Details related to client classification as per the Financial Activities Rulebook issued by SCA

In accordance with the rules and regulations issued by the Securities and Commodities Authority (SCA), clients will now be classified into three categories based on their qualification, experience and financial capability. The aim of this classification system is to ensure that clients receive appropriate investment advice and services that align with their individual needs and risk appetite as well as appropriate level of regulatory protection.

Client Classification

The three client categories are as follows:

Ordinary Investor

Any natural or legal person who is not a Professional investor or Counterparty.

Professional Investor

Professional investor by nature:

1. International bodies and organizations whose members are states, central banks, or national monetary authorities.
2. Capital market institutions licensed by the Authority or a similar supervisory authority.
3. Financial institutions.
4. A regulated financial institution, a domestic or foreign investment fund, a regulated pension fund management company, or an organized pension fund.
5. Any body whose main activity is the investment in financial instruments, asset securitization, or financial transactions.
6. Any company whose shares are listed or accepted to being traded in any market of an IOSCO state member.
7. A Trustee of trust who has, during the past twelve months, assets of not less than AED 35 million.
8. The owner of a license according to the regulations of (same family office) with respect to only practicing its activities to perform its duties (such as same family office) and has assets of not less than AED 15 million.
9. Joint ventures or civil establishments that have or have had at any time during the past two years net assets of not less than AED 25 million and are calculated in the case of the joint venture without deducting the loans owed to any of the partners.
10. A large undertaking person who, on the date of his last financial statements, fulfills at least two of the following requirements:
    
    
    1. His total assets are not less than AED (75) million before deducting short and long-term liabilities.
    2. Annual net income of not less than AED (150) million.
    3. The sum of cash and investments in the balance sheet or the total of his authorized capital minus his paid-up capital is not less than AED (7) million.

Second: Professional investor (based on the service):

1. Practicing an activity involving the provision of credit facilities for commercial purposes for any of the following:
   
   
   1. An undertaking person.
   2. The controlling body of the undertaking person.
   3. Any member of the group to which the undertaking person belongs.
   4. Any joint investment venture that participates in the undertaking person.
2. A person who practices the service of arranging credit facilities and investment deals related to structuring, financing and companies.

Third: Professional investor (resident):

1. A natural person who owns net assets - excluding the value of his main residence - of not less than AED (4) million.
2. A natural person approved by the Authority or a similar supervisory authority, an employee at the licensed body, a regulated financial institution, or whoever has been employed by either of them during the past two years or has sufficient knowledge and experience in the field of investment and its risks in accordance with the suitability standards, or represented by a body licensed by the Authority in a manner that does not conflict with the terms of its license.
3. A natural person who has a joint account with a natural person representing a resident professional investor according to point (1) (the main account holder), provided that the following conditions are met:
   
   
   1. The (account participant) must be a member of the (main account holder) family, up to the second degree.
   2. The account is used to manage the investments of the main account holder and his subscribers.
   3. Written confirmation from the person subscribing to the account that investment decisions related to the joint account are made on his behalf by the main account holder.
4. Any establishment with a special purpose or a special legal form such as the trust and the institution founded only to facilitate the management of an investment portfolio of a natural person representing a resident professional investor in accordance with point (1).
5. Undertaking person who meets the following conditions:
   
   
   1. The total of his cash and investments in the balance sheet, or the total of his authorized capital minus the paid-up capital, is not less than AED (4) million.
   2. Has sufficient experience and understanding of the markets, financial products and related financial transactions and the risks associated therewith, in accordance with suitability standards.
6. Undertaking person who has:
   
   
   1. A controlling natural person who owns the majority of shares in a company, is able to control the majority of voting rights therein, or has the power to appoint or remove the majority of its board of directors.
   2. Holding or subsidiary company.
   3. A joint venture partner.

Counterparty

A body licensed by the Authority or a similar supervisory authority if it is a client of another licensed party, and the client is considered a counterparty if it is:

1. A Professional investor (by nature) as per above
2. A professional (resident) investor if it is owned by a holding company that is a (professional investor by nature) in accordance with point 8 till 10 under Professional investor by nature above. This definition applies with respect to the classification of clients. Otherwise, the counterparty is the counterparty for each trading order.

We at Emirates NBD Securities, are committed to ensuring that you are classified appropriately and receive the level of service that best aligns with your investment objectives. We kindly request you to update your information on a regular basis and provide any necessary details required for completing your classification process.

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