Investor Compensation Fund

INVESTOR COMPENSATION FUND

We are a member of the Investor Compensation Fund for clients of Cypriot Investment Firms (CIFs) and other Investment Firms (IFs) which are not credit institutions (the “Fund”). The object of the Fund is to secure the claims of the clients of regulated Investment Firms against the members of the Fund through the payment of compensation, in cases where the Investment Firm is unable, due to its financial circumstances, and when no realistic prospect of improvement of such circumstances in the near future seems possible: (a) to return to its clients funds owed to them or funds which belong to them but are, directly or indirectly, held by the Investment Firm in the context of providing investment services to the said clients, or (b) to hand over to such clients the financial instruments which belong to them and by which the Investment Firm holds, manages or keeps on their account, including the case where the Investment Firm is responsible for the administrative management of the said financial instruments.

The payment of compensation by the Fund to the clients of its members is subject to the existence of a well-founded claim by such client(s) against the Investment Firm, arising from the investment services provided by the Investment Firm to the client in question. The protection scheme is only available to certain types of claimants and claims. Payments to eligible claimants under the Scheme will vary depending on the type of protected claim (e.g. deposits or investments) the claimants hold with respect to the relevant institution.

The Fund initiates the compensation payment procedure when at least one of the following preconditions is fulfilled:

(a) the Cyprus Securities and Exchange Commission has determined that the Investor Compensation Fund member is unable to meet such of its duties as arise from its clients’ claims in connection with the covered investment services or the ancillary services it has provided, as long as such inability is directly related to its financial circumstances in respect of which no realistic prospect of improvement in the near future seems foreseeable, or (b) the Court has, on reasonable grounds directly related to the financial circumstances of the Investment Firm, issued a ruling which has the effect of suspending the Investors’ ability to lodge claims against the Investment Firm.

Upon issuance of a decision by the Court or the Cyprus Securities and Exchange Commission, on the commencement of the compensation payment process, the Fund publishes in at least three newspapers of national coverage, an invitation to the clients of the Investment Firm to make their claims against the Investment Firm, designating the procedure for the submission of the relevant applications, the deadline for their submission and their content.

To ascertain the claims of a claimant against the Investment Firm, as well as any counterclaims of the Investment Firm against the claimant, the books kept and the particulars issued by the Investment Firm as well as the supporting evidence produced by the claimant are taken into consideration. The amount of the compensation payable to each client is calculated

in accordance with the legal and contractual terms governing the relation of the client with the Investment Firm, subject to the set of rules applied for the calculation of the claims between the client and the Investment Firm. The valuation of the Financial Instruments pertaining to the compensation payable to the client in accordance with the above paragraph will be carried out based on their value at the day of the publication of the Court ruling or the publication of the decision of the Cyprus Securities and Exchange Commission. The calculation of the payable compensation will be derived from the sum of the total established claims of the client against the Investment Firm, arising from the Services provided by the Investment Firm and regardless of the number of accounts of which it is beneficiary, the currency and place of offering the investment services.

Payments under the Scheme in respect of investments are subject to a maximum payment to any eligible investor of EU20.000; insofar as the amount of the claim exceeds the amount of EUR 20.000, the claimant will be only entitled to receive a maximum amount equivalent to EUR 20.000.