Appendix A

Schedule of Protections Lost: the differences between the treatment of Retail and Elective Professional Clients

For the avoidance of doubt the points raised below do not constitute an offer or undertaking by Panima to provide any services to Retail Clients, or to categorise any client as a Retail Client, whether in the manner set out below or otherwise. Any references to “professional client” include: Per Se Professional clients and Elective Professional Clients as defined by the FCA. As an Elective Professional Client a “regulated firm” will engage with you subject to the minimum obligations set out below:

Exclusions of Liability

Regulated firms are not permitted to exclude or restrict any duty or liability when communicating with a retail client unless it is honest, fair and professional for that regulated firm to do so. Communications with professional clients are not subject to this rule, although regulated firms should at “all times” act honestly, fairly and professionally in accordance with the best interests of a professional client.

Information about a regulated firm, its services, and its remuneration

Regulated firms are able to agree a limited application of rules as to their costs and associated charges when dealing with elective professional clients.

Communicating with retail clients

A. The FCA Rules state that a communication, including financial promotions to an Elective Professional Client need not contain the same information or be presented in the same manner as to a retail client. Nonetheless, regulated firms, provided it is proportionate to the recipient, are to ensure that all communications with clients are fair, clear and not misleading.

B. The requirements relating to distance communications will not apply if, as an Elective Professional Client, you fail to meet the definition of “consumer”. Financial Promotions directed to Elective Professional Clients are not subject to the specified internal approval and record keeping procedures as is the case with Retail Clients.

Providing product information

A. Elective Professional Client may receive a less detailed description of the risks associated with a particular designated investment. Similarly, in relation to investments subject to an offer to the public, a regulated firm need not inform the Elective Professional Client regarding where a prospectus has been made available.

B. Regulated firms are not required to provide Elective Professional Clients with details required to make a fair assessment of the guarantor of any third-party guarantees incorporated in the investment. Likewise, the requirements to provide information concerning designated investments in advance to providing a service will not specifically apply to an Elective Professional Client

Reporting information to clients

Regulated firms must inform all retail clients where the overall value of the portfolio depreciates by 10% and thereafter at multiples of 10%, no later than the end of the business day in which the threshold is exceeded.

Firms that hold a retail client account that includes positions in leveraged financial instruments or contingent liability transactions shall inform the client, where the initial value of each instrument depreciates by 10% and thereafter at multiples of 10%.

Appropriateness and Suitability

A. Regulated firms assess the product/service as appropriate for you and can assume that you have the necessary level of experience and knowledge to understand the risks involved in relation to any investment, service, product or transaction and can assume that you are able to financially bear the investment risks consistent with the fund’s investment objectives.

Business outside the scope of the Markets in Financial Instruments Directive (‘MiFID’)

B. Professional clients are not granted the additional protections under the FCA Rules to retail clients for business conducted outside the scope of MiFID.

Complaints

A professional client may have no right of access to the Financial Ombudsman Service (FOS) although certain rights may still be available under the Financial Services Compensation Scheme (FSCS).

Order Execution

The firm may take into consideration the classification of the client in following its Order Execution Policy, as well as in providing information, including product information, to clients.

Rebates and Commissions

When dealing with retail clients, receiving and retaining monetary and non-monetary commissions is not permissible for firms, other than ‘minor non-monetary benefits’.

Consumer Duty

A professional client will not be afforded the protections under PRIN 2A of the FCA Handbook which consists of:

A. A Consumer Principle 12 requiring a firm to act to deliver good outcomes for retail customers;

B. Three overarching cross-cutting rules that set out how Principle 12 should apply in practice and require firms to act in good faith, avoid causing foreseeable harm and to enable and support retail customers to pursue their financial objectives;

C. Four outcomes that set out rules and guidance on expectations for firm conduct with consumers relating to products and services, price and value, consumer understanding and consumer support.

Professional clients will instead be afforded protection under FCA Principle 6 (Customers’ interests) which requires the firm to pay due regard to the interests of its customers and treat them fairly and Principle 7 (Communications with clients) which requires to the firm pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.

Further Important InformationChanging your categorisation

Please note that once you are categorised as an Elective Professional Client, the FCA Rules state that it will be your responsibility to keep us informed of any changes that could affect your categorisation, and we require you to do so by writing to us within seven (7) business days of any actual or proposed changes occurring. In addition we remind you that you may request to re-classify as a retail client. However where Panima does not have a permission to deal with retail clients, Panima will be forced to cease transacting with you as it would be in breach of the FCA Rules.