General Terms of Business
These General Terms of Business regulate mutual rights and obligations between the Universal Capital Bank AD Podgorica as an authorised agent in the securities market (further in the text: the Bank) and investors in securities as well as provide descriptions of certain types of risk involved in carrying out individual transactions with securities. The General Terms of Business represent an abbreviated excerpt from the Universal Capital Bank AD Podgorica’s Department of Broker-Dealer Services’ Business Rule Book (further in the text: Broker-Dealer operations Rule Book). The Broker-Dealer operations Rule Book provide detail on the provisions mentioned in the General Terms of Business.
OPERATIONS INVOLVING SECURITIES
Operations with securities encompass:
Intermediation in purchase and sale of securities, upon orders from clients (on bank’s behalf and for client’s benefit) with a fee charged (the so called brokerage operations); trade in securities on bank’s behalf and for bank’s own benefit in order to achieve a difference in price (the so called dealer operations).
All natural persons or legal entities, domestic or foreign, may become bank’s clients (further in the text: Client).
ESTABLISHING A BUSINESS RELATION
By signing a trade in securities representation contract (further in the text: the Contract), the Client gives consent to the Bank to engage in activities necessary to purchase, that is, to sell securities, on its own behalf and for Client’s benefit, according to the Contract.
Activities necessary to purchase, that is, to sell securities include legal, financial and technical activities necessary to carry out prior to executing the transaction itself, in line with the regulations governing that field.
After signing the Contract with the Bank, any of the Bank’s clients may provide instructions regarding purchase, that is, sale of securities, as well as change previously given instructions, by submitting an order. The order represents the Client’s unilateral expression of will addressed at the Bank. The order can be addressed orally (immediately or via phone) or in written form (including fax) or in the form of a digital document.
The Bank supplies the Client with information on the circulation and prices of all securities traded at the stock exchange in Montenegro, immediately, to the Client’s office or through other means of communication. Apart from that, the Bank provides the Client with information on supply and demand and other available information necessary to make decision on a purchase, that is, sale of securities. The Bank is responsible for the accuracy of the information it supplies to the extent to which it is accurate at the available source. The Bank provides information and advice at the Clients request, based on available information and in line with the code of ethics.
RIGHTS, OBLIGATIONS AND RESPONSIBILITIES
The Bank is not responsible for the accuracy of the information contained in third parties’ databases (stock exchange data, issuers’ data, etc.), which it uses in its calculations. Also, the Bank is not responsible for the diligence of its operation if it is prevented from maintaining it due to force majeure (power outage, failure of the telecommunications system, stock exchange interrupting its operation and similar cases of force majeure).
The information, data and advice provided at the Client’s request do not represent an attempt of the Bank to entice the Client to purchase, that is, sell securities. Instead, their purpose is to assist the Client in making a decision. The information and advice provided also refer to risks linked with potential transactions. However, it is the Client that makes a decision on purchasing, that is, selling securities, and they alone bear the risk of making a decision. The Bank does not bear the risk of any potential failure to make a profit or any losses that the Investor takes in managing their portfolio.
The Bank is keeping a contract record in a special programme (back office), in digital form. Also, the Bank assigns appropriate ordinal numbers to each contract and order and keeps them in chronological order in a special location. After a received order is entered into the contract register, it is considered that the Bank accepted the order. The sequence of executing orders is determined by the time of their reception and the price of securities the orders refer to.
Every instruction on changing orders, their recall and data on their exe are also entered into the contract record. The instruction for changing or recalling orders can be issued in the same way as the orders themselves. Orders can be changed and recalled (“withdrawn”) up until the moment of a transaction taking place. If the transaction has already been concluded, the Client is no longer able to change or recall (“withdraw”) an order.
At the Client’s request, the Bank is obliged to send them a receipt on the recall (“withdrawal”) of an order referring to their Contract.
The Bank is not obliged to execute an order for purchasing securities if the Client failed to pay to the Bank’s account the amount of funds corresponding to the value of the transaction plus the appropriate fee. Also, the Bank is not obliged to execute and order for selling securities before it is recorded in the depository of the Central Depository Agency (further in the text: CDA). The Bank is not obliged to execute an order if there are indications that the execution of the order would imply committing a criminal offence related to money laundry.
The fee, representing the transaction cost for the Client, includes the Banks, stock exchange and CDA’s fees, and is determined by the Bank’s tariff list. The Client can obtain information about the Bank’s tariffs on the Bank’s premises.
The Bank keeps the Client’s financial resources in a special account, according to regulations. The Client is responsible for the efficient use of those resources and an interest rate is calculated on them. Client’s financial resources do not make part of Bank’s property nor of its liquidation or bankruptcy estate nor can they be used for the collection of claims against the Bank.
The Bank makes a disbursement for the sold securities to the Client’s account, within a deadline determined by regulations (day of transaction plus two working days – T+2). Immediately after CDA’s balancing, the Bank issues an order for paying the funds to the Clients account in the amount corresponding to the value of the transaction minus transaction costs.
The bank informs the Client about the transaction without any delays and provides them with a report in the calculation of the transaction in written form as well as a digital document. The calculation report contains a detailed analytic display of data on the transaction.
The ownership of the purchased dematerialised securities is obtained on the day of balancing in line with the CDA’s rules, that is, on the second working day from the day of transaction (T+2).
The information on the Client, on the status of their account and the turnover, on the business operation the Bank carried out on their behalf, as well as any other information the Bank acquires while carrying out business operations on the Client’s behalf, is considered confidential and is treated as such by the Bank. The access to such information can be granted to third parties only in cases prescribed by law.
The Bank is obliged to dedicate special attention to preventing conflict of interest while engaging in activities related to investment analyses and advising, its own trade in securities, management of securities portfolio and all other activities involving securities, including issuing and selling securities.
The Bank is a member of Montenegroberza AD Podgorica and the Central Depository Agency AD Podgorica. It is providing its services in accordance with the laws and regulations of Montenegro, the terms of the Central Depository Agency AD, Montenegroberza AD and its own Department of Broker-Dealer Services’ Terms of Business. The Bank is subject to the supervision and control of the Securities Commission of Montenegro, in line with the law.
The general terms of business and service tariffs are displayed on the Bank’s premises and, as such, available for all Clients to look into.