GPP Schedule 4 – Custody Disclosure Terms

Schedule for disclosure by Client to its Customers

INTRODUCTION

The numbered paragraphs in this Schedule set out, amongst other things, various disclosures and requests for consent that must be obtained by the Client in respect of the Customers for GPP’s benefit. Further to the obligations reflected in the body of this Agreement, the Client is under an obligation to ensure that the Customers receive a copy of this Schedule 4 and on an ongoing basis consent to the matters set out below.

INTERPRETATION

This Schedule is drafted from the narrative perspective of the Client addressing the relevant Customer. References in this Schedule 4 to “we”, “our” and similar terms should be taken to mean to the discretionary fund manager identified in the recitals as the Client. References to “you”, “your” and similar terms should be taken to mean the underlying client of the discretionary fund manager defined as the “Customer” in the body of this Agreement. Other capitalised terms are defined below in the context in which they appear.

RELATIONSHIP WITH GPP
1. We have entered into an agreement with Global Prime Partners Ltd., (“GPP”), on behalf of ourselves and each of our clients whereby GPP has agreed to provide safe custody services to our clients, including you (“GPP Agreement”).
2. The GPP Agreement binds us as well as you. When you become our client by signing our application form or similar document, you will also accept and be bound by the terms of the GPP Agreement. It is important for you to understand that this means you will be both our client and also a client of GPP.
3. GPP, with company number 06962351, has its registered office at 101 Wigmore Street, London, W1U 1QU. GPP is authorised and regulated by the Financial Conduct Authority (“FCA”) whose address is 12 Endeavour Square, London E20 1JN.
4. In consideration of GPP making their services available to you, you agree that:
  1. we are authorised to enter into the GPP Agreement on your behalf as your agent;
  2. you are bound by the terms of the GPP Agreement and acknowledge that the GPP Agreement constitutes a contract between you and us and also between you and GPP;
  3. we are authorised to give instructions to GPP on your behalf (as provided for in our terms of business with you and the GPP Agreement) and to provide information concerning you to GPP, and GPP shall be entitled to rely on any such instructions or information without further enquiry;
  4. GPP is authorised to hold cash and investments on your behalf and is authorised to transfer cash or investments from your account to meet your settlement or other obligations to GPP.
5. GPP will not provide you with investment advice nor will it give you advice or offer any opinion regarding the suitability or appropriateness (as relevant) of any transaction or order and will rely solely on information provided to it by us in respect of all such matters. Similarly, we are not responsible for GPP’s actions, omissions or any obligation they may owe you
  under the FCA rules or the regulatory system.
COMMUNICATION AND INSTRUCTIONS
1. GPP shall only accept instructions concerning your account(s) from us and not directly from you, unless a separate specific agreement has been entered into relating to the giving of instructions by you to GPP, including such further mandate and/or indemnities as GPP may require from time to time. In the absence of actual notice in writing to the contrary received from us in sufficient time to prevent the processing of any instructions, GPP shall be entitled to rely upon and act in accordance with any instruction which GPP believes in good faith to have been given by us and our agents on your behalf. GPP reserves the right to take such action as it considers appropriate in the event that it has sought instructions from us and we have failed to respond within a reasonable time. GPP will not be responsible for any delays or inaccuracies in the transmission of any instructions or other information due to any cause outside GPP’s reasonable control.
2. GPP may, in its absolute discretion, refuse to accept any order or other instruction for your account(s). GPP will advise us of its decision and may advise us of the reason for its decision unless prevented from doing so by applicable law, Court order or instruction by the FCA.
3. You should direct all enquiries regarding your account to us and not to GPP.
4. Any communications (whether written, oral, electronic or otherwise) between you, us and/or GPP shall be in English.
CUSTODY
1. In this clause: (i) FCA Custody Rules shall mean those rules made by the FCA in relation to the custody of assets including those contained in CASS 6 of the FCA Handbook; (ii) Custody Assets shall mean those investments held by GPP in custody for you pursuant to the terms of the GPP Agreement.
2. IMPORTANT: Where GPP hold registerable Custody Assets for you, normally such investments will be held in your name, in the name of an eligible nominee (specifically Global Prime Partners Nominees Ltd) or in an account designated with your name held by a third party. Where such Custody Assets are subject to the law or market practice outside of the United Kingdom, in certain circumstances permitted by the FCA Custody Rules, GPP may register the Custody Assets in the name of the relevant custodian or sub-custodian or in GPP’s name. In circumstances where the Custody Assets are held in GPP’s name such investments may not be segregated from GPP’s assets and, in the event of a default by GPP, may not be as well protected from claims of GPP’s creditors in comparison to if your investments had been segregated from GPP’s assets as the relevant assets will be comparatively less identifiable as belonging to you. Similarly, where the Custody Assets are held in the custodian or sub-custodian’s name, the title to those assets may not be as well protected as if the assets had been held in your name.
3. IMPORTANT: GPP may pool your Custody Assets with those belonging to other clients and where GPP do this your individual entitlements may not be identifiable by separate certificates, documents of title, entries on the issuers register or any other equivalent electronic records. In the event of an irreconcilable shortfall following a default by any custodian or any third party holding or delivering your Custody Assets, you may not receive your full entitlement and you may share in any shortfall on a pro rata basis with other clients.
4. GPP will be responsible for receiving and claiming dividends and interest payments to be credited to you. GPP will also credit any trail, renewal or similar commission it receives for your account. All dividends, interest and commission credited to your account or paid to you will be net of any withholding tax and other deductions required to be made by GPP and/or the payee in accordance with applicable legal or regulatory requirements. GPP will provide details of all such deductions required to be made by it and will pass on such information in relation to such deductions by others as it may receive. We will be responsible for any costs and expenses GPP may incur in receiving and claiming dividends, interest payments and commission. GPP, its nominee and any relevant custodian will not be responsible for reclaiming any withholding tax and other deductions but nonetheless may do so.
5. GPP shall not be responsible for informing us or you of any Corporate Actions or events concerning investments held in custody including take-over offers, capital reorganisations, company meetings, conversion or subscription rights but will nevertheless do so far as reasonably practicable. GPP will take up or participate in such events as instructed by us provided that such instructions are received within such time as GPP may stipulate. All entitlements relating to Corporate Actions in connection with investments held in pooled accounts will be allocated as far as is reasonably possible on a pro-rata basis, however, GPP may if this is not possible adjust the allocation of entitlements in such a way as appears to them to achieve a fair treatment for all participants in the pool.
6. GPP may appoint agents, nominees and custodians (whether in the United Kingdom or overseas), to hold Custody Assets. GPP may also appoint sub-custodians (including sub-custodians overseas) being qualifying custodians for the purposes of the FCA Rules, to
  hold investments for your account or us (as the case may be) on such terms as GPP considers appropriate.
7. GPP will exercise due skill, care and diligence in the selection of agents, nominees and custodians and before nominating a custodian it will undertake a risk assessment of that custodian in accordance with the FCA Custody Rules. GPP will be responsible for the acts and omissions of its nominee, however, in the absence of fraud or wilful default, GPP shall not be responsible for the default of any agents, nominees and custodians, securities depository, intermediate broker, clearing or settlement system or participant in such a system.
8. GPP may deposit your investments with a third party in a country that does not regulate the holding and safekeeping of financial instruments for the account of another person as permitted by the FCA Custody Rules. To the extent you are a professional client within the meaning of the relevant FCA rules that relate to client classification, you hereby request and instruct GPP to deposit your Custody Assets, where relevant, with sub-custodians located in various jurisdictions that do not regulate the holding and safekeeping of your Custody Assets. You acknowledge that the laws of those jurisdictions do not regulate the holding and safekeeping of your Custody Assets and that legal and regulatory requirements and practices for the separate identification of investments are different from those applying in the United Kingdom. In the event of the insolvency or any other analogous proceedings of a third party holding your custody assets, GPP may only have an unsecured claim against that third party on your behalf and you will be exposed to the risk that the assets received by GPP from the third party are insufficient to satisfy your claim and the claims of all other relevant clients.
9. Where we arrange for your Custody Assets to be held outside the United Kingdom there may be different settlement, legal and regulatory requirements and different practices for the separate identification of investments from those applying in the United Kingdom. In the event of the insolvency or any other analogous proceedings of a third party holding your custody assets, GPP may only have an unsecured claim against that third party on your behalf and you will be exposed to the risk that the assets received by GPP from the third party are insufficient to satisfy your claim and the claims of all other relevant clients. GPP shall accept no liability to you for the acts, failures to act or the insolvency of any custodian or subcustodian.
10. Through us, GPP will provide you with a statement of client assets if and when required by the FCA Custody Rules.
11. Your investments are subject to the security interests set out in clause 5 below in favour of GPP.
12. GPP is entitled to grant a security interest or lien over, or right of set-off enabling a third party to dispose of your Custody Assets in order to recover debts that relate to you or the business you conduct. GPP will only grant a security interest or lien over, or right of set-off enabling a third party to dispose of your Custody Assets in order to recover debts that do not relate to you or the business GPP transacts with you or on your behalf where GPP are required to by applicable law or regulation (in summary, where such an interest is required to be granted by the applicable law of a country outside of the United Kingdom). You agree to a third party having such a security interest, lien or right of set-off over your Custody Assets in such
  circumstances. For the avoidance of doubt, this includes a security interest, lien or right of set-off to facilitate the clearing or settlement of transactions. In addition, if such party becomes insolvent, GPP may only have an unsecured claim against the third party on your behalf and you will be exposed to the risk that the assets received by GPP from the third party are insufficient to satisfy your claim and the claims of all other relevant clients.
13. Where, through the application of rounding, aggregation or similar exercises or processes, a fractional entitlement to one or more securities arises, you consent to GPP applying such a fraction for its own account. In doing so, you agree that GPP discharges any fiduciary obligation owed to you in relation to such fractions.
CLIENT MONEY
1. In this clause FCA Client Money Rules shall mean those rules made by the FCA in relation to client money, including those contained in CASS 7 of the FCA Handbook.
2. Any identifiable money (in any currency) received by GPP for your account will be received and held by GPP in accordance with the FCA Client Money Rules (“Client Money”). Your Client Money will (unless we instruct GPP to pay such money into an individual client account) be pooled with Client Money belonging to our other Clients and will be held in an omnibus Client Money account with an approved bank, appointed by GPP in accordance with the FCA Rules.
3. In the event of an irreconcilable shortfall in a Client Money account following the default of a bank or any third party holding Client Money (such as a clearing house, settlement or money transfer system) you may not receive your full entitlement and may share in any shortfall on a pro rata basis with other affected Clients.
4. GPP may, from time to time, hold Client Money in a bank account with a bank outside the United Kingdom. In such cases, there may be different settlement, legal and regulatory requirements and different practices for the separate identification of investments from those applying in the United Kingdom. In the event of the insolvency or any other analogous proceedings of a third party holding your Client Money GPP may only have an unsecured claim against that third party on your behalf and you will be exposed to the risk that the money received by GPP from the third party is insufficient to satisfy your claim and the claims of all other relevant clients. GPP shall accept no liability to you for the acts, failures to act or the insolvency of any bank.
5. GPP will not pay interest on Client Money. However, GPP may, at its discretion, give us a notice at some point in the future stating that it will pay interest on Client Money and on what terms.
6. You agree that GPP will cease to treat as Client Money any unclaimed balances after a period of six years and GPP has otherwise taken reasonable steps to trace you and return any balance to you and pay the sums to charity. GPP will nevertheless make good any subsequent valid claim against such balances in accordance with the FCA Client Money Rules.
7. GPP may also appoint third parties (whether in the United Kingdom or overseas), to hold Client Money. GPP will exercise reasonable care in the selection of those third parties in accordance with the FCA Client Money Rules. GPP will be responsible for the acts and omissions of its nominee, however, in the absence of fraud or wilful default, GPP shall not be responsible for the default of any sub-nominee, custodian, sub-custodian, securities depository, intermediate broker or agent, clearing or settlement system or participant in such a system.
8. Through us, GPP will provide you with a statement of Client Money if and when required by the FCA Client Money Rules.
9. Your Client Money is subject to the security interests set out in clause 5 below in favour of GPP.
10. You understand and agree that where Client Money is deposited into an account with a third party, such third party may have a security interest or lien over, or right of set-off in relation to such money to the extent GPP is permitted to grant such rights by the FCA Client Money Rules. For the avoidance of doubt, this includes a security interest, lien or right of set-off to facilitate the clearing or settlement of transactions. In addition, if such party becomes insolvent, GPP may only have an unsecured claim against the third party on your behalf and you will be exposed to the risk that the money received by GPP from the third party is insufficient to satisfy your claim and the claims of all other relevant clients.
SECURITY
1. As continuing security for the performance of your obligations pursuant to the terms of the GPP Agreement including, without limit, the payment of all sums due to GPP from you, you agree to grant and grant GPP:
  1. a first fixed legal charge over all investments held for your account from time to time in respect of which title has been transferred to GPP its agents, nominees and custodians;
  2. a first fixed equitable charge over all certificates or documents of title relating to investments held from time to time for your account by or to the order of GPP;
  3. a first fixed charge over your rights in respect of any investments which are held by GPP (or to its order) for your account;
  4. a pledge, lien and right of set-off over and in respect of, all and any investments, documents of title to property, documents representing property and all money, investments and other assets of any nature held by or subject to the control of GPP (its nominees and custodians) for the your account (including, without limitation, the benefit of all contractual rights and obligations and any proceeds of sale), (together, the “Charges”).
2. GPP shall have, to the greatest extent permitted by law and the FCA Rules, all of the rights of a secured party with respect to any money or other assets charged to it and you confirm that you will, at the request of GPP, take such action as may be required to perfect or enforce any security interest and each irrevocably appoints GPP as their attorney to take any such action on their behalf.
3. You represent and warrant to GPP that you are the sole and beneficial owner of all money, investments or other assets of any nature transferred to or held by GPP their nominees and custodians or the same are transferred to or held by GPP their nominees and custodians with the legal and beneficial owner's unconditional consent and, in any event, are and will be transferred to or held by GPP their nominees and custodians free and clear of any lien, charge or other encumbrance and that you will not charge, assign or otherwise dispose of or create any interest therein.
4. If you fail to comply with any of your obligations to GPP, the Charges shall be enforceable and the powers conferred by Section 101 of the Law of Property Act 1925 (as varied and extended by this Agreement) shall be exercisable. Section 103 of the Law of Property Act 1925 shall not apply to this Agreement. In such circumstances GPP may without prior notice to you or us, sell, charge, pledge, deposit, realise, borrow or otherwise deal, with any investments or other assets GPP their nominees and custodians are holding for your account on any terms it considers appropriate. The proceeds of any sale or realisation of such investments or other assets and any moneys from time to time deposited with or held by GPP their nominees and custodians under this Agreement, shall be applied towards the satisfaction of your liabilities to GPP.
5. Provided GPP has acted reasonably, GPP shall have no liability to you for any cost, loss, liability and expense, including without limit any loss of profit or loss of opportunity incurred or suffered by you in consequence of any exercise by GPP of any right or remedy under this Clause 5 and any purchase, sale, or other transaction or action that may be undertaken by GPP shall be at such price and on such terms as GPP shall, in its absolute discretion, determine.
6. In exercising any right or remedy pursuant to this Clause 5, GPP is authorised to combine accounts, effect such currency conversions and enter into such foreign exchange transactions with, or on behalf of, you, at such rates and in such manner as GPP may, in its absolute discretion, determine.
7. No third party shall be required to enquire as to the validity of the exercise by GPP of its powers under this Clause 5.
LIABILITY
1. Neither GPP, nor any of its directors, employees or agents, shall be liable for any loss or damage sustained by you as a direct or indirect result of the provision by GPP of its services, save that nothing in the terms set out in this Schedule exclude or restrict any liability of GPP resulting from:
  1. death or personal injury;
  2. breach of any obligation owed to you under the regulatory system; or
  3. the negligence, fraud or wilful default of GPP.
2. GPP shall not in any event be liable for loss of profits, loss of opportunity, loss of business, loss of savings, loss of goodwill, claims by third parties, loss of anticipated savings (whether direct or indirect) or for any type of special, direct, indirect or consequential loss howsoever caused, even if caused by GPP negligence and/or breach of contract and even if such loss was reasonably foreseeable or GPP had been advised of the possibility of the Client incurring the same.
CONFLICTS OF INTEREST
1. GPP or its associates may provide services or enter into bargains in relation to which GPP, or its associates, has, directly or indirectly, a material interest or a relationship of any description with a third party which may involve a conflict of interest or potential conflict of interest with you. GPP or any of its associates may, for example:
  1. be the Client to a transaction that is executed by GPP (whether or not involving a mark-up or a mark-down by GPP or its associates);
  2. be the financial adviser to the issuer of the investment to which any instructions relate;
  3. have a (long or a short) position in the investments to which any instructions relate; or
  4. be connected to the issuer of the investment to which any instructions relate.
2. GPP may receive remuneration from fund managers in connection with GPP providing services to them. These payments are calculated by reference to the value of assets that GPP holds in custody for its Customers.
3. GPP has adopted conflict of interest policies in accordance with the FCA’s requirement for authorised firms to manage conflicts of interest fairly. Through us, you may ask GPP for further information in relation to such policies.
4. You acknowledge that neither GPP nor any of its associates is required to disclose or account to you for any profit made as a result of acting in any manner described above.
COMPLAINTS
1. In the event of any complaint regarding GPP’s services you should contact the Head of Compliance ([email protected]) of GPP.
2. The Head of Compliance will, as soon as is practicable, investigate the matter with any employees who may be directly concerned to determine the appropriate course of action. After investigating the Head of Compliance will write to the complainant detailing the results of the investigation and offering, where appropriate, redress.
3. GPP will consider a complaint to be closed in any of the following circumstances: (a) If at any time a complainant has accepted in writing an offer of redress or has written to GPP confirming that he/she is satisfied with GPP’s response to the
  complaint (or simply confirms in writing that he/she wishes to withdraw the complaint). The Head of Compliance will write to the complainant acknowledging receipt, making redress (if appropriate) and confirming that the complaint has been closed; or (b) If the complainant has not replied to an initial or interim letter offering redress having been invited to do so within eight weeks of the date of the letter.
4. If you are an eligible complainant (as defined in the FCA Rules) you may have the right to refer your complaint to the Financial Ombudsman Service. The Financial Ombudsman Service is a free and independent statutory dispute-resolution scheme for financial services. Details of who are eligible complainants can be obtained from the Financial Ombudsman Service. The Financial Ombudsman Service’s website is www.financial-ombudsman.org.uk and they can be contacted at:
  1. The Financial Ombudsman Service
    Exchange Tower
    London E14 9SR
    United Kingdom
    Email: [email protected]
    Telephone: 0800 0234 567 or 0300 1239 123
INVESTOR COMPENSATION
1. GPP is covered by the UK Financial Services Compensation Scheme (“FSCS”). Depending on the type of business and your circumstances, compensation, may be available from that scheme if GPP cannot meet its obligations to you. Eligibility also depends upon the type of business and the circumstances of the claim. Claims made to the FSCS are subject to maximum limits on compensation. The claim limit for investment business is £85,000 per person, per authorised firm.
2. Further information about the FSCS, including who may be eligible to make a claim should the need arise, is available on the FSCS website (see www.fscs.org.uk).
OTHER MATTERS
1. GPP will categorise you as the same client categorisation as we have adopted and such categorisation will apply to the business that GPP conducts with you.
2. We will provide you with any relevant costs disclosure from GPP.
3. In the course of providing services to you, GPP may pay or receive or share fees, commissions or other non-monetary benefits with or from any other person to the extent permitted by the FCA Rules. Through us, GPP will separately notify you of the details of any such arrangements if required by the FCA rules.
4. GPP may be required under the FCA Rules to provide you with certain information in a “durable medium” and may wish to do so in a durable medium other than paper. You give your express consent to GPP to provide this information to you by means of a durable
  medium that is not paper including via a client portal accessible through a secure login or email that is personally addressed to you.
5. You also give your express consent to GPP to provide information which is required by the FCA rules that is not personally addressed to you by means of a website. You specifically consent to GPP providing this information on our website: https://gpp.group/.
6. You give your express consent to GPP to act on our instructions in relation to payments that concern your money or assets (including, without limitation, the payment of fees to us).
AMENDMENT
1. You agree that GPP has, subject to applicable law, the right under the GPP Agreement to alter these terms at any time, upon giving prior notice to us unless it is impracticable in the circumstances to give such notice. We are unable to influence any such amendments.
GENERAL
1. GPP’s obligations to you shall be limited to those set out in this Schedule and GPP shall, in particular, not owe any wider duties of a fiduciary nature to you.
2. No third party shall be entitled to enforce the terms set out in this Schedule in any circumstances.
3. Any failure by GPP (whether continued or not) to insist upon strict compliance with any of the terms set out this Schedule shall not constitute nor be deemed to constitute a waiver by GPP of any of its rights or remedies.
4. The terms set out in this Schedule shall be governed by English law and you hereby irrevocably submit for the benefit of GPP to the non-exclusive jurisdiction of the courts of England.