default of any such nominee or custodian.
Where you instruct us to deal for you in overseas investments (foreign securities) Clauses 29, 30 and 31 will apply:
Foreign Securities
29. In order to execute transactions and provide investment services in overseas investments (foreign securities), we may introduce your business to an overseas investment broker who may not be authorised to carry on investment business in the United Kingdom. This means that as regards such foreign securities you may not have the benefit of the protection afforded to investors under FSMA and under The Rules of the FSA. In particular, you may not benefit from the following protections: the right to claim under the Financial Services Compensation Scheme for losses or defaults; in the event of a dispute, access to the Financial Ombudsman’s Service; protection of money held on your behalf under the FSA’s Client Money Regulations; the obligation to execute your transactions at the best price available in the relevant market at the time of the transaction; the obligation to disclose charges levied on you in advance; and the obligation to advise you or recommend only investments which are suitable for you having regard to your disclosed investment objectives.
Use of an Intermediate Broker, Settlement Agent or Counterparty Outside the United Kingdom.
30. Money held by us on your behalf may be transferred to an intermediate broker, settlement agent or counterparty located outside the United Kingdom. In these circumstances, the legal and regulatory regime applying to that person may be different from that of the United Kingdom. In the event of the insolvency of that person, your money may be treated differently from the manner in which it would be treated if your money had been passed to an intermediate broker, settlement agent or counterparty within the United Kingdom. We will request, and (our agents will request on our behalf), that all approved banks outside the United Kingdom acknowledge to us that they have no right of set-off against monies held in their customer bank account for sums owed by other customers of ours. However notwithstanding our request, banks may not give the acknowledgment requested.
IF YOU DO NOT WANT YOUR MONEY TO BE HELD IN THIS WAY IN ANY PARTICULAR JURISDICTIONS, YOU MUST INFORM US IN WRITING. PLEASE NOTE, HOWEVER, THAT IF YOU OBJECT TO THIS FORM OF CUSTODY, WE MAY NOT BE ABLE TO ACT FOR YOU IN RESPECT OF FOREIGN SECURITIES.
Registration Overseas
31. Your investments may be registered or recorded in the name of a custodian or in our name in one or more jurisdictions outside the United Kingdom, where due to the legal requirements or the nature of market practice in the jurisdiction(s) concerned, we consider that it is in your best interest for us to do so or it is not feasible to do otherwise. We will inform you, if you request us to do so, whether such registration has taken place. As a consequence, your investments may not be segregated from investments belonging to us or the custodian and therefore in the event of our default, your assets may not be as well protected from claims made on behalf of general creditors of HB. Investments belonging to you, which are held overseas, may be subject to settlement, legal and regulatory requirements that differ from those which apply within the United Kingdom. If you give us specific instructions that to register your investments in the name of a person other than us, the consequences of doing so are entirely yours.
Pooling
32. Investments registered or recorded in the name of a nominee (other than a nominee company owned by us or as otherwise agreed with us) may be pooled with those of one or more of our other customers. Accordingly, your individual entitlement may not be identifiable by separate certificates, physical documents or entries on the register. In the event of a shortfall after any default by the custodian responsible for the pooled investments which cannot be reconciled, you may not receive your full entitlement but may suffer a pro-rata share in that shortfall. If your investments are pooled with those of other customers, you may find that your entitlement to new shares distributions and other corporate actions is different from what you would have received if your investments were not pooled. We reserve the right in this situation either to apportion the total entitlement received in respect of the pooled investments between you and the other customers involved, or treat any fractional entitlement in the same way as the company concerned has done so with respect to the corporate action when acting through its registrar.
Exercise of rights relating to investments
33. Unless you have instructed us in writing, and subject to Clause 25, we will not be obliged to exercise all or any of the following rights attached to or arising by virtue of your investments: taking up any shares or other securities, whether pursuant to a rights or open offer; exercising any subscription or conversion rights; dealing with takeover or similar offers or capital reorganisations; exercising any voting rights. We shall act on your instructions when you direct us and it is reasonable and practicable for our to do so, but we shall not be held responsible for any loss or damage suffered by you arising directly or indirectly as a result of your failure to instruct us in sufficient time in writing to exercise any of the rights referred to in Clause 25, or where we are not able to act on your instruction because of events beyond our control. We will not instruct you that a corporate action is taking place in a company security which is held in our nominee unless we are notified by the company or its registrar. We may impose a deadline for receipt of your instructions earlier than the final date stipulated by or on behalf of the company in order to give us sufficient time to exercise rights on your behalf.
VARIATION OF TERMS OF BUSINESS
34. We may amend these Terms of Business by notice to you specifying the proposed amendments. Such notified amendments shall become effective on the date specified in the notice which will be at least ten business days after the notice is sent. Notice may also be delivered to you by facsimile, electronic or other virtually instantaneous communication medium, and if it is so delivered, it will be deemed to have been received no later than two business days after posting. Notice may also be delivered to you by facsimile, electronic or other virtually instantaneous communication medium, and if it is so delivered, it will be deemed to have been received by you immediately, and the notice period will commence from that time. It may be impractical in certain circumstances for us to give you advance notice, in which case, at the time of giving you notice of the change, (which may be done orally or by other instantaneous communication medium), we will inform you that the change will take place with immediate effect. Unless you terminate your use of the service within the period of the notice or immediately (where no notice period has been given), you will be deemed to have accepted the amendment. Any amendments which you propose will become effective only when we confirm our acceptance of such amendments in writing. No amendment will affect any outstanding order or transaction or any legal right or liability, which may already have been acquired or incurred. These Terms and Conditions may not be amended by us without the written approval of a director of HB.
OUR LIABILITIES
35. We are covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the Scheme if we cannot meet our obligations. The compensation available depends on the type of business and the circumstances of the claim. Most types of investment business are covered for 100% of the first £ 30,000 and 90% of the next £20,000, so the maximum compensation is £48,000. Further information about these arrangements is available from the Financial Services Compensation Scheme.
EXCLUSION OF LIABILITY
36. We shall not be liable for loss, costs or expenses (including tax) that may be suffered or incurred by you as a result of, or in connection with the provision of any services to which these Terms of Business apply unless, and then only to the extent that, such loss, costs or expenses are caused by our fraud, negligence or wilful default, or by our failure to comply with the FSA Conduct of Business Rules for the time being in force.
COMMENCEMENT
This agreement will become effective following receipt by us of a signed copy of this agreement and subject to our obligations under money laundering regulations having been satisfied.
FORCE MAJEURE
37. In the event of any failure, interruption or delay in the performance of our obligations, resulting from acts, events or circumstances outside our reasonable control (which circumstances shall include, but not be limited to unanticipated dealing volumes, industrial disputes, acts or regulations of any governmental or supranational bodies or authorities, act of God, threats or acts of terrorism, fire, war, civil commotion, insurrection, embargo, breakdown, failure, malfunction or delay caused by any public utility, telecommunications or computer service or systems) we shall not be liable for any loss or damage incurred or suffered by you.
RIGHTS OF CANCELLATION, WITHDRAWAL AND TERMINATION
38. This agreement constitutes an “Initial Services Agreement” as defined under the Distance Marketing Directive 2004.
Cancellation & Withdrawal
a) You have the right to cancel the agreement between us within 14 days from the date of application. However, you do not have cancellation rights in respect of: (1) transactions that you have entered into with us prior to cancellation, (2) where the transaction has been completed by both parties at your express request or (3) the contract is in relation to services subsequently provided under the agreement. Your right to cancel is without prejudice to our accrued rights under this agreement and the termination provisions in the following paragraph.
Termination
b) You are entitled to terminate the agreement between us at any time by giving written notice to us, such termination to be effective on the first working day after the notice has been received by us or at any time specified in such notice, whichever is later, subject, in either case, to the completion of outstanding transactions. We may terminate the agreement at any time by giving you notice in writing, or orally or by facsimile, electronic or other virtually instantaneous communication medium. Such termination will be effective from the date specified in the notice. Termination will not affect accrued rights, existing commitments or any contractual provision intended to survive termination and will be without penalty. If, on termination, any sum is, or may become, due from you to us, you shall pay such sum to us immediately, and without demand. On termination of the agreement, we reserve the right to cancel, close out, terminate or reverse any transaction or enter into any other transaction or do anything which has the effect of reducing or eliminating any liability under any contracts, positions or commitments undertaken on your behalf.
JOINT CUSTOMERS
39. If you are a party to these Terms of Business with another person, or persons, the liability of each of you will be joint and several. Where such persons are trustees, you warrant that you have been validly appointed and will inform us in writing of any changes to the trustees.
POWER OF ATTORNEY AND AGENTS
40. Any notice given by us under these Terms of Business will be deemed to have been duly given to you if it is given to the person(s) whom you have informed us is your agent or to the person(s) whom you have informed us holds a power of attorney granted by you.
TERMS OF BUSINESS NOT TRANSFERABLE
41. Unless we consent in writing, your rights under these Terms of Business and any transactions effected under or pursuant to it are non-assignable and unenforceable by third parties whether under the Contract (Rights of Third Parties) Act 1999 or otherwise and your obligations shall not be capable of performance by anyone else.
INVALIDITY OF PROVISIONS
42. Each provision of these Terms of Business is severable and if any provision is or becomes invalid for any reason or contravenes any applicable regulations, the remaining provisions will not be affected and will remain enforceable.
NOTICES AND COMPLAINTS
43. All notices to be served on us should be in writing and sent to the Compliance Director at HB Markets plc, 131 Finsbury Pavement, London, EC2A 1NT. All complaints can be communicated in writing or verbally to the Compliance Director. Any notice served by us on you will be sent to your last known address, email address or by text message to your last known number as shown in our records. If, after we have had a reasonable opportunity to deal with any complaint, you remain dissatisfied with our handling of it, or its outcome, you may take the complaint direct to the Financial Ombudsman Service, whose address is available from the Compliance Officer. If you wish to make a complaint, we will explain at the appropriate time our procedures for complaints handling. Details of our complaints handling procedures are available at any time from the Compliance Officer. You undertake to inform us promptly of any change in postal address, email address or telephone numbers.
GOVERNING LAW AND ENTIRE AGREEMENT
44. These Terms of Business are governed by and shall be construed in accordance with English law and each party submits to the jurisdiction of the English Courts for the resolution of disputes. These Terms of Business, together with the other documents referred to in them, constitute the whole agreement between us, and supersede all previous terms agreed between us.
DATA PROTECTION
45. You authorise us to use and process all data in our possession that relate to any aspect of transactions with you, as set out in the accompanying document entitled “Privacy Policy.” You authorise us to record and/or monitor your use of our website and email communications between us and you.
RISK WARNINGS
46. The risk associated with equity investments (shares in individual companies) is generally accepted to be higher than fixed interest and deposit investments. Equity investments cover a wide range of risk, which can vary depending on the size of the company, its business and products and the market on which the shares are listed or quoted. Within the framework of equity investments, the risk classification that we follow is:-
(a) FTSE100 Companies - lower risk
(b) FTSE 350 Companies - medium risk
(c) FTSE Small Cap Companies including AIM and PLUS Markets - high risk
(d) Non-readily realisable and unlisted investments - very high risk
47. The risk categories referred to above are general and not specific to any individual customer, and investments in FTSE100 companies can still result in partial or complete loss of capital. You must consider, in view of your circumstances, the level of risk which you wish to assume and your overall risk strategy. We consider that in general terms a customer with a low risk investment strategy should not hold more than 10% of his equity portfolio in high-risk investments, with the remainder in lower risk investments. In general terms a medium risk investor should not hold more than 20% of his portfolio in high risk investments, with the remainder in lower and medium risk investments. A high-risk investment strategy may be 100% invested in high risk and very high risk investments alone, or in combination with a smaller percentage of lower and medium risk investments.
(a) All investments are speculative and are liable to fluctuate in value. It should not be assumed that the value of investments will always rise. Past performance will not necessarily be repeated and is no guarantee of future success.
(b) You should carefully consider in whether investing in stocks and shares is suitable for you the light of your financial resources and needs.
(c) Changes in currency exchange rates may affect the Sterling value of your overseas investments (foreign securities).
(d) Penny Shares. You run extra risks of losing money if you buy shares in smaller companies including “penny shares”. There is often a big difference between the buying price and the selling price of these shares. If you have to sell such shares immediately, you may realise much less than you paid for them and you may also have difficulty in selling. The price of penny shares may change quickly, it may go down as well as up and it may be more difficult to sell such shares. You should not invest amounts you cannot afford to lose.
(e) Non-readily Realisable Investments. You may have difficulty in selling these investments at a reasonable price. In some circumstances it may be difficult to sell them at any price. It can also be difficult to assess a proper market price for these investments and you should not invest in them unless you have thought carefully about whether you can afford to make
such investment and whether they are appropriate for you.
(f) Geared Investments. Many companies use gearing or borrowing as part of their strategy and may borrow to make investments. The effect of gearing on investment trusts and investment companies may cause the share price to become more volatile than the value of their underlying investments and may result in the share price of shares in these companies being subject to sudden or large falls. It may also mean that you could get nothing back when you try to sell such shares.
(g) AIM. The AIM market is a market designed primarily for emerging or smaller companies. The rules of this market are less demanding than those of the Official List of the London Stock Exchange and therefore the companies quoted on AIM carry a greater risk than a company with a full listing.
(h) PLUS Markets. PLUS Markets is a Prescribed Market under FSMA. It is not a recognised or designated investment exchange and companies trading on PLUS Markets are not listed or subject to the same level of regulation as companies trading on AIM or companies with a full listing on the London Stock Exchange. It may be difficult to obtain reliable information about
the current trading position of companies on PLUS Markets and, if there is only one market maker quoting prices, there may be occasions where you may have difficulty in buying or selling shares at a reasonable price or at all. Similarly the difference between the buying and selling prices can be wide and prices quoted on PLUS Markets may only be indicative
and not firm two-way prices. Additionally, there may have been little or no trading in the stock since its issue. Consequently, there is a higher level of risk attached to companies trading on PLUS Markets.
(i) Material Interest. We specialise in “Penny Shares” and shares quoted on AIM and PLUS Markets and we may hold or have previously held a material interest in companies which are the subject of recommendations or research notes, and may provide or have provided significant advice or investment services in relation to any such company.
(j) We endeavour at all times to ensure that our research is clear, fair and not misleading, and accurately reflects our opinions at the date of publication. However, we do not hold our research out to be impartial and it should not be viewed as wholly objective since HB may also be acting or seeking to act as market maker, broker or adviser to (or have taken positions as a principal in) the companies featured in the research notes.
ISA REGULATIONS
The HB Markets Terms of Business (as amended from time to time) shall apply to ISA Accounts held by HB Markets. In addition, the following Terms of Business shall apply and if there is any conflict between such Terms of Business, the following shall take precedence:
48.1.1 Eligibility
48.1.1 To subscribe to a HB Markets Self Select ISA, (“The Account”) You must be aged 18 or over and be resident or ordinarily resident for tax purposes in the United Kingdom or be a non-resident Crown employee or spouse.
48.1.2 For these purposes the United Kingdom excludes The Channel Islands and the Isle of Man.
48.1.3 Application must be made in your name only. You cannot apply for a Joint Account.
48.1.4 You shall promptly notify us in writing of any change of address or in United Kingdom taxation status which may render you ineligible to subscribe further to the Account. You shall inform us immediately if you cease to be a UK resident for tax purposes, or if being a non-resident you cease to qualify as a crown employee.
48.1.5 Investments eligible for inclusion in the HB Markets Self Select ISA are restricted to those deemed Qualifying Investments by Her Majesty’s Revenue & Customs (“HMRC”) but exclude those investments listed below in 48.1.6.
48.1.6 Investments which are ineligible for the HB Markets ISA include Unit Trusts, OEIC’s, UCITS, Life Assurance, Gilts, Cash Mini ISA’s and other non qualifying investments as prescribed by relevant regulations.
48.1.7 Provided that your application is approved by us, your Account will open upon receipt by us of a duly completed application together with payment of your initial subscription.
48.1.8 Your Account will cover the current tax year and remain open for subsequent tax years in which we receive a subscription from you, subject to any changes in legislation.
48.1.9 Your National Insurance Number and Date of Birth (DOB) must be quoted on your application form. We reserve the right to reject an application that does not quote your National Insurance Number.
48.1.10 You may subscribe up to the allowable limit in each tax year, but the limit is subject to legislative change.
48.1.11 HB Markets Plc will notify you if for any reason you fail to satisfy the ISA Regulations and that an Account has, or will, become void. HB Markets plc will not be responsible or liable for any loss that occurs should a termination of an account be required.
48.1.12 Investments to Your Account must either comprise cash subscriptions, transferred cash or Qualifying Investments in which HB Markets deals. It is your responsibility to determine whether any investments You wish to transfer to your Account meet these criteria. Please refer to Clause 36.1.6 and our website for information concerning the Qualifying Investments in which We are able to deal.
48.1.13 If a non-qualifying investment is bought by on or behalf of the Account, We shall be entitled to transfer it (without notice) to Your General Trading Account. Such transfer will be treated as a withdrawal from the Account.
48.2 Appointment
48.2.1 HB Markets Plc are “Plan Manager” for the HB Markets Self Select ISA and are authorized by the Inland Revenue as Managers of ISA’s under the Individual Savings Account Regulations 1998(Statutory Instrument 1998 Number 1870).
48.2.2 HB Markets Plc will provide Account management and administration in accordance with the Rules and Regulations and otherwise as set out in this agreement
48.3 Beneficial Ownership
48.3.1 Investments within the Account shall at all times be beneficially owned by you.
48.3.2 We shall not lend to a third party the documents of title relating to any investment or any underlying investment held in an ISA Account.
48.3.3 If you wish to benefit from the tax advantages of an ISA, you must remain the beneficial owner of the investments held in your Account.
48.4 Cash
48.4.1 Account money committed for investment in an ISA will be held separately from monies in a General Trading Account.
48.4.2 All cheques must be made payable to HB Markets Plc.
48.4.3 All cash received in your ISA including subscriptions, monies pending investment, any balance of un-invested cash, cash resulting from the transfer in of an ISA, income payments, dividends, tax repayment or the proceeds of sale of Qualifying Investments will be held in a designated client account in accordance with the Rules.
48.4.4 We will only retain cash within your ISA for the purpose of applying it on your behalf to purchase your chosen Qualifying Investments.
48.4.5 We reserve the right to transfer any cash held for more than a period of twelve months, and which has not been reinvested, to your General Trading Account. This may be done at shorter notice on the instruction of the Plan Manager or other lawful authority.
48.5 Transfers
48.5.1 You may apply to transfer either the whole of an existing current years ISA to us, or the whole of your previous years' ISA’s, in accordance with the ISA Regulations. Your application to transfer an ISA will need to be made in conjunction with an application to open an ISA with us.
48.5.2 If you wish to transfer your ISA out to a new ISA Manager, the transfer of the account must be made in full. We do not allow a partial transfer out.
48.5.3 As we will not be able to execute your orders whilst a transfer of investments is taking place, we will not be responsible for any loss of income or capital growth during such period.
48.5.4 We will transfer your Qualifying Investments to a different ISA plan manager within 30 days of receiving written instructions to that effect, but provided that all fees and charges have been paid in full.
48.5.5 You shall be entitled to transfer your full ISA or make withdrawals without restriction.
48.5.6 At your request the Account and all rights and obligations of the parties hereto may be transferred to another account manager by you giving notice in writing to us and by the new plan manager accepting the account. A Written confirmation is required by the Plan Managers accepting the Account.
48.6 Investments
48.6.1 You authorize the Plan Manager to recover from the HMRC such tax credits on dividends that are reclaimable for the credit of the Account.
48.6.2 All investments acquired on your behalf will be subject to our approval. However, if an investment is made by us, in accordance with your instructions, which is subsequently found to be non-qualifying, HMRC may require the money or investment to be removed from your Account and any losses or profits will be for your Account.
48.6.3 Bonus issues of shares or units received can be retained in your plan so long as they are Qualifying Investments.
48.6.4 In the event of a takeover offer or redemption of securities held within your Account, we will elect to receive the proceeds, in cash (if that option is available), into your account, converting non-Sterling proceeds into Sterling where appropriate.
48.7 Custody
48.7.1 All investments held in your HB Markets Self Select ISA will be registered in the name of a nominee company owned by us.
48.7.2 Dividends, interest payments and cash entitlements due to you will be paid promptly to your Account.
48.7.1 Dividends, interest payments and cash entitlements received in a currency other than Sterling will be converted to sterling as soon as reasonably practicable. We shall be entitled to charge you any foreign currency costs. The exchange rate used will be the appropriate prevailing commercial rate available from our bankers. We will round down to the nearest pound all converted dividends, interest payments and cash entitlements and shall be entitled to retain any amounts arising out of this rounding process for our own account.
48.7.2 You hereby authorise us to act on your behalf in respect of CREST and to enter into any arrangement we consider to be necessary to facilitate the clearing of settlement of your transactions through CREST.
48.8 Charges and Expenses
48.8.1 You will pay to us the advertised annual fee on our web site for your ISA Account in advance as becomes due each year and at the outset of application for an ISA Account.
48.8.2 Your annual fee will be debited automatically from your General Trading Account.
48.8.3 All Account administration charges, but not commission and related bargain charges, will be deducted from the General Trading Account.
48.8.4 We may sell part or all of your holdings to cover any outstanding fees, charges or commission on your Account at our discretion.
48.9 Liability
48.9.1 The Plan Manager shall not be responsible for any loss or damage or depreciation in value of the Account or for its failing to produce a return on capital invested howsoever arising except insofar as the loss, damage or depreciation results directly from the fraud or wilful default or neglect of the Account Manager or by reason of breach of any of the Rules or Regulations.
48.9.2 You acknowledge that the value of, and income from, any investment in the Market may fall as well as rise and you may not get back the amount originally invested.
48.9.3 You also acknowledge that we have not given any advice as to the suitability of this investment service for you. You should consult an Independent Financial Advisor if you have any doubt that this investment service may not be suitable for you.
48.10 Subscriptions, Withdrawals, Terminations and Transfers
48.10.1 Subscriptions may be made at any time to your Account subject to the maximum annual subscription permitted by the Rules and Regulations.
48.10.2 Transfers to us must be from an ISA registered in your name.
48.10.3 Subject to the HMRC Rules and Regulations, (“Rules and Regulations”) the settlement of outstanding investment transaction(s), and any tax liabilities, charges and expenses, you may transfer your ISA or withdraw part or all of the investments in your Account at any time by giving us written instructions. Such transfer or withdrawal will take place as soon as reasonably practicable.
48.10.4 In the event of a withdrawal transfer of your Account any annual charges paid to us will not be repaid to you whether in whole or in part.
48.10.5 You shall be entitled to transfer your full ISA or make withdrawals without restriction.
48.10.6 Without prejudice to any other term of this agreement you or we may terminate this agreement without penalty or in the event that HB Markets ceases or intends to cease to be Plan Manager by giving written notice of not less than 30 days to the other party whereupon (and subject to payment for outstanding transactions, accrued fees and expenses and for sums due under the Regulations) we shall forthwith transfer or procure the transfer of the Account's investments to you or at your direction.
48.10.7 We may at our discretion complete any transactions commenced prior to receipt of a notice under clause 48.10.3.
48.10.8 We shall notify you if by reason of failure to comply with the Rules and Regulations the Account has or will become void.
48.10.9 Partial sales of stock will or withdrawals will be deemed to be capital for taxation purposes.
48.10.10 In the event you wish to close your ISA, any interest accumulated during that quarter will not be calculated nor applied to the Account before Account closure.
48.10.11 We offer no advice in respect of the Qualifying Investments you purchase within your ISA.
48.10.12 Where you subscribe to an ISA component in more than one tax year, each years subscription will be merged together as one portfolio.
48.10.13 Where a subscription or payment is made by a debit card such as Switch and we do not receive the funds from the Debit card provider, we will sell investments from your portfolio to meet any costs incurred.
48.10.14 Cancellation and Withdrawal of your ISA application will be permitted within the first 14 days after successfully applying for an ISA with us. If you cancel without making a subscription to your ISA, the Inland Revenue Rules and Regulations permit you to retain an ISA subscription for the current tax year.
48.10.15 If you subscribe by transferring funds or assets into the ISA or transfer an existing ISA into your new ISA with us, you will be deemed by the Inland Revenue to have invested in the ISA for that tax year. If you cancel your ISA and not transfer it to another provider you will lose your ISA subscription for that tax year.
48.10.16 We will refund the Annual Management Charge upon cancellation of an ISA within the initial 14 days if no transfer or subscription has been received and will not charge an exit fee.
48.10.17 Termination of an ISA after the initial 14 days will be charged at the applicable rate of charges as described in Commission Rate and Charges set out in the HB Markets Terms of Business and may mean your right to invest into an ISA in that tax year will be lost.
48.10.18 The effect of cancelling may have the effect of cancelling the entire ISA agreement and may also (where it is the case) delay you from entering into another ISA agreement until next year.
48.11 Death
48.11.1 Should you die your Account will cease to be exempt from tax, and the assets will be held by us awaiting instruction from your personal representatives, who may direct that the assets be sold or that the assets be registered in the names of the appropriate beneficiaries, subject to any restrictions relating to minimum holdings. We will comply with the reasonable requests of your personal representatives provided that such requests comply with the Rules and Regulations. Prior to any transfer that may result following your death we shall be entitled to deduct all amounts owing in respect of Transactions, accrued fees and expenses and sums owing under the Rules and Regulations and we shall be allowed to sell investments in the Account to raise any amount owing.
48.12 Records of Your Account
48.12.1 The Plan Manager shall make such returns to HMRC for the purposes of taxation as they are required to do by HMRC, and provide all taxation details to you, as may be required under the Rules and Regulations.
48.13 Assignment
48.13.1 Subject to the Rules and Regulations, we may assign this agreement and/or appoint another company to be the Manager of your Account under these Terms of Business on giving you one month's notice. The party to who we assign this agreement and/or the new Manager of your Account must be approved to act as a ISA manager by HMRC.
48.14 General
48.14.1 We reserve the right to refuse any application to subscribe to an ISA or open an Account without giving a reason for so doing.
© Copyright HB Markets plc (Version 13 January 2009)
