Increased protection for investors
New stockbrokering legislation in line with the Markets in Financial Instruments Directive (MiFID) came into force in Iceland on 1 November 2007. It aims to unify regulations covering investment service providers in the European Economic Area and further improve consumer protection for investors. The legislation provides for increased supervision and professionally researched and unbiased transaction orders; it also addresses investment consulting and the availability of information. Download the MiFID document here.As was previously the case, everyone who wishes to become a client of an investment firm must agree to the firm’s terms and conditions, and then fill in a number of forms before business can begin. To conform to new provisions of the legislation, investment firms must now categorise clients with respect to their financial standing, knowledge and experience. Consumer protection for investors varies according to the category they are placed in.
One of the legislation’s main objectives is to ensure that investment firms know their clients and classify each of them appropriately. This is the best way to guarantee that the firms provide suitable and proper information about investments, in accordance with client categories, so that clients can reach an informed decision about their investments.
Investors fall into three main categories:
- Retail investors
- Professional investors
- Eligible counterparties
Evaluation of financial instruments
If an investor is not an eligible counterparty or a professional investor, it may be necessary to evaluate his or her knowledge of different financial instruments. This information will be used to warn clients against making investments in instruments that they do not sufficiently understand. If a client resolves to invest in stock which we consider to be inappropriate, despite our warnings about the possible danger inherent in the investment, then the client may continue, and we will of course comply with the instructions we receive.We provide all our clients with our Overview of Financial Instruments and the Risks Involved, which is Annex 2 of our terms and conditions. This document gives an insight into how we select markets that meet the wishes of our clients.
Saga Capital’s Policy on Best Execution
We have established rules regarding the best execution-of-transaction instructions. According to these rules, we will always do our utmost to achieve the best possible results in accordance with our clients’ wishes. Best possible results means that on selecting a particular course of investment, our computations will take into account certain factors, including price, expenses and the business effectiveness of the instructions. The introduction of MiFID now means that the methods we use to calculate these results are governed by strict legislation.We provide all our clients with our Policy on Best Execution of Transaction Orders. This document gives an insight into how we select markets that meet the wishes of our clients. Clients who would like further information about our Policy on Best Execution should contact us by sending an e-mail to vidskipti@sagacapital.is.
Saga Capital’s Policy on Conflicts of Interest
Saga Capital has published its Policy on Conflicts of Interest. This policy aims to prevent conflicts of interest between us and a client, or between two or more of our clients. It includes provisions whereby we separate staff who are working with different clients whose interest may be incompatible. We inform clients immediately whenever we perceive a danger, but we cannot guarantee that we will be able to prevent a conflict of interests.Clients who would like further information about our Policy on Conflicts of Interest should contact us by sending an e-mail to vidskipti@sagacapital.is.
