DESCRIPTION OF FINANCIAL INSTRUMENTS AND INVESTMENT SERVICES

Transcription

1 1. Information on the Investment Services Provider DESCRIPTION OF FINANCIAL INSTRUMENTS AND INVESTMENT SERVICES Information on JSC NORVIK BANKA Name: JSC NORVIK BANKA Legal address: 21 Ernesta Birznieka-Upisha street, Riga, Latvia, LV-1011 Telephone: (+371) , Fax: (+371) Webpage of the Bank: Bank registration data and licenses Unified registration number ; The Financial and Capital Market Commission granted the Bank the Credit Institution Licence No /210. Shareholders of the Bank over 80% - Grigorij Guselnikov (Russia) Supervising Authority Financial and Capital Market Commission, address: Kungu iela 1, Riga, the Republic of Latvia, LV Communication with Clients Languages. JSC NORVIK BANKA communicates with Clients in Latvian, Russian and English; the primary language of communication is Latvian. JSC NORVIK BANKA is not obliged to translate all documents regulating the operation of JSC NORVIK BANKA, the policies, procedures or announcements into other languages. JSC NORVIK BANKA may perform a translation upon the request of the Client, and the Client shall cover the translation expenses. Forms. Clients can choose the most convenient form of communication with JSC NORVIK BANKA personally at a branch of JSC NORVIK BANKA, by telephone, or in writing. The Client may use the account remote management system e-norvik after signing a separate contract. 2. Financial Instrument Portfolio of the Client The following types of financial instruments are offered by JSC NORVIK BANKA to its Clients for the purpose of forming a securities portfolio: stocks, bonds, investment funds, futures contracts, options, and CFD. JSC NORVIK BANKA offers following types of deals: buying and selling financial instruments, and REVERSE REPO and margin trading (using additional financing). The evaluation of the Client's financial instrument portfolio is performed based on actual market value. 3. Reports on Services Provided JSC NORVIK BANKA provides the Clients with regular reports on the services provided in accordance with the procedure, frequency and deadlines stipulated by the law of the Republic of Latvia. The Financial Instruments Market Law stipulates that the Client should be provided with the following information and reports: a confirmation of each deal on the day following the deal s execution, a securities portfolio on any date, a statement on deals for any given time period, other confirmations for financial instrument events (upon the request of the Client). The remote management system e-norvik allows Clients to check reports on services provided on a regular basis. 4. Description of Risks Associated with Financial Instruments With respect to the experience and knowledge of the Client, JSC NORVIK BANKA provides information on the characteristics of the financial instrument type and the risks associated with the respective financial instrument type, the execution of deals thereof, the procedure for settlement of accounts, and expenses Risks Associated with the Investment Any financial transaction is related to variety of risks that could affect the results of the financial transaction and, therefore, also the achievement the Client objectives. In order to achieve the planned results, before submitting each order on transactions with financial instruments JSC NORVIK BANKA, Client has to pay particular attention to all the risks and eventual losses associated with a certain financial instrument and transaction and shall assess their suitability for the achievement of its objectives. Therefore JSC NORVIK BANKA wants to familiarise Client with eventual risks and to warn him about the risks that may arise from transactions with financial instruments, and ask to take into account this information making a decision on the conclusion of an Agreement on Brokerage Services with JSC NORVIK BANKA as well as every time submitting order on transactions with financial instruments. State or political risk General market risk Price risk Currency risk Interest rate risk Liquidity risk Capital losses or restrictions to sell/buy currency due to events which influence the political and economic stability of a state or a region, or the further development of this state or region. This risk consists of a price risk, a currency risk, an interest rates risk and a liquidity risk. Losses arising from fluctuations in financial instrument prices. Losses arising from fluctuations in currency market prices. Losses arising from changes in market interest rates. Losses arising from insufficient liquidity of the market, i.e., problematic or impossible sales of the currency or financial instrument at the preferred time and for the preferred price. Page 1 of 9 Description of Financial Instruments and Investment Services

2 System risk Legal risk Information risk Credit risk Counterparty risk, or risk of other third party involved in the transaction Payments risk Other risks Losses arising from incapability to perform payments or transfers due to a malfunction of the payments centre or payments system. Losses and additional expenses caused by amendments to legislative enactments. Losses arising from lack of access to accurate and complete information on currency rates, prices of financial instruments and market trends. Potential losses in the event that the Client's debtor may not settle or is incapable of settling the liabilities undertaken towards the Client, if such liabilities derive from financial instrument deals. The possibility of incurring losses that occur if the party, which has entered into a financial transaction with Client through the mediation of JSC "NORVIK BANKA", or the party to which holding the Client financial instruments and cash assets (which to be used to secure Client transactions) have been transferred by JSC NORVIK BANKA, does not fulfil its obligations arising from the transaction / the relevant agreement. The risk undertaken by the Client in financial instrument deals which are not settled. The risk arising from interferences in the reporting systems or communication channels which results in the incorrect processing of the deal. Force majeure circumstances (natural disasters, military action, strikes, etc.), sanctions imposed by government or judicial institutions applied to the issuer or one of the counterparties, etc Risks Associated with Certain Deal Types Foreign financial markets Transactions in foreign financial markets are subject to risks which can differ from the risks associated with investment in Latvia. Risks can be higher in some cases. Potential profits or losses from transactions in foreign financial markets or from financial instrument deals nominated in foreign currencies may also be influenced by currency rate fluctuations. Trade platforms Trading of financial instruments through the use of trade platforms may substantially differ from trading in other systems. This is associated with additional risks including, but not limited to, the risk of losses due to interferences in the computer networks or other equipment, the risk of unauthorised access to the trade platform by third parties using the Client's authorisation data, and the risk of losses due to use of information which was acquired through the trade platform. Transactions outside of the regulated market Transactions outside of the regulated market (over-the-counter deals) are associated with relatively higher risks than deals performed in the regulated market, due to possibility of terminating trade with financial instruments outside of the regulated market, which results in problematic assessment and closing of opened positions. 5. Description of Financial Instruments and Deals Equities Equities are share capital securities. In principle, the owner of equities or shareholder is one of the co-owners of the company. If the company is profitable, a portion of the profit may be distributed to the shareholders in form of dividends. Equities entitle the owner, depending on the category of respective equities, to participate in the management of the company or grant the right of voting during the shareholders' meeting. A higher number of equities owned by the investor implies a larger proportion of owned company share capital and, correspondingly, share of distributed profits. The main risk faced by the investor when buying equities is the equities purchase price and the shift in the equities price in the future. In future, the equities price may increase or decline. The overall profitability of the equities investment equals the acquired dividends as well as the shift in the equities price (positive or negative). Equities price is influenced by several factors: company development prospects, forecasted profits, profits per share, etc. When investing in equities, investors often assess the general economic environment of the country, its development prospects, and potential demand for company goods or services. In addition, management composition, organisational structure, and the declared work productivity/efficiency of the company is taken into account. Market participants usually have different opinion about the prospects for the equities price of a company. Thus, some of them are shareholders, while some are equities buyers and sellers. If the majority of market participants have a common opinion about the equities price in the future, it results in more rapid changes in the equities price. The equities price is also influenced by trading turnover and liquidity. The higher the turnover and the liquidity, the lower the margin between the purchase and selling price. Equities trade is usually done through regulated markets or stock exchanges. Short selling brings additional risks. By opening short position in shares, the Client sells shares, which he don t owns at the moment of sale. The Client expects the share price to fall in the future and hopes to repurchase previously sold shares cheaper. Short position sooner or later has to be closed, i.e, shares are necessary to buy and bring back to the broker. If the share s price will rise, the Client will incur a loss equal to the difference between the price of a short sale and repurchase price. Since the shares are taken from a broker on credit, usually broker charges payment of interest on the value of the shares loan. In theory, the amount of loss on the short sale is not limited, in the case of an unlimited increase in the price of shares previously sold. Debt securities (bonds, collateralized obligations) Debt securities, e.g. bonds, are debt financial instruments which are characterised by the issuer's obligation to pay the owner certain returns in accordance with a fixed or variable (coupon) rate, and to receive from the issuer the full nominal value of the bond upon its maturity. The interest rate or coupon is usually paid to the owner of the bond at predefined intervals. There are bonds with no predefined interest rate payments. Such bonds are sold below their nominal value and are repurchased for full nominal value (bearer certificates or zero-coupon bonds). Bonds can be issued by state governments, banks, companies and other market participants. The most significant risks the investor should be aware of when purchasing bonds: the price paid for bonds, changes in the bonds value, and the possibility that the issuer will not repurchase all or a portion of the bonds. In the future, a bond s price may increase or decline. 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3 Bond price is influenced by market interest rates - as the rates increase, the bond price falls, and vice versa the fall of rates increases the bond price. The overall interest rate level is influenced by the monetary policy of central banks as well as the attitude of market participants towards interest rate changes. Collateralized obligations are debt securities which secure debt liabilities covered by mortgages or loans with state or municipal guarantees or other cover specified by the law. For the investor, collateralized obligations are associated with a lower risk of issuer not settling the liabilities, because the investor usually has the prerogative rights to sell the assets used for collateral to satisfy the claim of the investor against the issuer. Debt securities issued or guaranteed by the government are considered zero risk financial instruments (the possibility that the issuer will not settle the liabilities is very low). Investment funds Investment funds are basically an aggregate of assets from many investors with the purpose of gaining profit from the increase in investment value. Assets of the fund are invested and supervised by the Fund Manager. The investment fund manager invests in various equities, bonds, term deposits, and real estate in accordance with the fund prospectus. An investment certificate is a security which certifies the participation of the investor in the fund and the resultant rights. By buying an investment certificate, the investor becomes a shareholder of the fund and is entitled to claim a corresponding share of fund profits. The operational results of the investment fund depend on the shift in the value of the investment fund. The main risk faced by the investor when buying investment fund certificates is similar to that when investing in equities or bonds, i.e. the purchase price of certificates and the shift in the investment certificate value in the future. Due to the fact that the investment fund invests in the equities and bonds of a number of different companies, the investment risk is more balanced and diversified. Derived financial instruments (Futures and Options) Transactions with derived financial instruments are associated with high risk and may not be suitable for some investors. Derived financial instruments are financial instruments with a price or terms derived from the respective variable terms of other financial instruments or other tangible or intangible assets. Prior to performing a deal with derived financial instruments, the assessment of potential risks should be carried out, and the adequacy of the derived financial instruments should be evaluated with respect to previous experience, goals, financial situation and other conditions. Trade with derived financial instruments usually takes place using financial leverage, which can result in significant losses or profits compared to invested assets. This implies that relatively small changes in the market price may cause proportionally much more substantial changes in investment value. Some derived financial instruments, especially structured ones, are characterised by significant market price fluctuations and low liquidity, which increases the risk of suffering even higher losses. Sharp changes in the prices may cause the loss of all financial assets invested in the initial deposit for trade with said instruments, and financial losses may even exceed the amount of this deposit. Futures contracts (Futures) Futures contracts (Futures) are derived instruments which define the liability to purchase or sell assets specified in the contract at a given price on a given date in the future. Futures contracts can be exchange-traded and traded over-the-counter. Options Options are derived instruments where the seller of an option undertakes the liability and the buyer of an option acquires the right (but not an obligation) to buy (Call option) or to sell (Put option) assets agreed upon in the contract at an agreed price on any date between the signing of the contract and the maturity date (American option) or on the maturity date (European option). The buyer of an option pays a premium for the right acquired with the option. The amount of the paid premium depends on the fluctuation of assets (currency rate, interest rate, equities or equities indices prices, goods prices) included in the option, the duration of the option, the agreed option price (Strike Price), and other less important factors. The seller of an option undertakes financial risks to guarantee that the buyer can execute the right acquired with the option. CFD CFD (Contracts For Difference) are derived instruments certifying that a contract is signed on the difference between the opening and closing prices of various financial assets. CFD trade is oriented on speculative trade with future contracts on equities, indices, assets, etc. This type of trade is designed for speculative operations without actual purchases and registration of ownership rights. The high liquidity of CFD enables the conclusion of a deal for offered financial instruments at any time, which would sometimes be problematic using exchange contract trade. Structured securities are derived financial instruments in the form of securities where the owner is entitled to receive the investment results from the combination (portfolio) of the issuer's specified financial instruments, including derived or other tangible or intangible assets, based on the strategy approved by the issuer and/or other terms specified by the issuer. The market of structured securities is characterised by: low liquidity risk, and problems with price fixation for financial instruments or assets underlying structured securities in the event of sharp price fluctuations. If the structured security is sold prior to its maturity date, the investor risks getting a price substantially below the purchase price. Financial instruments and assets underlying structured securities may lose their value resulting in the fall of the securities value, while the use of a certain investment strategy and/or the use of derived financial instruments in such a strategy may result in a partial or complete loss of investment value. Index-based securities are (a) derived financial instruments in the form of securities which entitle the owner to returns from changes in certain financial or other indices (calculated in accordance with the methodology approved by the issuer); (b) debt financial instruments in the form of debt securities which stipulate that interest (coupons) paid by the issuer are pegged to returns from changes in certain financial or other indices (calculated in accordance with the methodology approved by the issuer). Index-based securities are subject to the risk of value fluctuations causing negative effects on indices which are associated with the security or the interest return from the debt security. In addition, subject to the provisions and methodology used in the issuer's calculations, even the slightest changes in the index price may cause a significant shift in the price of index-based securities resulting in significant losses to the invested assets. REPO/REVERSE REPO deals REPO deal is a contract on the sale of a security at an agreed price on condition that these or similar securities shall be repurchased at the agreed price on the maturity date. REVERSE REPO deal - a contract on the purchase of a security at an agreed price on condition that these or similar securities shall be resold at the agreed price on the maturity date. Both deals prescribe that ownership rights to securities are transferred to the buyer. The repurchase price of securities is calculated based on the agreed interest rate. The use of additional financing significantly increases potential investment profits, but also increases the investment-related risks. The use of additional financing significantly increases the range of value fluctuations; there is a risk of financial losses exceeding the investment volume. Margin deal Margin deals are deals where financial market instruments (e.g., margin trading with currency contracts - Forex or margin credit with FI collateral or REPO deal) can be purchased in credit (cash assets are lent by the bank). Margin deals employ the use of leverage. This denotes that only a portion of committed investment (initial security deposit) is paid, resulting in increased potential profits or losses. If the financial instrument is purchased and sold on the same day, the Client is not charged interest on the cash loan. If the Client purchases a financial instrument and does not wish to sell it on the same day, the Client shall pay to JSC NORVIK BANKA the interest for the used Page 3 of 10 Description of Financial Instruments and Investment Services

4 cash assets at previously agreed rates. Other risks depend on the type of financial instruments purchased by the investor. Margin deals are associated with higher risks for the investor and even the slightest changes in the price of financial instrument would have a proportional influence on the invested assets. Prior to adopting any investment decisions, the investor must consider the risks of marginal trade very carefully. 6. Trading venues and intermediaries list List of Order execution venues in directly or indirectly regulated markets Austria Vienna Stock Exchange Belgium NYSE Euronext Brussels Stock Exchange Denmark NASDAQ OMX Copenhagen Finland NASDAQ OMX Helsinki France NYSE Euronext Paris Stock Exchang Germany Frankfurt Stock Exchange (Xetra trading platform) Italy Borsa Italiana Netherlands NYSE Euronext Amsterdam Stock Exchange Norway Oslo Stock Exchange Portugal NYSE Euronext Lisbon Stock Exchange Switzerland Virt-X Switzerland SWX Swiss Exchange Sweden NASDAQ OMX Stockholm UK London Stock Exchange Czech Republic Prague Stock Exchange Greece Athens Stock Exchange Hungary Budapest Stock Exchange Poland Warsaw Stock Exchange Spain Madrid Stock Exchange Turkey Istanbul Stock Exchange Latvia NASDAQ OMX Riga Lithuania NASDAQ OMX Vilnius Estonia NASDAQ OMX Tallinn USA American Stock Exchange USA NASDAQ USA New York Stock Exchange Canada Toronto Stock Exchange Russia Moscow Exchange Australia Australian Securities Exchange Hong Kong Hong Kong Stock Exchange Japan Tokyo Stock Exchange Counterparties Tradition Limited (UK) RIA Capital Markets Ltd (UK) Carl Kliem S.A. Univer Capital (Russia) NKB Investments Limited Atonline Limited Renaissance Securities (Cyprus) Ltd VTB Capital plc Ronin Europe Limited Deutsche Bank AG London Branch Credit Suisse Securities (Europe) Ltd Otkritie Securities Limited Commerzbank AG London Branch UBS Limited The Royal Bank of Scotland plc JPMorgan Chase Bank NA London Branch Barclays Capital plc Goldman Sachs International ICAP Management Services Ltd Merril Lynch International Exotix Limited Jefferies International Ltd Mitsubishi UFJ Trust International Limited Nomura International plc TD Securities (The Toronto-Dominion Bank) Morgan Stanley & Co International plc Adamant Capital Partners Depositaries Latvian Central Depository (LCD) AS KIT Finance Europe Cyprus Branch KBC Securities NV/SA State Street Bank GmbH Raiffeisen Bank International AG Cor Clearing LLC Interactive Brokers LLC Page 4 of 10 Description of Financial Instruments and Investment Services Singapore Stock Exchange of Singapore South Africa Johannesburg Stock Exchange Abu Dhabi Securities Exchange New Zealand Stock Exchange EDX London EUREX Deutschland EUREX Zurich IDEM (Italian Derivatives Equity Market) NASDAQ OMX Copenhagen Exchange NASDAQ OMX Helsinki Exchange New York Board of Trade (NYBOT) Euronext Derivatives Market Tokyo Stock Exchange Osaka Securities Exchange Chicago Board of Trade (CBOT) Chicago Mercantile Exchange (CME) Chicago Board Options Exchange (CBOE) Hong Kong Exchanges and Clearing Ltd. Korea Exchange Philadelphia Stock Exchange Madrid Exchange for Financial Futures (MEFF) Montreal Exchange Singapore Exchange Ltd. Tokyo Financial Exchange Tokyo Commodity Exchange (TOCOM) American Stock Exchange Taiwan Futures Exchange London Metal Exchange (LME) Euronext.liffe European Climate Exchange Intercontinental Exchange (ICE) New York Mercantile Exchange (NYMEX), (incld. COMEX Division) NYSE Arca Kepler Capital Markets SA Raiffeisen Bank International AG ING Bank NV AS DNB Banka Credit Agricole CIB KBL European Private Bankers S.A. BCP Securities LLC Pinnacle Capital Markets LLC OJSC "Alfa-Bank" Banca IMI S.P.A. Uralsib Securities Limited London ZAO Finans-Invest BANKA Zarattini&CO SA Promsvyazbank, Moscow Region Broker Company LLC Brokercreditservice (Cyprus) Ltd Sigma Trade Limited (London) Dragon Capital Limited GFI Securities Ltd (UK) Interactive Brokers LLC AS KIT Finance Europe Cyprus Branch KBC Securities NV/SA YAR Bank Ltd. (Russia) Pareto Securities AS (Norway) Oppenheimer Europe, Ltd (UK) MeritKapital Limited (Cyprus) Veles International Limited (Cyprus) Trasta Komercbanka

5 7. Brokerage service fees and charges 7.1. Financial Instrument Account maintenance Service Fee 1. Investment and financial instrument account opening JSC NORVIK BANKA 2. Financial instruments transfer from other accounts to JSC NORVIK BANKA for private persons 3. Financial instruments transfer from other accounts to JSC NORVIK BANKA for legal entities (*) 4. Financial instruments transfer from JSC NORVIK BANKA according to actual costs 0.2% of market price on the date of transfer 0,5% of market value, min. 40 EUR 5. Financial instruments transfer within JSC NORVIK BANKA 6. Financial instruments account maintenance of monthly balance (foreign financial instruments) 7. Financial instruments account maintenance of monthly balance (Latvian financial instruments) 0,02%, min. 1 EUR Latvian shares 2 EUR + 0,008% Latvian government bonds 2 EUR + 0,002% other Latvian issuer bonds 2 EUR + 0,005% JSC NORVIK BANKA funds units JSC NORVIK BANKA issued bonds 8. Account statement e-norvik 9. Deal confirmation e-norvik 10. Customized reports upon request 11. Blocking of securities for shareholders meeting (foreign issuers) 12. Participation in corporate actions (conversion of bonds/rights for stock and so on) 13. Transaction maintenance on NASDAQ OMX Riga: Deregistration Financial instruments transfer from JSC NORVIK BANKA DVP support for direct deals Deals with shares in the primary register 14. Reduction of tax payments in accordance with the intergovernmental treaties on double tax avoidance 15 EUR (per document) 10 EUR 10 EUR 4 EUR 15 EUR 6 EUR 17 EUR 30 EUR 15. Documents delivery by post 16. Account closing according to actual costs * Third parties commissions are paid separately 7.2. Financial operation maintenance Minimum investment amount USD Classic Brokerage (by phone) Equities Exchange/Country Fee Minimum fee Moscow Exchange/Russia * 0.20% of deal amount 750 RUB RTS/Russia * 0.30% of deal amount 50 USD LSE/London ** 0.30% of deal amount 20 GBP LSE IOB/London 0.30% of deal amount 35 USD Xetra/Germany ** 0.30% of deal amount 25 EUR Borsa Italiana/Milan ** 0.30% of deal amount 25 EUR Euronext/France ** 0.30% of deal amount 25 EUR SIX/Switzerland 0.30% of deal amoun 30 CHF Euronext/Netherlands 0.30% of deal amount 25 EUR Warsaw/Poland 0.40% of deal amount 50 EUR Nasdaq OMX/Finland 0.30% of deal amount 25 EUR Nasdaq OMX/Sweden 0.30% of deal amount 25 EUR Nasdaq OMX/Norway 0.30% of deal amount 200 NOK Nasdaq OMX/Denmark 0.30% of deal amount 25 EUR Nasdaq OMX/Belgium ** 0.30% of deal amount 25 EUR Nasdaq OMX Baltic (Riga/Tallinn/Vilnius) 0.35% of deal amount 5,70 EUR / 10 LTL Tiešais darījums Nasdaq OMX Riga 0.20% of deal amount 5,70 EUR ASX/Australia 0.35% of deal amount 45 AUD Page 5 of 10 Description of Financial Instruments and Investment Services

6 Toronto/Canada 0.40% of deal amount 40 CAD NYSE, Nasdaq/USA *** USD per share 35 USD OTCBB/USA Short-selling upon request upon request * Indicated commissions do not include Stock Exchange and other fees (commissions) occurred when executing Clients order; these commissions are paid by the Client separately. ** Indicated commissions do not include European FTT (financial transaction tax) 0.2% from transaction value and/or UK ST (Stamp duty) 0.5% from transaction value. These taxes apply only on purchase of shares. *** Third party commissions, as well as the French FTT on ADR security purchases (0.2% from purchase value), are paid by the client separately. Bonds Foreign sovereign bonds Foreign corporate bonds Service Fee Minimum fee 0,08% of deal amount 0,08% of deal amount 40 USD/35 EUR/40 CHF/25 GBP 40 USD/35 EUR/40 CHF/25 GBP Russian Eurobonds 0,08% of deal amount 40 USD Russian corporate bonds, denominated in rubles 0,20% of deal amount 1400 RUB Russian Federal Bonds - OFZ * 0,20% of deal amount 1400 RUB Latvian bonds 0,10% of deal amount 10 EUR * Indicated commissions do not include Exchange and other fees (commissions) occurred when executing Clients order; these commissions are paid by the Client separately Futures Service Futures on USA Exchanges (CME/CBOT/NYMEX/ICE) FORTS Futures * Fee (per side) 15 USD/15 EUR/15 CHF/10 GBP per contract 7 RUB per contract * Indicated commissions do not include Exchange and other fees (commissions) occurred when executing Clients order; these commissions are paid by the Client separately Options Service Fee (per side) Minimum fee Options on USA Stock Exchanges 5 USD per option 30 USD Options on Futures 15 USD per option 30 USD FORTS Options * 7 RUB per option * Indicated commissions do not include Exchange and other fees (commissions) occurred when executing Clients order; these commissions are paid by the Client separately Internet-trading (Electronic trading systems) NORVIK TWS trading platform (USA and European markets) USA (stocks+etfs) * Country Fee Min. fee per trade turnover up to shares/month 0.02 USD per share/etf 25 USD turnover from to shares/month ** USD per share/etf 25 USD turnover from to shares/month ** 0.01 USD per share/etf 25 USD turnover above shares/month ** USD per share/etf 25 USD Canada (equities) * turnover up to shares/month CAD per share 25 CAD turnover from to shares/month ** 0.02 CAD per share 25 CAD turnover from to shares/month ** CAD per share 25 CAD turnover above shares/month ** 0.01 CAD per share 25 CAD Europe (stocks) * : Germany/France/Netherlands/Belgium/Italy 0.25% of trade value 20 EUR UK (LSE, IOB) 0.25% of trade value 15 GBP/25 USD Switzerland 0.25% of trade value 25 CHF Norway 0.25% of trade value 150 NOK Sweden 0.25% of trade value 150 SEK USA (futures/options) Futures turnover up to contracts/month *** 12.5 USD per contract - turnover from 1000 to contracts/month *** 10.0 USD per contract - turnover above contracts/month *** 7.5 USD per contract - Options on futures 12.5 USD per contract - Options on equities **** 2.5 USD per contract 20 USD Page 6 of 10 Description of Financial Instruments and Investment Services

7 * Indicated commissions do not include Stock Exchange and other fees (commissions) occurred when executing clients order; these commissions are paid by the client separately. European FTT (Financial Transactions Tax) - 0.2% from transaction value and/or UK ST (Stamp duty) 0.5% from transaction value also paid by client separately. These taxes apply only on purchase of shares/adrs ** Volume tiered commissions are applied based on monthly cumulative trade volume. If for example, you execute shares in a month, fees would be: 0.02 USD/share for shares; USD/share - for shares and 0.01 USD/share - for last shares *** Volume tiered commissions are applied based on monthly cumulative trade volume. If for example, you execute futures in a month, fees would be: 12.5 USD/contract for 1000 futures; 10 USD/contract for next 9000 futures and 7.5 USD/contract for last 5000 futures **** Additional fee is charged for option order cancellation and modification USD/contract Monthly fee for the platform * if no deals during the month 10 USD for clients who generate at least USD 100 commissions per month for clients with deposits over 100'000 USD * first 3 months Market data NORVIK TWS Private individuals Legal entities + professionals US Securities & Commodities Non-Professional Bundle * 10 USD n/a AMEX + NASDAQ Level I + NYSE level I 10 USD n/a AMEX 10 USD 24 USD NASDAQ Level I 10 USD 23 USD NYSE Level I 10 USD 50 USD ArcaBook Equities 10 USD 40 USD ArcaBook Options 10 USD 60 USD CBOE Futures Exchange Level I 3 USD 7,50 USD NASDAQ TotalView 15 USD 76 USD NYSE Open Book Real Time 25 USD 60 USD OTC Markets Level I (Previously listed as PINK) 3 USD 24 USD Montreal Exchange Level I 6 CAD Montreal Exchange Level II 9 CAD Toronto Stock Exchange Level I Professional n/a 67 CAD Other exchanges (USA+Europe) upon request upon request * Free for Clients who generate over 150 USD per month. US Securities and Commodities Bundle Non-professional Level 1 includes market data for stock, and futures products on: AMEX, CBOT, CME (Globex), NYSE, and NASDAQ. Funds withdrawal from NORVIK TWS platform account Currency USD 10 CAD 12 CHF 11 EUR 8 GBP 7 Other CCY Fee upon request NORVIK INFRONT trading platform (European markets) Country Fee (% of trade value) Minimum fee LSE/London ** 0,20% 15 GBP LSE IOB/London 0,20% 25 USD Xetra/Germany ** 0,20% 20 EUR Borsa Italiana/Milan 0,20% 20 EUR Euronext/France ** 0,20% 20 EUR Euronext/Netherlands 0,20% 20 EUR Warsaw/Poland 0,30% 30 EUR Nasdaq OMX/Finland 0,20% 20 EUR Nasdaq OMX/Sweden 0,20% 20 EUR Nasdaq OMX/Denmark 0,20% 20 EUR Nasdaq OMX/Belgium ** 0,20% 20 EUR Toronto/Canada 0,30% 35 CAD ** indicated commissions do not include European FTT (financial transaction tax) 0.2% from transaction value and/or UK ST (Stamp duty) 0.5% from transaction value. These taxes apply only on purchase of shares. Page 7 of 10 Description of Financial Instruments and Investment Services

8 Market data NORVIK INFRONT Level 1 (EUR) London (IOB) 30,00 45,00 Deutche: Xetra 17,00 27,00 Deutche: Xetra/Frankfurt 42,00 61,00 Borsa Italiana 28,00 - Toronto 35,00 42,00 Other exchanges upon request Level 2 (EUR) Monthly fee for the platform NORVIK INFRONT if over 10 deals per month Funds withdrawal from NORVIK INFRONT platform account EUR/CAD USD Funds transfer to NORVIK INFRONT platform 75 EUR 30 USD NORVIK QUIK trading platform (Russian market) Exchange/Instrument Fee Minimum fee Moscow Exchange (equities/bonds/ofz) * - monthly turnover up to RUB 0,15% of trade value - - monthly turnover from up to RUB 0,12% of trade value - - monthly turnover over RUB 0,08% of trade value - FORTS (futures/options) * 5 RUB per contract - * Indicated commissions do not include Stock Exchange and other fees (commissions) occurred when executing. Monthly fee for the platform MICEX and FORTS - over 5 deals per month MICEX and FORTS - no deals during the month US futures (USD) Funds withdrawal from NORVIK QUIK platform account RUB USD Funds transfer to NORVIK QUIK platform account 300 RUB 50 USD 300 RUB 25 USD Operations in the Forex market - currency margin trading Service type Non-cash currency purchases and sales in margin accounts (Section 9 of GPT) Operations with currency contracts in TS NORVIK MetaTrader Commission No commission on deals. Deals are performed for the market prices quoted by the Bank (*). The place of order performance is JSC NORVIK BANKA. * Market prices quoted by JSC NORVIK BANKA prices prevailing in the market at the specified time which are available to JSC NORVIK BANKA for performing deals with counterparties on a limited amount of certain financial instruments. No commission on deals. Deals are performed for the market prices quoted by JSC NORVIK BANKA (*). The place of order performance is JSC NORVIK BANKA. * Market prices quoted by JSC NORVIK BANKA prices prevailing in the market at the specified time which are available to the Bank for performing deals with counterparties on a limited amount of certain financial instruments. Minimum commission No No 7.3. Procedure for withholding personal income tax When dividends on equities of issuers, registered in the Republic of Latvia are disbursed to the Clients (natural persons residents or nonresidents of Republic of Latvia), and when dividends on equities of issuers registered outside the Republic of Latvia are disbursed to the Clients (natural persons residents of Republic of Latvia), JSC NORVIK BANKA shall automatically withhold the 10% income tax and transfer it to the state budget of the Republic of Latvia. Income tax amounting to 15% of the revenues for selling capital assets (bonds of other issuers, portions of funds and other securities) within the accounting period shall be calculated and transferred to the state budget by the Client. For full information on the amendments to the Law on Personal Income Tax, please visit the Internet site or other public resources. 8. Information on the Safe Deposit of the Client's Financial Instruments and Cash Assets Participation in the Deposit Guarantee System JSC NORVIK BANKA is a participant in the Deposit Guarantee System of the Republic of Latvia. Regardless of the deposit commitment date, each Client is guaranteed a compensation in the amount of deposited funds not exceeding 100,000 EUR on the date the deposit becomes inaccessible. If the depositor has several deposits, all deposits are aggregated and considered as a single guaranteed deposit. Page 8 of 10 Description of Financial Instruments and Investment Services

9 Inaccessibility of deposits comes into effect on the day any of the following conditions apply: the court has ruled that the bank is insolvent; the Financial and Capital Market Commission has annulled the bank's licence; or other cases where the Financial and Capital Market Commission has established that the bank is incapable of paying the guaranteed deposit and a decision on the inaccessibility of deposits is adopted. If the Deposit Guarantee Fund lacks the funds necessary to pay the guaranteed compensations, the latter is paid from the state budget. Participation in the investor Protection System JSC NORVIK BANKA is a participant in the Investor Protection System of the Republic of Latvia. The Client may receive compensation for irretrievably lost financial instruments or for losses caused by the non-fulfilment of investor services provided that it occurred when JSC NORVIK BANKA was incapable of fully fulfilling the contractual obligations towards the Client due to causes directly related to the Bank's financial situation, unless such non-fulfilment of investment services occurred during the normal operation of JSC NORVIK BANKA. The compensation is calculated in EUR using the currency rates set by the European Central Bank where appropriate. The compensation amounts to 90% of the value of irretrievably lost financial instruments or the losses caused by the non-fulfilment of investment services, but shall not exceed 20,000 EUR. Investor protection does not cover cases where the Clients have incurred losses due to fluctuations of financial instrument prices or if the financial instruments have become non-liquid. Holding of financial instruments Providing investment services or ancillary investment services JSC NORVIK BANKA can ensure the holding of Client financial instruments and cash assets (to be used to secure Client transactions) and JSC NORVIK BANKA may involve registered and controlled (also abroad) third parties (intermediary companies) entering into an agreement with them about the holding of financial instruments and cash assets. The Client financial instruments and cash assets shall be held by an intermediary company at a nominal account opened in the name of JSC NORVIK BANKA (hereinafter - nominal account) in accordance with the rules and regulations applicable to activity of an intermediary company with an indication of the belonging of the financial instruments and cash assets to Clients of JSC NORVIK BANKA. Financial instruments and cash assets belonging to several Clients of JSC NORVIK BANKA can be held at the appropriate nominal account, and so there is a risk that the Client financial instruments and cash assets may be used for the transaction of another client, and there is the risk of full or partial loss of these financial instruments and monetary assets; Client confirms that he recognises such risk and agrees to it. And JSC NORVIK BANKA has the right, in the cases and order set by rules and regulations of the Republic of Latvia, to keep the financial instruments and cash assets belonging to Client with registered abroad and controlled intermediary companies also in those cases when the holding of financial instruments and cash assets at a nominal account to the benefit of third parties is not regulated in that country. Client acknowledges and assumes the risks related to the circumstances specified in the previous sentence, namely, that in this case, the financial instruments / cash assets belonging to Clients shall be held together with the financial instruments / cash assets owned by JSC NORVIK BANKA, due to which complete identification of the Client property rights to the financial instruments / cash assets is impossible as a result of application of rules and regulations of a foreign country. However, JSC NORVIK BANKA always keeps a record of the Client financial instruments and cash assets being in its holding, and ensures that: it is possible at any time to separate the financial instruments and cash assets belonging to one Client from the financial instruments and cash assets belonging to another Client and the financial instruments and cash assets belonging to JSC NORVIK BANKA, records are regularly reconciled with the records of these financial instruments and cash assets that are kept by the intermediary company in which JSC NORVIK BANKA holds Client s financial instruments and cash assets. JSC NORVIK BANKA warns Clients and asks to take into account when making a decision on the conclusion of a Agreement on brokerage services with JSC NORVIK BANKA as well as every time submitting order for transactions with financial instruments, that intermediary companies may have the right to burden the financial instruments and cash assets belonging to JSC NORVIK BANKA Clients and held by them, and the right to clearing of the financial instruments and cash assets belonging to JSC NORVIK BANKA Clients and held by them, as well as that the holding of financial instruments and cash assets by intermediary companies, due to circumstances beyond control of JSC NORVIK BANKA, may create a risk for Clients that the financial instruments / cash assets can be partially or completely unavailable for a shorter or longer period, or completely lost due to circumstances beyond control of JSC NORVIK BANKA.These risks, in addition to that specified herein, are related to the fact that: insolvency / restriction of activities / default (for example, inadequate recording of financial instruments and cash assets, negligence and mismanagement, fraud) of an intermediary company may occur, activities of the intermediary company can abide by rules and regulations of another state, which may differ from the rules and regulations of the Republic of Latvia and can be applied or interpreted in a different way, as a result of which Client s right to Client s financial instruments and cash assets may differ from the rights set by the rules and regulations of the Republic of Latvia. Despite the fact that JSC NORVIK BANKA evaluates and supervises intermediary companies, there is always the risk that they may act dishonestly or illegally. Taking into account that rules and regulations and market practice of the country of registration / activity of the intermediary company can be applied to the financial instruments and cash assets held by foreign intermediary companies, and rights arising from them as well as to activities / omission and liability of the foreign intermediary company, which may differ significantly from the rules and regulations and market practice of the Republic of Latvia, which are applicable to financial instruments / cash assets and related rights, JSC NORVIK BANKA shall not be held liable for any losses or expenses of Clients that may arise in connection with: activity / omission (e.g., inadequate recording of financial instruments and cash assets, negligence and mismanagement, fraud) of an intermediary company, except when Client losses result from gross negligence or malicious intent of JSC NORVIK BANKA, rules regulating activities of the intermediary company or market practice of a foreign country. In case of insolvency / business interruption / default of an intermediary company, JSC NORVIK BANKA shall not be held responsible for any loss of Clients that could result from the application of insolvency regulations and other relevant rules of relevant state. In addition to the aforesaid, JSC NORVIK BANKA also warns Clients and asks to take into account when making a decision on the conclusion of Agreement on Brokerage Services with JSC NORVIK BANKA as well as every time submitting order on transactions with financial instruments that, executing Client JSC NORVIK BANKA is authorised, and by signing mentioned Agreement with JSC NORVIK BANKA and submitting every order the Client grants to JSC NORVIK BANKA such rights, to use financial instruments belonging to Client in the transactions effected by JSC "NORVIK BANKA" or intermediary companies for their own account or for the account of another client of JSC "NORVIK BANKA" or intermediary companies, incl. financing transactions with securities, till the moment when Client complies with his obligations under the order (condition of return), and Client certifies that he understands that in this case the financial instruments can be fully or partially inaccessible/lost, and Client agrees that in such cases it will not be possible to set special conditions for such transactions in the order for JSC NORVIK BANKA ; the general provisions set forth in the Agreement on Brokerage Services of JS JSC NORVIK BANKA in respect of duties and responsibilities of JSC NORVIK BANKA to Client executing of orders shall apply in respect of actions described in this paragraph. 9. Description of the Policy for Prevention of Conflicts of Interest in Provision of Investment Services and Associated Investment Services According to Directive 2004/39/EC of the European Parliament and of the Council and the law of the Republic of Latvia, JSC NORVIK BANKA, when providing investment services and associated investment services, shall inform the Client on the Policy for Prevention of Conflict of Interests in provision of investment services by AS NORVIK BANKA. The conflict of interests is a situation where two opposing interests, including personal interests and professional interests, collide or a situation where two opposing professional interests collide. JSC NORVIK BANKA group consists of several companies with numerous Clients, and the Clients have access to a wide range of financial services. This may cause conflict of interests. Page 9 of 10 Description of Financial Instruments and Investment Services

10 A conflict of interests may arise, for example, in the following situations: 1. When JSC NORVIK BANKA is executing the Client's instructions and at the same time JSC NORVIK BANKA is conducting transactions for its own account, 2. When the Bank is conducting investment research, 3. When the Bank is providing consultations on investment services and associated investment services, 4. When the Bank is providing portfolio management services, 5. When the Bank is offering financial instruments to the Client: which have been issued by JSC NORVIK BANKA on its own and regarding which JSC NORVIK BANKA has provided an investment recommendation or other recommendation or research; regarding which JSC NORVIK BANKA has concluded an agreement for distribution and offering; regarding which JSC NORVIK BANKA has conducted, organized, or provided assistance to a third person to conduct an issue or placement of financial instruments, including non-public placement. JSC NORVIK BANKA has performed a careful analysis on possible causes for conflict of interests and has developed the Policy for Prevention of Conflict of Interests, as well as administrative measures and procedures which enable to efficiently identify or minimise the possibilities for the arising of such conflicts of interests. Employees of JSC NORVIK BANKA, when performing their work duties, are subject to very strict code of conduct and provide services to the Clients with due diligence. JSC NORVIK BANKA would like Clients to pay attention to the fact that JSC NORVIK BANKA, when providing recommendations or concluding a deal with the Client or performing Client's order, may: Conclude a deal with the Client (through purchase or sales of a financial instrument to the Client) as an opposing party and thus gain profits or incur losses; Execute the Client's instructions against the instructions of other Client for whom JSC NORVIK BANKA acts on behalf (an instruction to purchase against an instruction to sell, etc.); JSC NORVIK BANKA or persons associated with JSC NORVIK BANKA may have positions or financial instrument options regarding which JSC NORVIK BANKA has provided an investment recommendation or research, and, regardless of the recommendation, JSC NORVIK BANKA may buy or sell these financial instruments; AS NORVIK BANKA may suggest that the Client buys or sells a financial instrument in which JSC NORVIK BANKA has either a short or long position. JSC NORVIK BANKA may receive commission from third parties for financial instruments offered and/or sold to the Client. To ensure a fair treatment to all Clients and provision of quality services, JSC NORVIK BANKA and the employees of JSC NORVIK BANKA shall always act in the best interests of the Client. * * * Page 10 of 10 Description of Financial Instruments and Investment Services