Regulated by the Cyprus Securities and Exchange Commission

Authorisation № 162/12

CLIENT CATEGORIZATION

A notably important requirement introduced by MiFID and adopted by the Investment Services and Activities and Regulated Markets Law of 2007 (the “Law”) is the requirement of client classification either as:

- Retail Client,

- Professional Client or

- Eligible Counterparty.

The criteria used for classification of clients takes into consideration their size and level of professional knowledge and expertise in the financial market. The classification in effect enables appropriate level of protection to be awarded to clients based on their vulnerability to risks.

The Company shall inform a Client of its client categorization prior to providing a service or carrying out a transaction. Categorization of the Client is carried out taking into consideration of the Client’s information obtained by the Company from the Client. The Client may request the Company to be classified in a different category. The Company may also, in certain cases, change the Client's category.

Retail Client

Retail client means every client which is not a professional client or eligible counterparty.

Normally Retail Clients are smaller sized customers and have less expertise. As a result, Retail Clients are awarded a higher level of protection. In order to provide proper protection to Retail Clients, the Company shall, prior to providing any service to Retail Client, request from the Retail Client information on its market knowledge and experience.

Professional client

Professional client as defined by APPENDIX II (section 2) of the Law is a client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs. In order to be considered a professional client, the client must comply with the following criteria:

Part A)Entities which are required to be authorized or regulated to operate in the financial markets. The list below should be understood as including all authorized entities carrying out the characteristic activities of the entities mentioned: entities authorized by a member state under a European Community Directive, entities authorized or regulated by a member state without reference to such Directive, and entities authorized or regulated by a non Member State:

•Credit institutions;

•IFs;

•Other authorized or regulated financial institutions;

•Insurance undertakings;

•Collective investment schemes and management companies of such schemes;

•Pension funds and management companies of such funds;

•Commodity and commodity derivatives dealers;

•Locals;

•Other institutional investors

•National and regional governments, public bodies that manage public debt, central banks, international and supranational institutions such as the World Bank, the International Monetary Fund, the European Central Bank, the European Investment Bank and other similar international organizations.

•Other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitization of assets or other financing transactions.

•Large undertakings meeting two of the following size requirements, on a proportional basis:

balance sheet total at least 20 000 000 euro

net turnover at least 40 000 000 euro

own funds at least 2 000 000 euro

Part B)Clients who may be treated as professionals on request. Identification criteria:

Clients other than those mentioned in Part A above, including public sector bodies and private individual investors, may also be allowed to waive some of the protections afforded by the conduct of business rules of the Company. The Company should therefore be allowed to treat any of the above clients as professionals provided the relevant criteria and procedures mentioned below are fulfilled. These clients should not, however, be presumed to possess market knowledge and experience comparable to that of the categories listed in Part A above. Any such waiver of the protection afforded by the standard conduct of business regime shall be considered valid only if an adequate assessment of the expertise, experience and knowledge of the client, undertaken by The Company, gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the client is capable of making his own investment decisions and understanding the risks involved.

The fitness test applied to managers and directors of entities licensed under European Directives in the financial field could be regarded as an example of the assessment of expertise and knowledge. In the case of small entities, the person subject to the above assessment should be the person authorized to carry out transactions on behalf of the entity.

In the course of the above assessment, as a minimum, two of the following criteria should be satisfied:

a)the client has carried out transactions, in significant size, on the relevant market at an average frequency of 10 per quarter over the previous four quarters,

b)the size of the client's financial instrument portfolio, defined as including cash deposits and financial instruments exceeds 500 000 euro

c)the client works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged.

Before deciding to accept any request for waiver the Company must take all reasonable steps to ensure that the client requesting to be treated as a professional client meets the relevant requirements stated in paragraph (1) of Part b above.

Professional Clients shall not be entitled to protection resulting from an Investor-compensation Fund established under the Law.

Professional clients are responsible for keeping the Company informed about any change, which could affect their current categorization. Should the Company become aware however that the client no longer fulfils the initial conditions, which made him eligible for a professional treatment, the Company must take appropriate action.

Eligible Counterparty

According to section 29 of DIRECTIVE DI144-2007-02 Investment Company(“IF”) may recognize an undertaking as an eligible counterparty if that undertaking falls within a category of clients who are to be considered professional clients in accordance with the first, second and third paragraph of Part A, of Annex II of the Law, excluding any category which is explicitly mentioned in Section 41(2) of the Law.

IF may also recognize as eligible counterparties undertakings which fall within a category of clients who are to be considered professional clients in accordance with Part B above. In such cases, however, the undertaking concerned shall be recognized as an eligible counterparty only in respect of the services or transactions for which it could be treated as a professional client.

Where, pursuant to the second subparagraph of Section 41(2) of the Law, an eligible counterparty requests treatment as a client whose business with an IF is subject to Sections 36, 38 and 39 of the Law, but does not expressly request treatment as a retail client, and the IF agrees to that request, the IF shall treat that eligible counterparty as a professional client.

However, where that eligible counterparty expressly requests treatment as a retail client, the provisions in respect of requests of non-professional treatment specified in the 1st, 2nd and 3rd paragraph of Part A,of Annex II of the Law shall apply.

Eligible counterparties will not be entitled to protection resulting from an Investor-compensation Fund established under the Law. Furthermore, the Company will not be obliged to evaluate their market knowledge and experience as such Clients are presumed to possess market knowledge and experience, whereby all services provided to such Clients shall be deemed suitable for them.

Eligible counterparties are responsible for keeping the Company informed about any change, which could affect their current categorization. Should the Company become aware however that the client no longer fulfils the initial conditions, which made him eligible for a professional treatment, the Company must take appropriate action.

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