Legal information

1. General

1.1 Raison when providing with any Financial Products or Financial Services to any Person must classify you as one of the following categories of Client:

1. a Retail Client;
2. a Professional Client; or
3. a Market Counterparty.

1.2 Raison must notify you as a new Client of your classification as a Retail Client, Professional Client, or Market Counterparty in accordance with COB in respect of the Financial Product or Financial Service being provided to you.

1.3 Raison may classify you as belonging to different categories of Client in respect of:

1. a specific Financial Product, Financial Service, Transaction; or
2. different types of Financial Products or Transaction, which are to be provided to, or carried out on behalf of, that Person.

2. Retail Clients

2.1 Retail client is any Client that is not a Professional Client or a Market Counterparty. Retail Clients (Natural Persons and Legal Entities) will receive the highest level of protection.

2.2 Raison may choose to provide Financial Products or Financial Services to any Person as a Retail Client simply by classifying that Person as a Retail Client. If Raison classifies you as a Retail Client in this way, it will not be required to assess whether you would otherwise be classified as a Professional Client or a Market Counterparty.

3. Professional Clients

Professional Client is a Client who possesses sufficient experience and understanding of relevant financial products, financial services, transactions and any associated risks. A Professional Client is a Client that is either a Deemed Professional Client or an Assessed Professional Client.

4. Deemed Professional Client

4.1 Each of the following entities is a Deemed Professional Client unless it is a Market Counterparty or is given a different classification under COB:

1. a national or regional government;
2. a public body that manages public debt;
3. a central bank;
4. an international or supranational institution (such as the World Bank, the International Monetary Fund, or the European Investment Bank) or other similar international organisation;
5. an Authorised Firm (at AIFC), or any other authorised or regulated financial institution, including a bank, securities firm or insurance company;
6. an Authorised Market Institution (at AIFC), or any other authorised or regulated exchange, trading facility, central securities depository, or clearing house;
7. a Collective Investment Scheme or its management company, or any other authorised or regulated collective investment undertaking or the management company of such an undertaking;
8. a pension fund or the management company of a pension fund;
9. a commodity dealer or a commodity derivatives dealer;
10. a Large Undertaking as specified below;
11. a Body Corporate whose shares are listed or admitted to trading on any exchange of an IOSCO member country;
12. a trustee of a trust which has, or had during the previous 12 months, assets of at least USD 10 million; or
13. any other institutional investor whose main activity is to invest in financial instruments, including an entity dedicated to the securitisation of assets or other financial transactions.

4.2 Large Undertaking

A Person is a Large Undertaking, if it met, as of the date of its most recent financial statements, at least two of the following requirements:

1. it has total assets of at least USD 20 million on its balance sheet;
2. it has a net annual turnover of at least USD 40 million; or
3. it has its own funds of at least USD 2 million.

5. Assessed Professional Clients: Individual Clients

5.1 Raison may treat you, as an Individual Client, (a Person who is a natural person and not an Undertaking) as an Assessed Professional Client if:

1. you have net assets of at least USD 100,000; and
2. either:

a. Raison assesses the Client, on reasonable grounds, to have sufficient experience and understanding of relevant Financial Products, Financial Services, Transactions and any associated risks; or b. The Client works or has worked in the previous two years in an Authorised Firm (at AIFC) or any other authorised or regulated financial institution, including a bank, securities firm or insurance company, in a position that requires knowledge of the type of Financial Products, Financial Services or Transactionsenvisaged; and

3. the following procedure is followed:

a. the Client must confirm in writing to Raison that it wishes to be treated as a Professional Client either:

i. generally; ii. in respect of a specific Financial Product, Financial Service, Transaction; or iii. in respect of a type of Financial Product, Financial Service, or Transaction;

b. Raison must give the Client a clear warning in writing setting out the protections that the Client may lose as a result of giving up its classification as a Retail Client; and

c. The Client must confirm in writing, in a separate document from the Terms of Service or another contract, that it is aware of the consequences of losing such protections.

5.2 The calculation of an individual Client's net assets:

1. must exclude the value of the primary residence of the Client; and
2. may include any assets held directly or indirectly by the Client.

5.3. Assessing experience and understanding

Raison must, where applicable, consider the following matters in the assessment of experience and understanding:

1. the Person’s knowledge and understanding of:

a. the relevant Financial Products, Financial Services, and Transactions; and b. any associated risks, either generally or in relation to a specific Financial Product, Financial Service, or Transaction;

2. the length of time during which the Person has participated in financial market activity;
3. the frequency with which the Person has carried out Transactions;
4. the extent to which the Person has previously relied on professional financial advice;
5. the size and nature of Transactions that have been undertaken by, or on behalf of, the Person in financial markets;
6. the Person’s relevant qualifications or training;
7. the composition and size of the Person’s portfolio of Investments; and
8. any other matters which Raison considers relevant.

5.4 Legal structures or vehicles containing an individual's investment portfolio

Raison may classify as an Assessed Professional Client a legal structure or vehicle, including an Undertaking, trust or foundation, that is set up solely for the purpose of managing the investment portfolio of an individual where that individual has been assessed as meeting the requirements of clause 5.1.

5.5. Individual joint account holders

Raison may classify as a Professional Client an individual (the “joint account holder”) who has a joint account with an individual assessed as meeting the requirements in clause 5.1. (the “primary account holder”) if:

1. the joint account holder is a Family Member of the primary account holder;
2. the account is used for the purposes of managing Investments for the primary account holder and the joint account holder;
3. the following procedure is followed:

a. the joint account holder must confirm in writing to Raison that investment decisions relating to the joint account are generally made for, or on behalf of, him by the primary account holder; b. the joint account holder must confirm in writing to Rison that he wishes to be treated as a Professional Client either:

i. generally; ii. in respect of a specific Financial Product, Financial Service or Transaction; or iii. in respect of a type of Financial Product or Transaction;

c. Raison must give the joint account holder a clear warning in writing setting out the protections that the joint account holder may lose as a result of giving up his classification as a Retail Client; and d. the joint account holder must confirm in writing, in a separate document from the Terms of Service or another contract, that he is aware of the consequences of losing such protections.

6. Assessed Professional Clients: Undertakings

6.1 Raison may treat an Undertaking as an Assessed Professional Client if:

1. Raison assesses the Undertaking (which may involve assessing an individual or individuals authorised to make investment decisions on behalf of the Undertaking), on reasonable grounds, to have sufficient experience and understanding of the relevant Financial Products, Financial Services or Transactions and any associated risks; and
2. the Undertaking has its own funds of at least USD 1 million.

6.2 Other types of Undertaking

Raison may also classify an Undertaking as an Assessed Professional Client if the Undertaking has:

1. a Controller;
2. a Holding Company;
3. a Subsidiary (whether direct or indirect); or
4. a joint venture partner, that meets the requirements in clause 6.1. to be classified as an Assessed Professional Client.

7. Client no longer meets the requirements to be a Professional Client

If Raison becomes aware that a Client no longer meets the requirements to be classified as a Professional Client, Raison must, as soon as possible, inform the Client that this is the case and, where appropriate, discuss with the Client the steps that Raison and the Client may take to address the situation, which may include Raison notifying the Client of its reclassification.

8. Reclassification of a Professional Client as a Retail Client

8.1 Obligation to notify Professional Client of right to be treated as a Retail Client If Raison provides Services to Retail Clients and Professional Clients, it must, when first establishing a relationship with a Person as a Professional Client, notify that Person in writing of:

1. that Person’s right to be classified as a Retail Client;
2. the higher level of protection available to Retail Clients; and
3. the period of time within which the Person may choose to be classified as a Retail Client.

8.2 If the Person does not choose to be classified as a Retail Client within the time specified by Raison, Raison may classify that Person as a Professional Client.

9. Professional Client that asks to be treated as a Retail Client

If a Professional Client makes a request to Raison to be treated as a Retail Client, Raison must classify it as a Retail Client.

10. Market Counterparties

10.1 Classification as a Market Counterparty Raison may classify a Person as a Market Counterparty, unless and to the extent that Person is given a different classification under COB 2 if that Person meets the requirements to be:

1. a Deemed Professional Client; or
2. an Assessed Professional Client and is the subsidiary of a Holding Company that is a Deemed Professional Client by virtue of being a Large Undertaking falling within requirements of clause 4.1.
3. provided that the arrangement meets the conditions in clause 10.2.

10.2 Requirement for confirmation by the Client In order for Raison to classify a Person as a Market Counterparty, Raison must ensure that:

1. the Person has been given prior written notification of its classification as a Market Counterparty; and
2. the Person has not requested to be classified other than as a Market Counterparty within the time specified in the notification.

11. Protection of Clients

11.1 The regulatory requirements of the AIFC Business Conduct Rules imply different levels of protection to Retail, Professional Clients and Market Counterparties, with the maximum level of protection provided to Retail customers. 11.2 Such protection and its mechanisms are described in the following sections of AIFC COB Rules:

• 3.3 Financial promotions
• 3.4 Unsolicited Real-Time Financial Promotions
• 4.2 Client agreement
• 4.4 Content of key information
• 5.2 Suitability assessment
• 5.3 Appropriateness assessment
• 5.6 Packaged products—additional disclosure 6.1 Best Execution
• 6.2 Client order handling
• 8.3 Client investment rules
• 10.5 Key information
• 15 Complaints handling and disputes resolution

12. License Restrictions

In accordance with licensing restrictions, Raison is not entitled to carry out transactions with the following financial products:

• Futures
• Contracts for Difference
• Options
• Rights to or interests in Investments
• Profit Sharing Investment Account
• Certificates
• Credit Facility
• Sukuk

Additionally, Raison cannot carry out transactions with Structured Financial Products for Retail Clients.