Deltastock’s Policy on Conflicts of interest

1. Deltastock’s Policy on Conflicts of interest /Policy/ is an integral part of the Rules on the Internal Organization of Deltastock and has been written in compliance with the requirements of the Markets in Financial Instruments Act /MFIA/ and Ordinance № 38 on the requirements to the activities of the investment intermediaries /Ordinance № 38/.

2. The purpose of this Policy on Conflicts of interest is to create circumstances for avoiding and to determine conflicts of interest, and when such conflicts arise – to guarantee the fair treatment of the clients, to define the disclosure of information and to prevent damaging of clients’ interests.

3. Pursuant to Art. 41, Para 1 of Ordinance № 38, “conflict of interests” is a situation, which arises in relation to the provision of investment and ancillary services by Deltastock Inc., and may damage the interests of clients.

4. In establishing the types of conflicts of interest, which result from the provision of investment and/or ancillary services, whose existence may damage a client’s interest, Deltastock Inc. will take into account whether the person, who works under a contract for Deltastock or the person who is directly or indirectly linked to Deltastock by control, falls into one of the following cases as a result of the provision of investment and/or ancillary services or otherwise:

            4.1. is likely to make a financial gain or avoid a financial loss at the expense of the client;

            4.2. Has an interest in the outcome of a service provided to the client or a transaction carried out on behalf of the client, which is distinct from the client’s interest  in that outcome;

            4.3. has a financial or other incentive to favor the interest of another client or a group of clients over the interests of the client;

            4.4. Carries out the same business as the client;

            4.5. Receives or will receive from a person other than the client, benefits in connection with provided to the client service, in the form of cash, goods or services in violation of Art. 14, or other than the standard fee or commissions for that service.

5. Deltastock shall adopt, apply and maintain appropriate rules and measures for preventing the performance of the following actions by a person, who works under a contract for Deltastock and who participates in the performance of activities, which may give rise to a conflict of interests, or who, due to the realized by such person activities for Deltastock has access to inside information within the meaning of the Law on Measures against Market Abuse with Financial Instruments /LMMAFI/ or to some other confidential information about clients or transactions with or for clients:

5.1. Conclusion of a personal transaction which meets some of the following conditions:

a) Its execution by that person is prohibited by the LMMAFI;

b) It is connected with abuse or unlawful disclosure of confidential information;

c) Its execution is in contradiction with, or may result in contradiction with an obligation of the investment intermediary according the MFIA or its implementing instruments;

5.2. the provision of advice or rendering of assistance, outside of the usual performance by the person of activities for the investment intermediary, to another person to conclude a transaction with financial instruments, which if it were a personal transaction of the person who works under a contract for the investment intermediary, would be prohibited according to Art. 36, Para 3, Item 1 and Art. 42, Para 3, Item 1 and 2 of Ordinance № 38;

5.3. Disclosure outside of the usual performed by such person activity for the investment intermediary of information or opinion of another person, provided that the person who works under a contract for the investment intermediary, knows or it may reasonably be assumed to know that as a result of such disclosure the person will perform or is likely to perform some of the following activities:

a) To conclude a transaction in financial instruments, which, if it would be a personal transaction of the person who works under a contract for the investment intermediary, would be prohibited according to Art. 36, Para 3, Item 1 and Art. 44, Para 3, Item 1 and 2 of Ordinance № 38;

b) To provide advice or to render assistance to another person in concluding a transaction under letter “а”.

6. The rules under point 5 shall ensure that:

а). Every person who works for Deltastock is acquainted with the restrictions in the conclusion of personal transactions and the measures adopted by Deltastock on the personal transactions and the disclosure of personal information according to para. 1 of Ordinance № 38;

b). Deltastock is informed in due time of any personal transaction concluded by the persons who work for the investment intermediary, by notification or otherwise, allowing Deltastock to establish the conclusion of such transactions;

c) Records are kept of the personal transactions of which Deltastock has been informed or which have been established by Deltastock, including authorizations or prohibitions in relation to such transactions.

7. In the cases where there is a contract concluded between Deltastock and a third person for the assignment of the performance of an activity to that third person, the contract must include an obligation of that person to keep a register of personal transactions, concluded by persons under point 5, and to provide such information to the investment intermediary upon its request.

8. The requirements under point 5 and 6 shall not apply to personal transactions that meet any of the following conditions:

a) personal transactions concluded when managing an individual portfolio, if there is no preceding the conclusion of the transaction exchange of information in relation to the transaction between the person carrying out the management, and the person who works under a contract for the investment intermediary, or another person for whose account the transaction is concluded;

b) personal transactions having as a subject units of undertakings for collective investment or units of undertakings for collective investment, which are subject to supervision according to the legislation of a Member State, requiring level of risk spreading in their assets, equivalent to that with the collective investment schemes, if the person who works under a contract for the investment intermediary, or another person for whose account the transaction is concluded, does not participate in the management of that undertaking;

9. Deltastock Inc provides conditions for the prevention of conflicts of interest, and if such arise it procures their just and fair resolution.

10.  The employees of Deltastock Inc. are required to watch for the existence of conflicts of interest according to Art. 3 of this Policy in the process of exercising their duties and if such arise to inform immediatly the Internal Control Manager.

11.  When a conflict of interest arises between the client and the investment intermediary/ or a party directly or indirectly linked to Deltastock Inc by control/ the client’s interest always comes before that of  Deltastock Inc or before the interest of the party, directly or indirectly connected to Deltastock Inc through control.

12. When a conflict of interest arises between the client and an employee of the investment intermediary, the interest of the client comes first, where the employee may be refused the performing of the respective service.

13. When a conflict of interest arises between clients and the investment intermediary the following prinicples apply:

● equality in the interest of clients and no preference in the interest of one client to the interest of another client;

● disclosure of information to the client of the existance of potential or specific conflicts of interest, if this does not break the legal requirements for confidentiality and does not threaten the interests of another client;

● keeping of strict confidentiality on behalf of the investment intermediary and its employees for the conclusion of transactions of a conflict type for the purpose of avoiding an actual conflict of interests, as well as of the risk of performing transactions based on inside information.

14. A policy of independence and seperation of functions of departments and employees performing different functions, was applied for the purpose of avoiding conflicts of interest /described in Part II and Part VI of the Rules of internal organizaton of Deltastock Inc/.

15. The employees of the Internal control Department report daily to the Executive Director and the Procurator of the company of any conflicts of interest that may have arised, and of the measures undertaken to resolve them.

  16. If the employees of the Internal control Department are not able to resolve the arisen conflicts of interest, they will immediately inform the Executive director and the Procurator of the company. In this case, the conflicts of interest are resolved by the Executive director and the Procurator of Deltastock Inc.

17. If a just and satisfactory to the clients resolution of the conflict is impossible to be provided, Deltastock Inc. will refuse to perform the service.

18. If, in spite of the implementation of this Policy, a risk for the interests of the client continues to exist, Deltastock Inc may not perform a transaction for the account of the client, if it has not informed the client of the general manner and/or sources of the potential conflicts of interest. In these cases, before performing a transaction to the client’s account, that involves a conflict of interests, Deltastock Inc provides the client with information (recorded on a data storage device), regarding the conflict of interest. The information provided to the client shall be sufficient in accordance with the client’s characteristics for him/her to make an informed decision regarding the investment or ancillary service, in connection with which a conflict of interests arises. The information is provided to the clients by the employees of the  Front Office Department.

19.  Deltastock Inc. keeps and updates information about the types of investment and ancillary services or investment activities, performed by the investment intermediary or at his account, at the provision of which a conflict of interest arises or may arise in the process of performing a service or activity, which leads to a substantial damage of the interests of the client or clients of the investment intermediary.

20. According to Art. 74, Paragraph 1, Clause 2 of  Ordinance № 38 Deltastock Inc keeps all the documentation and information, regarding its activity, on a magnetic/ electronic data storage device or on paper, including the information regarding conflicts of interests.

21.  Deltastock Inc will present to its employees this Policy on conflicts of interest and will ensure they observe it.