Safekeeping of funds and financial instruments

In accordance with the FCMC regulations and articles 129 and 1291 of the Financial Instrument Market Law of the Republic of Latvia, the Company shall deposit the money resources and/or financial instruments of customers separately (segregated) from its own money resources and financial instruments of other customers respectively.

The purpose of segregated holding of customers’ funds and financial instruments (Client money rule) is to prevent a possibility where financial markets intermediaries (credit institutions and investment brokerage companies) might use them to secure their obligations (in particular, investment brokerage companies are prohibited to use customers’ funds to satisfy creditors’ claims) or use customers assets (funds and financial instruments) for other purposes.

When deciding on to begin a business relationship with a credit institution, an investment brokerage company or a depository where customer funds or financial instruments will be kept, Renesource Capital, with due diligence and care, assesses the competence and the financial market reputation of this institution, as well as the requirements or the court practice that are effective in the respective country in regard to holding customer money, resources and financial instruments, that may adversely affect customers interests. 

In its turn, Renesource Capital is entitled to deposit financial instruments belonging to customers only with a partner (a credit institution, an investment brokerage company, a depository) that is subject to the regulations and legal requirements effective in the respective country in regard to segregated holding of customers’ financial instruments and is supervised.

The Company reassesses regularly (once a year) the competence of the existing partners (credit institutions, investment brokerage companies, depositories) and the conditions for holding customers’ financial instruments.

When building business relationships with partners (credit institutions, investment brokerage companies, depositories), Renesource Company ensures a nominee account opening. Funds and/or financial instruments on such account are reflected and accounted as funds and/or financial instruments of Renesource Capital customers.

In accordance with the Financial Instrument Market Law of the Republic of Latvia, Renesource Capital ensures annual inspection with the participation of an official auditor with respect to segregated holding of customers’ funds and financial instruments, on the basis of which an independent conclusion is provided.

In accordance with the accepted by Renesource Capital own capital management strategy and risk management limits, the Company doesn’t invest its available funds in such financial instruments as government securities or local government securities with fixed income (bonds) and asset-backed securities. The Company doesn’t participate in internal financing of customers’ transactions (repurchase transactions), i.e. it doesn’t finance with funds from its own capital.

Risk Disclosure Statement. Margin transactions (Forex, contracts for difference CFD, futures and futures options, stock options, REPO transactions, transactions in over-the-counter derivatives and transactions using broker credit, including selling short) involve higher risk. The level of risk increases with the leverage ratio. As the result of margin transactions, relatively high profits are possible with low level of initial investments, as well as significant losses which may exceed the principal amount of investments or the amount of the collateral. Please ascertain whether margin transactions in their essence and content suit the risk profile that was assigned to you by AS IBS Renesource Capital and whether the content of margin transactions corresponds to your investment goals.

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