MiFID II - General Information

Since 1 November 2007, the European MiFID Directive1) (the "MiFID Directive") has provided a European framework  for   the   protection  of  clients   investing in financial products by defining various protection mechanisms implemented by European financial actors. The interest of the client is at the heart of this set of mechanisms, because markets and financial products are complex and entail risks inherent in any investment, although the level of these risks is variable.

Ten years on, the MiFID Directive has been reviewed in light  of the developments in financial markets and products, but also to take into account the lessons of the subprime crisis that erupted in 2008. In particular, the new provisions of the MiFID 2 Directive aim to strengthen  existing  protection  measures and  create new  ones, but  also  to  ensure greater  transparency in  terms  of  both  services provided  and  costs. The new provisions of  this  Directive came into  force on 3 January 2018.

In this brochure, we inform you of the main steps taken to provide you with an optimal level of protection for your investments, taking into account various factors such as your knowledge and experience of financial instruments and your investment objectives.

Rather than give a purely theoretical summary of the contents of the MiFID 2 Directive, we have made this brochure instructive, explaining not only what these measures consist of but also how they provide effective protection. While it was not feasible to discuss each of the measures in detail, you will  nevertheless find sufficient information below to understand their usefulness and the benefits you will derive from them.

This   brochure   is    intended   for    all    clients    of Banca popolare dell’Emilia Romagna (Europe) international s.a.  who invest in financial instruments. It contains additional information that is complementary to the contractual provisions contained in the General Terms and Conditions of the Bank and other agreements.

The provisions of MiFID 2 apply mainly  to  securities investment services. In practice, you benefit from  its application notably when you subscribe to discretionary investment  management or  advisory services, or  an order receipt and transmission service (i.e. you manage your portfolio yourself by placing your orders directly at the bank without receiving any advice).

The MiFID 2 Directive governs a range of financial services, most of which are provided by the bank.

Discretionary management and order receipt and transmission services concern financial transactions performed on your account and in your securities portfolio.

Each of  these  services corresponds to  a  particular  offering  whose  characteristics  are  summarised below. If necessary, you will  find additional information later in this brochure or in the contracts signed at the time of

Client classification

The MiFID 2 Directive allows a more or less intense level of protection to be provided depending on the category in which each client is classified according to predefined criteria.

There are  three  categories: non-finance-professional clients, finance-professional clients, and eligible counterparties.

If you need additional info pleae:

■  consult the MiFID 2 questionnaire concerning your knowledge and experience;

■  contact our Bank.

In any event, if Banca popolare dell’Emilia Romagna (Europe) International s.a. provides you with an investment service governed by the MiFID 2 Directive, you will  receive notification of your classification when you enter into a relationship with the bank.

What should I do if I have several accounts?

When you have several accounts in our bank, you only need fill  out the questionnaire once! Its outcome will impact each of your accounts, while you may adjust the specific objectives of each account as appropriate using the waiver form.

This solution  is  also valid  if  you have one account under an order receipt and transmission offering and another under a discretionary management offering: you fill  in  a single questionnaire relating  to your knowledge and experience and it will be taken into consideration for all of your accounts.

On the other hand, a waiver request could be valid only for the account for which it was requested and accepted or for all of the accounts.

How long is my profile valid?

Your profile remains valid as long as nothing changes in your personal, family and/or professional situation. To ensure this periodically, we will ask you to confirm, even verbally, that there has been no change in your situation. This will confirm that your profile is still in line with your investment objectives and your risk tolerance.

What if changes in my situation occur in the meantime?

Your relationship with the bank is a long-term one, and what is true when determining your profile will not necessarily be so tomorrow: your income may increase, your family grows, etc. It is also possible that  financial markets move in such a way that  you would be willing  to take a little  more risk for a better return or, conversely, that they prompt you to adopt a more cautious profile.

In this case, we strongly recommend that you contact us to talk directly.  Some changes in your situation may have no impact on your investor profile, while others will require adjustments that should be taken into  account quickly,  especially if  you have subscribed to a discretionary management offering.

In any case, we will ask you to fill out a new questionnaire to determine your profile taking into account the new answers you give.

The specific objective I had chosen for management of my portfolio has changed. What should I do?

It is just as important that you let us know about this change, because then the special profile will more than likely have to be reviewed. Again, direct contact with your account manager is the recommended procedure, but you can also submit a new waiver request containing the new objective.

There are several joint account holders and our individual profiles are different. How will  the portfolio be managed?

In this case, by default we adopt the most conservative profile of all the joint account holders. If, however, you wish to have another type of profile adopted, you may fill out a waiver request form, signed by all the joint account holders, specifying the reason for the waiver request.

This special profile can be terminated at any time by one or all of the joint account holders, and the rule of the most conservative profile will then be applied by the bank.

subscription to one of these offerings.

Order Receipt and Transmission

What is this?

The bank receives your instructions  for  buying and selling  financial  instruments.

The bank can give you information about the products you plan to buy or sell, but the law prohibits any investment advisory relationship.

Who is responsible for investment decisions?            

You remain responsible for choosing your investments and monitoring your portfolio.

 What protection do you enjoy?

The questionnaire concerning your  knowledge and  experience ensures that  you understand the characteristics and risks related to the asset classes of the financial products that you may acquire.

If you are a  non-finance-professional client, when we find that you do not have the necessary knowledge and/or experience, we suggest providing you with all relevant information about the characteristics of the product you are considering buying and the risks entailed, allowing you to make your investment decision on a fully informed basis.

What information do you receive on costs and expenses?

In  addition  to  the  price grid  received when you open your account, before the execution of each of your transactions you will  receive an estimate of the costs and expenses  (including possible distribution  commissions, see below) entailed by the proposed transaction and an illustration  of their  impact on the expected return.

At least once a year, a summary of all these costs and expenses will be sent to you.

How are your orders executed?

All your orders are executed according to the bank's order execution policy, a summary of which can be found on our website or can be requested directly to us.

 What does the bank do with any distribution commission received?

The bank receives from some fund managers a commission, called a distribution commission, as remuneration for its role as distributor of these funds. This commission is deducted from the fund’s price (the Net Asset Value - NAV) and is subsequently transferred to the bank according to specific conditions agreed between the fund and the bank.

The amount of these distribution commissions received and held by the bank is shown in the estimated costs and expenses (see above).

 How can you know your portfolio's value?

 You can know the value of your portfolio at any time by contacting us.

At least once a year, the bank sends you a statement detailing at least the assets held in your portfolio and their valuation.

Discretionary portfolio management

What is this?

Under the terms of a specific contract, you entrust management of your portfolio to the bank.

Transactions are decided by the bank’s specialists according to the management strategy that you have chosen in line with your investor profile.

 Who is responsible for investment decisions?

 The bank is committed to managing your portfolio in the most professional manner, based on a strategy you have chosen. However, it is not liable for changes in the price of financial products acquired and any other incident that may affect the value of an investment (e.g. bankruptcy of the issuer, fluctuation of exchange rates, etc.).

We recommend that you check regularly to see if the strategy you have chosen is still right for you. To help you, you can contact your advisor at any time. In any case, it is essential that you read the management reports that are sent to you on a quarterly basis.

 What protection do you enjoy?

 The questionnaire concerning your knowledge and experience allows us to verify that you understand the characteristics and risks related to the asset classes of the financial products that may be used under the discretionary management agreement. When we find that you do not have the necessary knowledge and/or experience, we suggest providing you with all useful information relating to the characteristics of the products in question and the risks involved.

In addition, we determine your investor profile via the answers you provided to us via the ad hoc questionnaire. Your profile then enables us to check that the management strategy is in line with your investment objectives, your ability to withstand potential losses and your tolerance for the risks related to the financial products in question.

What information do you receive on costs and expenses?

 Before signing the discretionary management agreement, the bank provides you with an estimate of the discretionary management service fee and transaction fees based on a typical portfolio determined by the offer you have subscribed to and your investment profile.

At least once a year, a summary of all these costs and expenses will be sent to you.

   How are your orders executed?

All your orders are executed according to the bank's   order   execution policy, a summary of which can be found on our website or can be requested directly to us.

Advisory Management

Actually the Advisory management service is not provided by our Bank.

We will offer it to you soon this service that is what you need if you wish to keep control of your investments while listening to recommendations from our experts. We will guide you, providing you with all of the information you need to make decisions and monitor your portfolio. Specifically, this will be achieved through:

  • Regular contact with your relationship manager or a financial adviser to review your portfolio.
  • Personalised and proactive investment advice tailored to your situation and investor profile.
  • Buy, hold and sell recommendations with a target price.
  • The availability of our trading room, providing (conditional) access to most stock markets on the best terms.

You will continue to manage your portfolio yourself but will enjoy much greater responsiveness, receiving specific, detailed information on a regular basis.

Preventing conflicts of interest

In order to best serve your interests, the bank has adopted a series of provisions to prevent situations of conflict of interest from occurring. These provisions are intended to prevent the bank from unduly serving its own interests or those of other clients rather than your interests.

In short, these measures are preventive and control-focused, by regularly reviewing the bank's activities to identify situations that could be the source of conflicts of interest.

Safeguarding financial instruments

On a continuing basis, the bank ensures that your assets (funds and financial instruments) registered in its books undergo safeguard measures to ensure their preservation. These measures include, inter  alia, separation of the bank's assets from those of its clients, keeping the asset register and account, performing reconciliations and sending to all clients a statement of their financial assets.