Home » Protection of clients’ assets Protection of clients’ assets Investimental applies and complies with the provisions of ASF Regulation no. 10/04/2018 regarding the safeguarding of clients’ financial instruments and funds, product governance obligations, and the rules applicable to the granting or receipt of fees, commissions, or other types of monetary or non-monetary benefits, as well as with those of ASF Regulation no. 5/2019, regulating certain aspects related to the provision of investment services and activities in accordance with Law no. 126/2018 on financial instruments markets. Clients’ financial instruments that are traded on the Romanian market are held by Investimental in omnibus accounts opened in the name of Investimental in Section 2 of the Central Depository, except where the client uses the services of a custodian agent. Clients’ financial instruments are held at the Central Depository in separate sections from Investimental’s own financial instruments. Clients’ financial instruments traded on the capital markets of Europe and United States of America, together with the cash funds required for settlement of transactions or resulting from trading, are held in a global account opened in the name of Investimental and on behalf of its clients with the Foreign Intermediary, in compliance with the obligations regarding the segregation of Investimental clients’ assets from Investimental’s own assets and those of the Foreign Intermediary. To facilitate trading on the foreign markets, Investimental has entered into partnerships with Foreign Intermediaries, as follows: KBC Bank N.V., authorised, regulated and supervised by the National Bank of Belgium and the Belgian Financial Supervisory Authority, and which provides financial investment services through its KBC Securities Services division – for trading on the markets in Europe Drivewealth LLC, an authorized intermediary in the United States of America, FINRA / SEC registration no. CRD#: 165429 / SEC#: 8-69161, and a participant in the US central depository system – for trading on the markets in the United States of America In the case of trading on the European markets, KBC Bank N.V. has notified Investimental that it is classified as an eligible counterparty, so that the investor compensation scheme in which the Foreign Intermediary is a participant is not applicable to Investimental‘s clients. Drivewealth LLC is a member of an investor compensation scheme – the Securities Investor Protection Corporation (SIPC), established under the Securities Investor Protection Act, a compensation scheme applicable to Investimental in its capacity as a client of Drivewealth LLC. The main objective of SIPC is to oversee the liquidation of member firms when they face bankruptcy, financial difficulties, or when clients’ assets are affected as a result of fraud. The relationship between Investimental and Drivewealth LLC is conducted through the global account, without the external partner having a direct relationship with Investimental’s clients, so that the SIPC compensation scheme is applicable to Investimental, in its capacity as a client of Drivewealth LLC. Currently, the compensation limit per client is USD 500,000, including a limit of USD 250,000 for cash. Drivewealth LLC is subject to specific regulations concerning the protection of client assets and financial soundness, including Exchange Act Rule 15c3-3 (Customer Protection Rule), which requires firms that safeguard client assets to ensure segregation of such assets from their own assets and those of other clients, and Exchange Act Rule 15c3-1 (Net Capital Rule), pursuant to which investment firms must at all times maintain sufficient net capital to protect clients in the event that the firm becomes insolvent. Investimental transfers to Drivewealth LLC only the cash amounts necessary for transactions settlement for financial instruments traded on the US markets, on a net basis. In the extreme situation where Drivewealth LLC would be unable to return clients’ assets, Investimental will address SIPC to request compensation for the holdings related to the global account opened by Investimental with the external partner on behalf of its clients, in accordance with the eligibility criteria and compensation limits applicable at that time, and will also address the relevant US authorities in order to initiate the recovery process for any amounts / assets owed by the foreign intermediary. SIPC protection, within the limits applicable at that time, together with any amounts recovered promptly, would supplement Investimental’s own funds, which Investimental is required to maintain in relation to the assets it holds on behalf of its clients. Thus, after the initial steps and taking into account the legally established timeframes in this respect, Investimental will initiate the procedures for compensating clients whose assets could not be returned. At Investimental’s level, the financial instruments and cash funds held by clients, both on the local market and on the US markets, are recorded in individual accounts opened in the name of each client, separately from the company’s own financial instruments and cash funds, for which Investimental performs daily reconciliations between its internal IT system records and the records of the third parties where clients’ assets are held. The safety of cash funds held in the name and on behalf of clients is ensured by the financial strength and reputation of the banking institutions with which Investimental cooperates under contractual agreements to this effect. Investimental is legally required to ensure own funds requirements in relation to the assets it holds on behalf of its clients (both for cash funds held and for financial instruments held in custody). If Investimental, through the means available to it, including those resulting from the steps presented above, would be unable to satisfy the compensation claims of the affected clients and would be required to resort to insolvency or bankruptcy proceedings, then eligible Investimental clients will be able to rely on the protection offered by the Investor Compensation Fund (ICF), the assets of eligible Investimental clients held with the foreign intermediary forming part of the compensable investments in accordance with ICF Procedure no. 1/2022, based on which the annual and special contributions paid by Investimental to the ICF are determined.
