0. framework and scope - millennium bcp · m) drawing up of investment research, financial analysis...
TRANSCRIPT
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
1/45
Financial Intermediation Activity Internal Regulations
0. Framework and scope 1. The Service Order (SO) 20/010 issued on 11 April 2006, approved the Internal
Regulations of Banco Comercial Português, S.A, Banco Millennium BCP Investimento, S.A and of Banco ActivoBank (Portugal), S.A relating to financial intermediation activities. This SO is nowadays manifestly out of date, namely due to the successive entrance into force of several regulatory instruments having a direct impact on the Financial Intermediation Activity. We emphasize the several alterations introduced in the Securities Code due to the implementation of the Markets in Financial Instruments Directive (MiFID) transposed into the Portuguese legal framework in October 2007. Furthermore, due to the regulations successively enacted by the competent legislators (Government and Parliament) and by, within their respective regulatory competences, the supervision authorities, the internal regulations concerning financial intermediation activities carried out by the Bank are, today, subject to a much more complex, diversified and demanding legal framework than the one in force on the date the SO 20/010 was approved.
2. In addition, the article 13 of the CMVM Regulation nr. 2/2007, altered by the
Regulation of the CMVM nr. 3/2008 (Pursuit of Financial Intermediation Activities), mandatorily obliges all Financial Intermediaries to ”comply with all applicable policies and legal and regulatory procedures, permanently compiled and made available for consultation” not only for the officers and employees but also for supervision purposes. 1 This Regulation issued by the supervision authority says that the Bank has, mandatorily, to comply with the following duties:
a) Have an autonomous, updated and comprehensive document
summarizing the financial intermediation activities carried out; b) The contents of the above-mentioned document must be easily
understood, known and effectively used by those who, in any way whatsoever, participate or are involved in the Financial Intermediation Activity;
c) The Bank’s internal and functional organization related with Financial Intermediation activities and the respective policies, products and services must be coherent, and appropriate and comply with the above-mentioned duties.
3. The Bank considers that the demands made to the Financial Intermediaries by the provisos of article 13 mentioned above (compilation of the policies and procedures used) can be fully observed without having to mention, in the same document, all and each legal and regulatory requirements presently in force on Financial Intermediation or, otherwise, the Bank will not be able to comply
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
2/45
with another demand made by that regulatory requirement (the relevant documents must be easily accessed by the users). Thus, this SO presents:
a. The transcription of provisos of the Securities Code and of provisos
of other legal and regulatory sources whose contents, for their importance and frequent use by the financial intermediaries, are herein reproduced (literally or with adjustments);
b. The remission to other documents, whether internal (ex: RP
0122/Prior Classification of Customers for the Transaction of Financial Instruments) or legal or regulatory requirements. They are all described, non-exhaustively, in the hereto-attached Annex;
c. The insertion of original requirements especially aims at facilitating
the interpretation and the practical resolution of technical issues related with financial intermediation activities.
4. This document is necessarily comprised within the documents management
model in force in the Bank: being a Service Order it mainly deals with legal and regulatory requirements, without damaging the ability to regulate some aspects related with the Bank’s internal organization in Financial Intermediation issues.
On the other hand, the Rule of Procedures on Financial Intermediation that shall be edited in the future, in accordance with article 51, shall, systematically establish internal procedures and will detail organizational functions, providing an answer to the question: who does it, what one does, when one does it and how one does it.
This Service Order and the future Rule of Procedures shall represent, for all users, two complementary work tools dealing the first mainly with “legal and regulatory” issues and the latter with “procedures/rulings issues” connected with the Financial Intermediation activities pursued by the Bank.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
3/45
Index 0. Framework and Scope I. General Provisos
1. Purpose and Scope
2. Financial Intermediation Regulations - Sources
3. Financial Intermediation Activities
4. Functional Contents
5. Financial Instruments
6. Complex Financial Products
7. Responsibility for Unlawful Acts II. Internal Organization
8. Internal Control – General Principles
9. Internal Control System
10. Logistics
11. IT
12. Human Resources
13. Conflicts of Interests and execution of Personal Transactions/Relevant Individuals
14. Inside Information/Trade on Own Account
15. Officers' transactions in Closed Periods III. Market Defence and Information for Investors
16. Avoiding Excessive Intermediation
17. Market Defence
18. Information for Investors IV. Customers and their Orders
19. Operations
20. Assessment of the operation (Appropriateness)
21. Exclusion of the assessment of the transaction (Non Complex Financial Instruments)
22. Contents of the Required Information
23. Rendering Information
24. Receipt of Orders
25. Acceptance and Refusal
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
4/45
26. Especially Forbidden Transactions
27. Form and Validity
28. Handling Client’s Orders
29. Grouping orders and allocating transactions
30. Allocation of transactions executed on own account
31. Withdrawal and Alterations
32. Best Execution
33. Best Execution Criteria
34. Information for non-qualified Investors regarding the Execution Policy
35. Transmission for best execution
36. Responsibility towards Originators
37. Duty to inform while executing orders
38. Safeguarding the client’s assets V. Financial Intermediation Agreements
39. Contracts with non-qualified investors
40. Investment advice
41. Portfolio Management Agreement
42. Assistance
43. Placement and Guarantee of Placement
44. Underwriting
45. Registry and Deposit
46. Acting as Counterparty and Conflicts of Interest
47. Transactions with derivative financial instruments
48. Loan Agreement for investing in Financial Instruments
49. Risk Control
VI. Sundry Provisos
50. Sundry
51. Transitory provisos
52. Effectiveness and disclosure
VII. Annexes
VIII. Notes
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
5/45
I. General Provisos 1. Purpose and scope
1. This SO aims to:
a) Regulate the exercise of the financial intermediation activity in Banco Comercial Português, S.A (hereinafter referred to as Bank);
b) Make a systematic compilation, in a document permanently available
for consultation or supervision, of the policies and procedures and legal requirements relating to the Bank’s financial intermediation activity.
2. Particularly, this SO applies to: 2
a) The members of the Bank’s management and supervision bodies;
b) The Bank’s employees regardless of their hierarchical function and/or nature or duration of their respective work relation, exercising financial intermediation activities or related operational functions;
c) To employees of the tied agent, in accordance with the provisos of
article 294-A of the Securities Code or of sub-hired entities that exercise for the Bank any of the activities mentioned in the previous paragraph;
d) Other Employees and /or officers in accordance with article 14 (6) of
this SO or any applicable legal requirement. 3. In all applicable cases, the Bank shall include provisos to assure the
compliance with this SO in all the contracts established. 4. The provisos of this article relating to the scope of this SO do not harm the
subsequent issue, by the respective competent bodies of each one of the companies part of Group Banco Comercial Português (hereinafter referred to as the Group) exercising financial intermediation activities, of a resolution that, within the respective legal framework, approves the contents of this SO, without damaging the specific adjustments that need to be carried out.
2. Financial Intermediation Regulations - Sources
1. The regulations focusing the Bank’s Financial Intermediation activities are:
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
6/45
a) The applicable legal or regulatory requirements mentioned in the Annex of this SO;
b) This Service Order; c) The sectorial documents that are part of the Bank’s performance
policies for financial intermediation activities and any other applicable internal regulations, namely those given as an example in the Annex of this SO;
d) The applicable conventional rulings established between the customer and the Bank within the scope of the legitimate principle of autonomy of will as established by law.
2. In case of divergence or contradiction in the application or interpretation between internal and/or conventional regulations relating to legal or regulatory requirements, the latter shall always prevail.
3. Without damaging the updating of this SO, whenever necessary, all the references or mentions made to any specific regulation source herein made also comprise any rulings that, in the future, alter or replace them.
3. Financial Intermediation Activities 3
1. Financial Intermediation Activities are: a) The services and activities related with investment in financial
instruments mentioned by article 290 of the Securities Code; b) The ancillary services related with the services and activities
mentioned by article 291 of the Securities Code; c) The management of collective investment undertakings and the
exercise of functions as depositary of securities that are part of the assets of those institutions.
2. On this date, the Bank is registered at the CMVM 4 as a financial intermediary authorized to exercise the following activities:
a) Reception and transmission of orders on a third party’s behalf; b) Execution of orders on a third party’s behalf in the spot market; c) Execution of orders on a third party’s behalf in the forward
market; d) Securities dealing on own account; e) Management of portfolios on a third party’s behalf; f) Placement in distribution public offerings; g) Registration and deposit of securities; h) Foreign exchange services and rental of safety deposit boxes
linked to the provision of investment services; i) Credit granting, including securities loans for the carrying out of
transactions involving securities wherein the credit institution granting the credit is involved;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
7/45
j) Advice on capital structure, industrial strategy and related areas as well as mergers and acquisitions;
k) Assistance relating to public offer of securities; l) Advice for investment in securities; m) Drawing up of investment research, financial analysis or other
general recommendations relating to transactions in financial instruments.
4. Functional Contents 5
1. The following tasks pursued by the Bank are defined as making part of the
essential nucleus of each one of the financial intermediation functional contents to which they refer to, namely:
a) Reception and transmission of orders on a third party’s behalf: Check the conditions according to which the customer’s
orders are received and transmitted. b) Execution of orders on a third party’s behalf:
Check the conditions for the execution of orders given by the customers;
Carry out the necessary controls for the making of the operations, validating the open operations and verifying the correct settlement of the transactions made.
c) Securities dealing on own account: Monitor the decision-making processes and control the
entries made. d) Placement in distribution public offerings:
Assess the regulatory conditions to which the operations and their handling are subject;
Make proposals for operational rules and submit the same to CMVM for approval;
Monitor compliance with the instructions received; Control the settlement of operations and the result
achieved. e) Assistance relating to public offer of securities:
Make the prospectus and launch announcements; Prepare and present the registration requests; Monitor the presentation conditions.
f) Registration and deposit of securities: Assure the correct allocation and custodianship of the
customer’s securities. g) Exercise of the functions of depository of the securities that
are part of the assets of collective investment undertakings: Assure the registration of the assets that are part of the
assets of each fund enabling the segregation between own assets and the assets of each fund;
Register and control the issue of the fund’s participation units;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
8/45
Control the activities exercised by the fund’s managing entity so as to enable (1) the verification that the legal limits are being observed and the compliance with the investment policy of the fund by the managing company, (2) the evaluation of the way to estimate the value of the participation unit and of the consistency of the steps taken to reconcile the securities accounts and of the liquidity of the managing company.
h) Credit granting, including securities loans for the carrying out of transactions involving securities wherein the credit granting the credit is involved: Verify the Customer’s financial capacity to service the
debt; Assure the Customer’s knowledge for investment in
securities; Verify the criteria adopted in the provision of limits and
guarantees as well as the settlement terms; Verify the non-existence of any circumstance that render
impossible the granting of credit, namely if the securities in question are or have been issued by the Bank or by a company of Group BCP.
i) Management of portfolios on a third party’s behalf: Register the investment decisions and the orders (binding)
given on behalf of the customers; Register the operations made on behalf of the customers; Gather sources of pricing relating to the assets in the
portfolio and on their respective valuing; Make control procedures involving (1) decision-making, (2)
carrying out of transactions, (3) pricing of the assets, (4) positions in the portfolio, (5) monitoring and management of the risk incurred by the Customer’s portfolios;
Remit information to the Customers and supervision authorities;
Assure the security of the information systems and procedures to prevent the occurrence of money laundering operations.
j) Verification, registration and accounting of the operations made within the scope of each one of the activities: Assure the conformity of the records and respective
related accounting. k) Advice for investment in securities:
Provide, in accordance with the law, personalized advising services to customers, in their capacity of potential or effective investors.
l) Drawing up of investment research, financial analysis or other recommendations: Make, with the help, or not, of other specialized entities,
of any studies, analysis or recommendations relating to financial intermediation issues.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
9/45
2. The definition of the number of essential tasks made in the previous number does not prevent the duty that any professional has of exercising, within his/her professional scope, any other acts whatsoever, ancillary, prior, successive, necessary or convenient, appropriate in any case to the efficient and diligent compliance with any of the above mentioned duties, in accordance with the law, the instructions conveyed by the respective hierarchy and the applicable best practices.
3. The Bank acknowledges the best market practices in terms of financial intermediation, adopting the recommendations issued by CMVM and inserting the same in the documents that it periodically edits with the compilation of rulings and policies regarding the several functional contents.
5. Financial Instruments
1. Are, according to the law, 6qualified as Financial Instruments: a) The following securities:
i) Shares; ii) Bonds; iii) Participation Units; iv) The participation units in collective investment
undertakings; v) Covered warrants; vi) Rights detached from the securities referred in i) to iv),
provided that the same applies to all the issue or series or are described in the issue conditions;
vii) Other documents representing similar juridical situations provided they are able of being traded on the market;
b) The money market instruments, with the exception of the payment means;
c) The derivative instruments for the transfer of credit risk; d) Differential Contracts; e) The options, futures, swaps, the term contracts and any other derivative
contracts relating to: a: i) securities, foreign exchange, interest, yields rates or relating to other derivatives, financial indexes or financial indicators with physical or financial settlement; ii) commodities, climate variables, freight fees, issue licenses, inflation rates or any other official statistical data, with a financial settlement, although by the option of only one of the parties involved; iii) commodities, with a physical settlement provided they are traded in a regulated market or in a multilateral trading system or, if they are not to be traded, they present characteristics similar to the ones of other derivative financial instruments, in accordance with article 38 of the Regulation (EC) nr. 1287/2006, of the Commission, dated 10 August;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
10/45
f) Any other derivative contracts, namely those relating to any of the elements mentioned in article 39 of the Regulation (EC) nr. 1287/2006, of the Commission, dated 10 August, provided that they all present characteristics that are similar to those of other derivative financial instruments in accordance with nr. 38 of that same Diploma.
2. All Financial instruments mentioned in the previous number are, in
accordance with the law, classified as Complex, exception made to the following securities, legally qualified and Non-complex financial instruments, 7provided that they comply with the requisites stated in nr. 21 of this SO: - Shares traded in a regulated market or equivalent; - Bonds; - Participation units in collective investment undertakings provided that
this participation is made through harmonized securities. 6. Complex Financial Products
1. Are, by law8, classified as Complex Financial Products the financial instruments that, although assuming the legal form of an existing financial instrument present characteristics that are not directly able of being identified with those of that instrument since they have, associated to it, other instruments on whose evolution their yield depends, totally or partially.
2. The Complex Financial Products have to be identified as such in the
information conveyed to the customers and investors and this capacity must also be mentioned in their advertisement.
3. Are Complex Financial Products:
a) Structured savings products (ICAEs) 9; b) 10Certificates, except when they only faithfully reproduce the evolution
registered by a financial instrument that cannot be considered a Complex Financial Instrument;
c) Securities conditioned by credit events; d) Structured Bonds; e) Covered Warrants; f) Fund’s application associated to financial instruments, either by
indexing to them the respective yield (when the total of the capital invested is not guaranteed by the balance sheet of the credit institution) or because their combined trading implies the subscription of, or the individual adhesion to Financial Instruments;
g) Contracts and insurance operations linked to investment funds (unit linked).
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
11/45
7. Responsibility for Unlawful Acts
The violation by the individuals mentioned in nr. 2 of article 1 of this SO and/or any of the other legal requirements that regulate the Bank’s financial intermediation activity constitutes a serious disciplinary infraction, without damaging the civil liability, administrative offence, or criminal that may equally be incurred if the facts occurred so determine.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
12/45
II – Internal Organization 8. Internal Control – General Principles
1. Particularly in what concerns financial intermediation, the internal control system aims to assure:
a) The objective and appropriate management and control of the activity risks, the prudent and correct evaluation of the assets and liabilities together with the implementation and utilization of mechanisms to prevent and protect against forbidden, unlawful, fraudulent, negligent and non-authorized acts;
b) The full compliance with the applicable legal, regulatory and internal requirements, including those relating the prevention of money laundering and terrorism financing; c) The defence of the Bank’s image and reputation before its customers, shareholders, employees and supervision authorities.
2. The several areas and units and their Employees and Officers must
exhaustively and systematically observe, in the performance of their functions, the internal control procedures adopted for the different functions, namely those regarding the segregation of functions, justification of the accounting and financial information, risk evaluation and accomplishment of objectives, assuring the appropriate transparency to the activities they exercise.
3. Taking into account the laws regulating the protection of personal data, the
treatment, automatic or not, of the personal data of the Customers, Investors and of the remaining creditors must observe all the safety and confidentiality rules (technical and organizational) suited to the risk that the data treatment implies, namely those relating to forbidden accesses.
4. To comply with the provisos of the previous numbers, business activities and
the respective operational and control services must be completely segregated (physically and functionally).
5. The units that carry out securities custodian services must assure an
appropriate segregation between the securities of their own portfolios and those part of the customer’s portfolios.
6. The Bank’s internal control system relating to the financial intermediation
activities it is entitled to exercise is based on: a) The objective and detailed definition of the organizational structure; b) A highly automated business and operational management system; c) The establishment of regulations and procedures disclosed to all units;
and d) The identification and monitoring of the risks related to the activities it
carries out.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
13/45
9. Internal Control System
1. In what concerns financial intermediation, the Bank must: a) Comply with its duties and adopt, in accordance with this document and the Internal Control System in force, an independent, appropriate and objective internal control system; b) Relating to the people involved in the internal control11:
i. Provide them with the appropriate means and technical abilities; ii. Assure that the individuals mentioned in article 1 (2) of this SO
involved in the internal control are not involved in or exercise the activities they control;
iii. Assure that the method used to determine their remuneration cannot compromise their objectivity.
2. For the purposes of the previous number the Bank has granted special
competences to the following units: a) Relating to the compliance control system, to the Compliance
Office; b) Relating to risk management, to the Risk Office; c) Relating to the internal audit, to the Audit Department.
4. Concerning communications, to or from officers and employees in matters
involving inside information and conflicts of interests, the Company Secretary's Office performs the tasks legally committed to the Bank.
5. Without damaging the provisos of the previous numbers and the
responsibility for guaranteeing the compliance with the internal control system requirements entrusted, in accordance with article 305-D, (1) of the Securities Code, to the supervision and administration bodies of the Bank, the duty to, firstly, systematically and regularly control each one of the financial intermediation activities carried out by the Bank, belongs, specifically and directly, to the Unit, its Officers and Employees.
6. The attributions of the Compliance Office are12:
a) To, systematically, monitor the actions and procedures carried out by the Bank in order to assess, both before and after, the risk of non-compliance with the duties to which the Bank is obliged to observe;
b) Advise the persons mentioned in article 1 (2) to comply with their duties when executing financial intermediation activities;
c) Identify and prevent financial intermediation operations suspicious of being money laundering or terrorism financing actions or those ruled by article 17 (3)(market defence);
d) Immediately inform the EBD of any signs showing a serious or a very serious violation of the duties established by nr. 2 of article 388 of the Securities Code;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
14/45
e) Assure the updated registration of non-compliance situations and of the measures proposed and adopted;
f) Make and present, at least once a year, to the EBD and to the supervisory body a report on the system that internally controls compliance, identifying the non-compliance situations detected and the measures adopted to correct eventual deficiencies.
7. The attributions of the Risk Office are 13:
a) Follow-up the adequacy and efficiency of the Bank’s policies and procedures, considering the risk degree tolerated, namely by complying with accounting and prudential rulings;
b) Monitor if the individuals mentioned in article 1 (2) comply with the rules established and the adequacy of the measures adopted to correct eventual deficiencies;
c) Advise the EBD and make and present to it and to the supervision body, at least annually, a report on the risk management and on the measures taken to correct eventual deficiencies.
8. The attributions of the Audit Department are14:
a) Adopt and maintain an ongoing audit plan to examine and assess the adequacy and efficiency of the systems, procedures and rules related with the Bank’s internal control system;
b) Issue recommendations based on the results achieved by the assessments made;
c) Make and present, at least once a year, to the EBD and to the supervision body, a report on audit issues, identifying the recommendations observed.
10. Logistics
1. The services dealing with the receipt, transmission and execution of orders of customers and those handling the registration and deposit of securities and functionally separated, as per the principle according to which transactions have their origin in the different Business Areas and are controlled centrally when of their re-specification and physical and financial settlement.
2. The provision of services by the several Departments and Employees is made
by complying with best practices so as to prevent conflicts of interest that may, objectively, question the principle “the customer comes first”. 15
3. The current organizational structure enables having an appropriate
segregation of the following functions in each of the following main activities:
a) Origination and contracting of the transactions;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
15/45
b) Receipt /issue of transaction supporting documents; c) Authorization of transactions; d) Registration, allocation and settlement of the transactions in the
respective accounts. 11. IT
1. The Bank’s operational system has an access control process that includes, namely: a) The login, that provides individual access to each operator; b) The control of the access to files, per owner, work group and list of
users, with the required detail level. 2. Safety copies (data backup) of the different systems are made on a daily
basis and the system is connected to an UPS that enables making the above-mentioned back-up and maintenance of the vital operations, in case of an energy failure.
3. Each employee has the duty to, at all times, keep the IT access codes
secret. 4. There is a segregation of functions in the IT areas, namely between the
Departments or Divisions in charge of development, IT services, infra-structures and communications systems and the User Areas, being the first forbidden to register and authorize transactions and their activities are subject to a planning and control process.
5. Within the IT areas, the programming of applications, programming of
systems, production and tests, master files and data control and the development and maintenance quality control are carried out by separate departments.
6. 16 The Bank assures, on a permanent basis, the efficient functioning of the
IT that is classified as an indispensable requisite for the acceptance of a registration as a financial intermediary.
12. Human Resources
1. The Bank maintains a permanently updated list of individuals who exercise functions within the scope of the financial intermediation activities, regardless of the type of work contract or the function exercised. 17
2. The list mentioned in the previous number indicates the individuals who are
empowered before third parties to represent the Bank or to exercise determined function that requires a specific professional capacity.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
16/45
3. The above-mentioned list does not mention the individuals that exercise functions in agencies nor those working in call centres, exception made to those working in agencies specialized in financial instruments investments.
4. The updating mentioned in the previous nr. 1 is made through a written
communication made, within a period that may not exceed 7 working days commencing on the date the alteration occurs (namely, commencement, replacement, alteration or cessation of functions), by the Head of the unit where the alteration took place to the Company’s Secretary Office.
5. The Bank adopts a coherent human resources management complying with all
legal and regulatory requirements that need to be observed by the Financial Institutions in all matters connected with financial intermediation.
13. Conflicts of Interests and execution of Personal Transactions/Relevant Individuals
1. The Bank adopts, in writing, a policy of conflict of interests adequate to its size, organization, nature and to the complexity of the activities it pursues, 18 comprising, in particular, above any other applicable legal requirements, the provisos of the Securities Code, of this SO and of the document denominated “Policy for Internal Conflicts of Interests – Millennium BCP19.
2.20 The principles and duties relating to conflicts of interest and the making of
personal transactions are to be applied by the following individuals, hereinafter referred to as Relevant Individuals:
a) The individuals mentioned in article 1(2); b) The individuals that effectively run the activity of tied agent, their
employees or those of entities sub-hired by the latter, involved in the exercise or supervision of financial intermediation activities or of essential operational functions thereto related.
321. The Bank:
a) Must organize itself in a way that enables it to identity possible conflicts of interest and act in a manner so as to avoid or reduce as much as possible their occurrence;
b) In a conflict of interests arises, it must act in a manner able to provide its customers with a transparent and fair treatment;
c) The Bank puts the Customers first, both in relation to their own interests, those of companies controlled by it, those of individuals
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
17/45
members of its corporate bodies, those of the tied agent and those of the employees of the Bank and of the tied agent;
d) Whenever the Bank carries out operations to comply with orders received from customers, it must render the financial instruments available to the customers at the same price it acquired them;
e) It must structure its activities and provide its Employees with the necessary means, in strict observance with the legal requirements applicable to activities that are particularly subject to conflicts of interest, as the making of investment recommendations mentioned by articles 12º-A to 12-D and 309-D of the Securities Code.
4.22 Regarding Relevant Persons, the Bank adopts procedures aimed to prevent
either of them from executing personal transactions or advising or asking someone to trade in financial instruments when:
a) It violates the rulings of the Securities Code for privileged
information; b) It involves the misuse or improper disclosure of that confidential
information; c) It violates any other duty of the Bank as financial intermediary,
defined in the SC. 5.23 Personal transaction means an transaction in financial instruments carried
out by any one of the Relevant Persons, or on their behalf, when:
a) That relevant person is acting outside the scope of the activities he/she carries out in that capacity; or
b) The transaction is executed on behalf of: i) Of the Relevant Person; ii) Of a person or entity in one of the following relations with
the Relevant Person: a) The spouse or a partner in a civil union; children in his/her care; other relatives that have lived with him/her for more than one year; b) Any entity, directly or indirectly, controlled by the relevant person; created in his/her benefit or managed by him/her.
iii) A company where the Relevant Person holds, directly or
indirectly, at least 20% of the voting rights or share capital; iv) A company in a control or group relationship with the
Relevant Person; or v) A person whose relationship with the relevant person is such
that the relevant person has a direct or indirect material interest in the outcome of the trade, other than a fee or commission for the execution of the trade.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
18/45
6. In order to comply with the applicable legal duties:
a) Relevant Persons must be informed of restrictions and procedures regarding personal transactions;
b) The Bank must be immediately informed of all personal trades made, by means of a notice sent to the Company Secretary's Office;
c) The Bank must keep the records of all personal transactions, including the indication of any authorization or prohibition regarding them.
14. Inside information / Trade on own account
1. Under the terms of the law and without damaging the possibility of deferring it, as regulated in art. 248-A of the Securities Code, the Bank shall immediately disclose: 24 a) All information regarding it or the securities issued by it that, being
precise, was not made public and could, if disclosed, sensibly influence the price of said securities or of underlying instruments or related derivatives;
b) Any changes to the information disclosed as per the previous sub-paragraph, using the same means of communication for that purpose.
2. Inside information covers a set of circumstances which exists or may
reasonably be expected to come into existence or an event which has occurred or may reasonably be expected to do so, regardless of its degree of materialisation, which a reasonable investor would be likely to entirely or partially use, should he know the same, as a basis for his/her investment decisions, since it would be likely to have a significant effect on the prices of securities or financial instruments.
3. Without prejudice to eventual criminal responsibility, any person or entity
in possession of information with the features mentioned in nr. 1 and 2 cannot, in any way, disclose it beyond the normal scope of his/her/its functions or use it in any way prior to being made public.
4. The Company Secretary will be responsible for keeping and updating the list
of Officers and Employees with access, regularly or occasionally, to privileged information, informing those concerned in writing of their inclusion in the list and of the legal consequences resulting from the disclosure or misuse of such information.
5. The Bank's Officers, as well as the people closely related to them, shall
inform the CMVM of all transactions made on their own behalf, on that of third parties, or by third parties on the Officers' own behalf, regarding
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
19/45
shares of the Bank or related financial instruments, as per the Securities Code and the CMVM Regulation 5/2008.25
6. For purposes of this Service Order, Officers are, besides the members of the
EBD and of the bank's supervision body, the persons responsible that, under the terms to be defined by the EBD, though they are not members of those corporate bodies, have regular access to privileged information and take part in the decision-making process regarding the Bank's management and business strategy.
7. For purposes of nr. 5 of this Article, people closely related to Officers are:
a) The spouse or a partner in a civil union, children in his/her care and other relatives that have lived with him/her for more than one year;
b) Any entity, directly or indirectly, controlled by the relevant person; created in his/her benefit or managed by him/her.
15. Officers' transactions in Closed Periods26
1. By resolution of the EBD, it is forbidden for Officers, who controlled or significantly influenced the underlying process, to trade on securities or other financial instruments during the following closed periods:
a) 30 calendar days prior to the disclosure of annual earnings and 15
calendar days prior to the disclosure of half-year or quarterly earnings of the Bank or of the Group, regarding instruments issued by any Group company;
b) In the period of time between the date of the decision and/or resolution made by the EBD and the date on which such information is made public, for instruments issued by any other entity (not part of the Group).
2. The prohibitions to Officers' transactions described above shall be in effect
without prejudice to the application of other restrictions to trading on securities or other financial instruments resulting from the law or from a court ruling.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
20/45
III – Market Defence and Information for Investors 16. Avoiding Excessive Intermediation
The Bank and its Officers and Employees shall abstain from encouraging the Customers to trade repetitively on financial instruments or from executing them on their behalf, whenever such transactions are solely aimed to charge fees, to grant loans for their execution or have any other goal that does not serve the Customer's interest.27
17. Market Defence
1. The Bank and its Officers and Employees must behave with the utmost business integrity, abstaining from trading or undertaking any actions that may jeopardise the good functioning, transparency and credibility of the market.28
2. The following actions may jeopardise the good functioning, transparency
and credibility of the market:
a) Trading operations whose sale and purchase is carried out within the same portfolio;
b) Apparent transfer, simulated or artificial, of financial instruments between different portfolios.
c) The execution of orders aimed to deceive or significantly limit the effects of an auction, pro rata allotment or another manner of attributing financial instruments;
d) Carrying out market making activities that are not previously reported to CMVM or stabilisation operations that are not made meeting legal requirements.
3. The Bank shall also carefully and diligently examine orders and transactions,
particularly when the same are likely to lead to the following situations:
a) Execution of orders to trade or transactions undertaken by persons with a significant buying or selling position in a financial instrument or that represent a significant proportion of the daily volume of transactions in the relevant financial instrument and which, as result thereof, are likely to lead to significant changes in the price of the financial instrument or related derivative or underlying asset;
b) Execution of orders to trade or transactions undertaken concentrated within a short time span in the trading session which are likely to lead to significant changes in the price of the financial instrument or related derivative or underlying asset and which are subsequently reversed;
c) Execution of orders to trade or transactions undertaken at or around a sensitive time when reference prices, settlement prices or other prices
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
21/45
calculated at times determinant for valuation are calculated and which are likely have an effect on such prices and valuations;
d) Execution of orders to trade which alter the normal characteristics of the order book for a certain financial instrument and which are cancelled before they are executed;
e) Execution of orders to trade or transactions undertaken preceded or followed by dissemination of false, incomplete, exaggerated, biased or misleading information by the economic beneficiaries of the transactions or persons linked to them;
f) Execution of orders to trade or transactions undertaken preceded or followed by the production or dissemination of research or investment recommendations containing false, incomplete, exaggerated, biased or misleading information, or information demonstrably influenced by material interest when the persons that have given such orders or undertaken such transactions, or any persons linked to them, have participated in the production or dissemination of such research or investment recommendations;
18. Information for investors
1. Whether so requested or as regularly provided, the Bank must provide in
writing, regarding the services it provides, all the information necessary for the investor to make an informed and well grounded decision, including information regarding: 29
a) The Bank and the services it provides; b) The nature of non-qualified investor, qualified investor or eligible
counterparty of the customer, its right to request a different categorisation and about any limitations to the level of client protection that it would entail;
c) The origin and general nature of any interest of the financial intermediary or the people undertaking business on its behalf, where the organisational arrangements made to manage conflicts of interest and trading on own account are not sufficient to ensure, with reasonable confidence, that risks of damage to client interests will be prevented;
d) Financial instruments and proposed investment strategies; e) Special risks involved in the transactions to be executed; f) The Guidelines for Executing Customers' Orders, as per the document
mentioned in the annexes. g) The existence or not of any guarantee fund or equivalent protections
that covers the services provided; h) The cost of the service to provide under the pricing in effect, as per
the document mentioned in the annexes. 2. The extent and depth of the information provided must be proportional to
lack of knowledge and experience of the Customer (the lesser the latter's knowledge, the more in-depth the information must be).
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
22/45
3. The fact that the data are inserted in the provision of advice, given in any
capacity, or in a promotional or advertising message does not release the Bank from being obliged to comply with the requirements and regime applicable to general information.
4. The information listed from art. 312-A to 312-G of the SC, regarding non-
qualified investors, may be provided by means of a website, as long as it complies with all the requisites of art. 34 (2) of this document.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
23/45
IV – Customers and their orders 19. Operations:
1. The Bank, namely through this document, the regulations for handling orders and other significant internal regulations, organises its financial intermediation activities in accordance with the law and the best practices, so as to ensure that the Customers' interests are professionally satisfied first and foremost, in all the services it provides.
2. Specifically regarding Customers, the Bank:
a) Previously systematically classifies customers (Non-Professional Investor/NP; Company Professional Investor/CP; Private Professional Investor/PP; Eligible Counterparty/EC), according to their nature, for trading financial instruments, under the terms of art. 317 and following of the Securities Code and of RP 0122, of 18 February 2009;
b) Enforces compliance with the requisites in the RP 0122 prior to receiving and processing the orders for financial instruments;
c) Has an organic and functional system in place for receiving, registering, controlling, forwarding/processing orders for securities and other financial instruments, as per RP 0037, of 22 January 2009;
d) Acknowledges the importance of the Customers' contributions, namely Non-Professional Investors, for the continuous improvement of the financial intermediation activities provided by the Bank, having different channels, permanently available, destined to quickly, efficiently and transparently receiving their claims: 30
Branches/Commercial Network; Phone, Internet/ Direct Banking Department (RG 0002, 20-4-
2009); Client Ombudsman (RP.01/010, 17- 05- 2004).
e) Ensures, regarding claims from Non-Professional Investors, that:
i) The reception and handling of the claim is made by an employee other that is the author of the act that lead to the claim, without prejudice to the duty of the unit appraising the claim to hear that employee;31
ii) Disposes of a system of specific procedures organized for the adequate appraisal of the claims and respective answer within the due maximum term;
iii) Keeps, for five years, the record of all claims received with
the mentions required by nr. 2 of article 305-E of the Securities Code.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
24/45
20. Assessment of the Operation (Appropriateness) 32 1. - The Bank will request the Client to purvey all the information regarding
his/her/its knowledge and experience regarding the type of financial instrument or service in question, enabling it to assess if the Client understands the risks involved.
2. If the Bank deems that the operation that the customer wishes to make is
not adequate for it, the Bank will inform the customer in writing, as regulated in RP 0122.
3. If the client does not provide the information or if the information is
insufficient, the Bank shall warn the client in writing that therefore it cannot assess the adequacy of the operation.
21. Exclusion of the assessment of the transaction (non-complex financial instruments) 33 The provisos of the previous article do not apply to the provision of services exclusively of reception and transmission or execution of the client's orders, even if ancillary services are provided, as long as, in addition:
a) The object of the transaction is i) shares admitted to trading on a regulated market or in an equivalent market; ii) bonds (excluding those that embed a derivative); iii) undertakings for collective investment in transferable securities (UCITS); iv) money-market instruments or v) other non-complex financial instruments.
b) The service is provided at the initiative of the client; c) The client was warned in writing, even if in a standardized manner, that
while rendering such service the Bank is not obliged to determine the adequacy of the operation in question to the client's features; and
d) The Bank complies with the duties relating to conflicts of interests established by law.
22. Contents of the required information34
1. The information to be obtained by the Bank regarding the Client's knowledge and experience must comprise:
a) The types of services, transactions and financial instruments with which the client is familiar;
b) The type, duration, volume and frequency of the transactions in financial instruments made by the client;
c) The education level and current or former occupation of the client. 2. The information referred above regards the type of investor client, the
nature and scope of the service to provide and the type of financial
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
25/45
instrument or transaction expected, including complexity and inherent risks.
3. The information regarding the client's financial standing includes,
whenever relevant, the source and amount of the regular income, its assets and regular liabilities.
4. The information regarding the investment objectives of the client shall
include, where relevant, information on the length of time for which the client wishes to hold the investment, his preferences regarding risk taking and the purposes of the investment.
23. Rendering information 35
1. The Bank does not incite the client to not present the data listed in the previous article.
2. The Bank may base its appraisal on the information provided by the client,
except if it has proof or reason to believe that the information is not up-to-date, untrue or incomplete.
3. A Bank that receives from another Financial Intermediary instructions to
provide investment services on behalf of a client of the latter may base its decisions on: a) The information regarding the client provided by the Financial
Intermediary that hired it; b) The recommendations regarding the service or transaction provided to
the Client by another Financial Intermediary; 4. A Bank that sends instructions to another financial intermediary must
ensure that the information sent regarding the client is sufficient and true and that the recommendations or advices regarding the service or transaction rendered to the client are adequate.
24. Receipt of orders
1. As soon as it receives an order for a transaction on financial instruments, the Bank: 36 a) Verifies if the order is given by a legitimate entity b) Adopts procedures that enable it to define, beyond doubt, the
moment when the order is received.37
2. In general, and without prejudice to the provisos established in art. 26 below, the Bank considers that, for the majority of financial instruments, may issue legitimate orders the entity that objectively shows the Bank that
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
26/45
it is able to, until the end of the trading session, obtain the securities it wishes to sell.38
25. Acceptance and refusal
1. The Bank must refuse an order when: 39
a) The originator does not provide all the data required for its proper execution;
b) It is evident that the transaction goes against the interests of the originator, except when the latter confirms its order in writing;
c) The financial intermediary is not able to provide the originator with all the data required to execute the order;
d) The originator does not provide the guarantee required by law for executing the transaction;
e) The originator is not allowed to accept a public offer. 2. The Bank may refuse an order when the originator:
a) Does not prove that it has the financial instruments to be sold available; b) Does not arrange the blockage of the financial instruments to be sold,
when so required by the financial intermediary; c) Does not provide the amount required for settling the transaction; d) Does not confirm the order in writing when required to do so.
3. Except for the situations described in the previous paragraphs, the Bank
cannot refuse an order issued by someone with whom it has a prior customer relation.
4. The Bank must immediately inform the originator when it refuses an order. 5. Regarding orders given by clients to which the Bank provides the services of
registry and custody of financial instruments, that when executed would worsen a negative balance, whether financial or of financial instruments, the Bank may refuse them based on insufficient balance.
6. Regarding orders given by clients to whom the Bank provides the services of registry and custody of financial instruments, that when executed would worsen a negative balance, whether financial or of financial instruments, the Bank may refuse them based on insufficient balance.
26. Especially Forbidden Transactions
1. Without prejudice to other transactions, the Bank shall refuse:
a) Overdraft operations on certain Financial Institutions40, mentioned in Instruction CMVM 2/2008, of 22 September 2008, therefore the Bank will
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
27/45
not accept or execute orders for the sale in markets managed by Euronext Lisbon and by the OPEX of:
i. Shares issued by said Financial Institutions and ii. Other securities that grant rights to purchase, subscribe or
convert them, when the originator or the market operator acting on its own behalf does not guarantee that it has those securities at the moment of the transmission or execution of the order (short selling);
b) The purchase and sale of securities for purposes of latter trading those securities again to execute orders previously received from clients41.
2. The prohibition referred in paragraph a) of the previous number does not
include orders executed by market operators that act as market or liquidity creators for the said securities.42
27. Form and validity 43
1. Orders may be issued verbally or in writing. 2. Orders issued verbally must be recorded in writing by the Bank, as receiver,
and, if given in person, must be signed by the originator. 3. The Bank may replace the written recording of the orders by the map of
offers entered in the trading system, as long as the Bank ensures that the data listed in article 7 of the EC Regulations nr. 1287/2006, of the Commission, 10 August, are recorded.
4. The orders are valid for the term defined by the originator, and cannot, by
law, surpass one year at most, counting as of the day after the Bank receives the order except if a smaller term applies in accordance with nr. 5 below.
5. Orders are deemed valid:
i) Until the end of the day they are issued, if the originator does not define another term; ii) Until their term, if the originator defines the validity term, which cannot surpass one (1) month, without prejudice to the possibility of accepting a longer term that may be exceptionally accepted by the Bank if it results without a doubt from a relevant specific statement.
6. The Bank informs the clients of the validity terms it applies, which may vary
based on the execution venues where the order may be executed or on the nature of the financial instruments.
7. When so requested by the Client, the Bank must inform it of the order's status.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
28/45
28. Handling Clients' orders:44
1. When the Bank cannot execute an Order, it must send it to a financial
intermediary that can execute it. 2. The transmission must be immediate and respect the priority of the
reception, except when otherwise instructed by the originator. 3. The Bank ensures the possibility of reconstructing the internal circuit
followed by the orders until they are transmitted or executed. 4. While executing orders, the Bank:
a) Shall register and execute them sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of the client require otherwise;
b) Shall immediately inform non-qualified investors of any specific difficulty in executing their orders.
5. Except as otherwise instructed by the originator, orders with a ceiling or
more favourable price, for a specific volume, for shares admitted to trading on a regulated market, that cannot be immediately executed, must be disclosed as per article 30 of the EC Regulations 1287/2006, of the Commission, of 10 August.
6. CMVM may waive compliance with the duty to disclose defined in the
previous paragraph for orders with a volume higher than the regular market volume, as provided for in article 20 of the EC Regulations nr. 1287/2006, of the Commission, 10 August.
29. Grouping orders and allocating transactions45
1. If the Bank wishes to group, in a single order, the orders issued by several
clients or decisions to deal on own account, the Bank must: a) Ensure that the aggregation, as a whole, does not damage the interests
of any originator; b) Previously inform each client whose order is to be aggregated that the
effect of aggregation may work to its disadvantage in relation to a particular order;
2. The originator may oppose the aggregation of its order. 3. If the Bank adopts a policy of allocating clients' orders and decisions to deal
on own account that result in fair allocation, the Bank must state: a) How the volume and price of the orders and decisions to deal on own
account determine the allocation;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
29/45
b) The procedures aimed to prevent the reallocation, in a manner that is prejudicial to clients, of decisions to deal on own account executed together with clients' orders.
4. The policy for allocating orders is applicable even if the aggregated order is
only partially executed. 30. Allocation of transactions executed on own account46
1. The Bank, if it aggregated transactions for own account with one or more client orders, cannot allocate the related trades in a way that is detrimental to a client.
2. Without prejudice to nr. 3 below, whenever the Bank aggregates a client
order with a transaction for own account and the aggregated order is partially executed, it must allocate the related trades to the client in priority to the Bank.
3. Then Bank may allocate a transaction proportionally as long as it can
evidence that, without that combination, it could not have executed the client's order or it could not have executed it to such advantage.
31. Withdrawal and alterations 47
1. Orders may be withdrawn or altered as long as the withdrawal or alteration is received by the entity that is to execute them prior to their execution.
2. The alteration of an order to be executed in regulated markets or in
multilateral trading facilities represents a new order; 32. Best execution 48
1. Orders must be executed in the best conditions and in the moment instructed by the originator.
2. In the absence of specific instructions from the originator, the Bank must
take all reasonable steps to obtain, when executing orders, the best possible result for its clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.
3. The provisions of the previous number comprise the execution of decisions
to deal on account of clients.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
30/45
4. The Bank adopts a policy for executing orders that:
a) Allows it to obtain the best possible result and includes, at least, the execution venues that enable obtaining such results repeatedly;
b) Includes information regarding the different execution venues for each type of financial instrument and significant factors for choosing them.
5. The Bank informs the customer of its execution policy, part of the
document named ""Handling Orders and Policy for Executing Orders", and cannot start providing services before the client sends its consent to the Bank in writing.
6. The client must be informed of all relevant changes to the policy for
executing orders. 7. The execution of orders outside regulated markets or multilateral trading
facilities shall depend of the client's specific consent, which can be given by a general agreement or for each transaction.
8. The Bank shall present evidence, when so requested by the client, that its
orders were executed in accordance with the execution policy disclosed. 9. The Bank assesses its execution policy, namely regarding the negotiation
structures provided: a) On a yearly basis, to identify and, if needed be, correct any
deficiencies; b) Where a material change occurs that might affect its ability to continue
to get the best possible result consistently, using the execution venues included in its execution policy.
10. Orders can be partially executed, unless otherwise indicated by the
originator. 33. Best execution criteria49
1. For purposes of determining the relative importance of the items listed in
nr. 2 of the previous article, the Bank must consider the features of: a) The client, including his capacity as non-qualified investor or qualified
investor. b) The Client's order; c) The financial instruments that are the subject of that order; d) The execution venues to which that order can be directed.
2. Execution venue means the organized trading forms regulated by article 198
of the Securities Code or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
31/45
3. When the Bank executes an order on behalf of a non-qualified investor, the
best possible result shall be determined in terms of the total consideration, representing the price of the financial instrument and the costs related to execution, which shall include all expenses incurred by the client which are directly related to the execution of the order, including execution venue fees, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order.
4. Where there is more than one competing venue to execute an order, in
order to assess best execution, the Bank must consider the commissions it charges to the client and the other costs for executing the order on each of the execution venues.
5. The Bank cannot structure or charge its commissions in such a way as to
discriminate unfairly between execution venues.
34. Information for non-qualified investors regarding the execution policy50
1. The Bank shall provide its clients, non-qualified investors, with the following details on its execution policy in good time prior to the provision of the service: a) An account of the relative importance the Bank assigns, in accordance
with the criteria specified in nr.1 of the previous article, to the factors referred to in Article 32(2), or the process by which the Bank determines the relative importance of those factors;
b) A list of trading venues, as defined in nr. 2 of the previous article, that enable the Bank to obtain on a consistent basis the best possible result for executing the client orders;
c) A clear and prominent warning that any specific instructions from a client may prevent the Bank from obtaining the best possible result, in accordance with its execution policy, in respect of the elements covered by those instructions.
2. The information listed in the previous number may be provided by means of a
website if the investor clearly consented to it and the following conditions are satisfied:51 a) Rendering the information in such medium is adequate to the context of
the relation, present or future, between the Bank and the Investor, b) The client has been notified electronically of the address of the
website, and the place on the website where the information may be accessed;
c) The information must be accessible continuously for such period of time as the client may reasonably need to inspect it.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
32/45
35. Transmission for best execution52 1. While rendering portfolio management or order reception and transmission
services, the Bank shall take all reasonable steps to obtain the best possible result for their clients taking into account the factors referred to in article 32(2) and the criteria referred in article 33.
2. The duty established above does not apply when the Bank follows the
specific instructions given by the Client. 3. To ensure compliance of the duty enshrined in nr. 1, the Bank must:
a) Adopt a policy that identifies, for each type of financial instruments, the financial intermediaries to whom the orders are sent, which must have the means to meet those obligations;
b) Inform its clients of the policy adopted under the terms of the previous paragraph
c) Evaluate the effectiveness of the policy adopted under a) and, in particular, the quality of the order execution performed by the financial intermediaries therein identified, altering such policy if a deficiency is found that could undermine the performance of the duty set forth under nr. 1.
4. The Bank should assess the policy described in a) of the previous number
every year and whenever there is any material change that may affect the financial intermediary's ability to obtain the best execution possible.
36. Responsibility towards originators53 1. The Bank is responsible before its originators:
a) For the delivery of financial instruments purchased and for paying the price of financial instruments sold;
b) For the authenticity, validity and accuracy of financial instruments purchased;
c) For the absence of defects or legal situations that encumber the financial instruments acquired.
2. Any contractual provision contrary to the preceding number shall be null
and void, when the order is to be executed on a regulated market or MTF. 37. Duty to inform while executing orders54
1. When it receives an order from a client, the Bank must: a) Inform the client in writing on its execution;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
33/45
b) For Non-Professional Investors, send a note evidencing the execution of the order as soon as possible and within the following deadlines, at the latest:
i. Until the end of the first business day after executing the order;
ii. Until the end of the first business day after the Bank receives confirmation from a third party of the order's execution;
2. For orders of Non-Professional Investors, the execution note includes the
specifications due under the terms of article 323 (5) of the Securities Code. 38. Safeguarding the client's assets
1. In all its actions, as well as in the accounting and transaction records, the
Bank should ensure a clear distinction between its own assets and the assets of each of the Customers. 55
2. The Bank cannot, in its own interests or in the interests of others, use
instruments of its clients or exercise their rights, except as otherwise agreed with the clients, in accordance with article 306-B of the Securities Code.
3. For purposes of the previous numbers, the Bank must:
a) Keep such records and accounts as are necessary to enable it to, at any time and without delay, distinguish assets held for one client from assets held for any other client, and from its own assets;
b) Maintain its records and accounts in a way that ensures their accuracy, and in particular their correspondence to the financial instruments and funds held for clients;
c) Reconcile, on a regular basis, the records of the clients' internal accounts with those of accounts opened in third parties for holding or registering those assets;
d) Take the necessary steps to ensure that any client's financial instruments deposited or registered with a third party, are identifiable separately from the financial instruments belonging to the financial intermediary, by means of accounts held by the clients or by the financial intermediary stating that they are held on behalf of the clients or other equivalent measures that achieve the same level of protection;
e) Take the necessary steps to ensure that the client's money is deposited in one or more accounts that are identifiable separately from the accounts where money belonging to the financial intermediary is deposited;
f) Adopt adequate organisational arrangements to minimise the risk of the loss or diminution of client assets, or of rights in connection with those assets, as a result of misuse of the assets, fraud, poor administration, inadequate record keeping or negligence.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
34/45
4. Whenever the Bank finds evidence of divergences as per c) of the previous
number, these must be verified and corrected as soon as possible. 5. If the divergences mentioned above continue to exist for more than one
month, the Bank must immediately inform CMVM. 6. The Bank shall inform CMVM immediately of any facts that may jeopardise
the security of the clients' assets or may generate risk for the other financial intermediaries or for the market.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
35/45
V - Financial Intermediation Agreements 39. Contracts with Non-qualified Investors
1. Financial Intermediation Agreements regarding the services regulated in article 290 (1) (a-d) and 291 (a and b) of the Securities Code entered into with non-qualified investors must be made in writing and only these can claim they are null as a result of non-conformity. 56
2. Financial intermediation agreements may be signed based on general
clauses. 3. Financial intermediation agreements entered into with non-qualified
investors must include: 57 a) The complete identification of the parties, address and phone numbers; b) Information that the financial intermediary is authorized for the
provision of financial intermediation, as well as the registration number in the supervision authority;
c) A general description of the services to render, as well as the identification of the financial instruments object of the services;
d) A description of the rights and obligations of the parties, especially those of legal nature, of how to comply with them, as well as contractual consequences of failure to comply by either party;
e) The law that governs the agreement; f) Information on the existence and functioning of the financial
intermediary's service for receiving claims from investors as well as the possibility of presenting claims to the supervision authority.
40. Investment advice58
1. Investment advice means the provision of personal recommendations to a client, as an effective or potential investor, either upon its request or at the initiative of the advisor, in respect of transactions relating to securities or other financial instruments;
2. For the purposes of previous paragraph, a personal recommendation is a
recommendation that is made to a person, in his capacity as an investor or potential investor, and presented as suitable for that person or based on a consideration of the circumstances of that person, for making an investment decision.
3. A recommendation is not a personal recommendation if it is issued
exclusively through distribution channels or to the public.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
36/45
41. Portfolio Management Agreement
1. Under the terms of the portfolio management agreement for individual financial instruments, the Bank, as a financial intermediary, pledges to: 59 a) Undertake all actions that may increase the value of the portfolio; b) Exercise the rights inherent to the financial instruments in the portfolio.
2. Even if such is not defined in the contract, the client may issue orders that
bind the manager in terms of transactions to be executed. 3. The provisions of the previous number do not apply to agreements that
guarantee a minimum profitability of the portfolio. 42. Assistance60
1. Contracts for technical, economic and financial assistance for a public offering comprise the provision of the services necessary for the set up, launch and execution of the offering.
2. The Bank, when responsible for assisting in a public offering, shall advise
the offeror on the terms of the offering, particularly as regards the timing and price, and ensure compliance with the legal and regulatory provisions, in particular about the quality of information disclosed.
43. Placement and Guarantee of Placement
1. Under the terms of the placement contract, the Bank pledges to undertake its best efforts toward the distribution of the securities object of the public offering, including receiving orders for subscription or purchase. 61
2. The placement contract may be awarded to a financial intermediary other than the one providing assistance services to the offering.
3. Under the terms of the placement contract, the Bank also pledges to purchase, partially or as a whole, for itself or for others, the securities that are not subscribed or purchased by the recipients of the offer.
44. Underwriting 62
1. According to the underwriting agreement, the Bank purchases the securities object of the public offering and pledges to place them on its own account under the terms and within the deadlines agreed with the issuer or seller.
2. The underwriter must transfer to the final buyers all rights pertaining to the securities created after the date of the underwriting.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
37/45
3. Underwriting does not affect the rights of preferential subscription or acquisition of securities and the underwriter must warn the holders to exercise them under the same terms as those that would apply if there were no underwriting.
45. Registry and Deposit63 The Bank may enter into contracts for the registry and deposit of securities,
explaining, under the law, the rules for exercising the inherent rights. 46. Acting as Counterparty and Conflicts of Interests 64
1. The Bank, being authorized to act on its own behalf, may enter into contracts as counterparty of the Client, as long as the latter authorizes or confirms such business in writing.
2. The authorization or confirmation mentioned in the previous number is not
demanded when the other party is a Qualified Investor or the operations must be executed in a regulated market through centralised execution venues.
3. The Bank should not:
a) Purchase for itself any financial instruments when there are Clients that requested them at the same price or at a higher price;
b) Sell financial instruments that it holds instead of the financial instruments the clients ordered it to sell for the same price or for less.
4. The operations performed against the previous paragraph shall have no
effects on the Customer if they are not ratified by it within eight days after being notified thereon by the Bank.
47. Transactions with derivative financial instruments65
1. The Bank should report to non-qualified investors daily on operations with derivative financial instruments, all the information regarding:
a) The creation, increase and replacement of guarantees; b) Adjustments to gains and losses; c) Settlements; d) Transfers of interests; e) Any other incidents occurring while the client has open interests
that may in any way affect those interests.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
38/45
2. Notwithstanding the preceding paragraph, when the client so requests, the Bank shall provide evidence of the interests held by it in derivative financial instruments.
3. The contract for receiving orders on derivative financial instruments is
subject to the provisions of nr. 1 (b) and (c) of the following article and must mention the provisions of article 49 (b) and (c), duly adapted.
4. When it provides the service referred in the previous number, the Bank must:
a) Permanently compute the relation between the value of the securities and that of the open interests;
b) Abide by the provisions of art. 49.
48. Loan Agreement for Investing in Financial Instruments66
1. Loan agreements made with non-qualified investors for investing in financial instruments must state at least:
a) Implicit interest rate and its method of calculation, including the index rate, the spread, the reference date of the index rate and the rounding rule, if applicable;
b) The terms under which the Bank may ask the client to strengthen the guarantees or to execute them;
c) Type and frequency of information to be provided by the Bank to the client that allows for an effective risk management;
d) The list of financial instruments for which it is possible to use the credit granted;
e) The credit limits; f) Stop loss clause and how it is applied, form and terms for the
communication between the Bank and the investor, in order to legally safeguard the interests at stake and to set in writing mechanisms to limit losses in the investor's assets, in case of a serious and sudden devaluation of the assets encumbered.
2. When the agreement described in nr. 1 allows the permanent change in the composition of financial instruments portfolio given as collateral, the Bank must manage the risk regularly depending on the financial instruments that may be purchased with the loan granted, namely permanently when trading in highly volatile financial instruments. 3. For the purposes of the previous number, risk management means the calculation of the value of the financial instruments portfolio that are pledged as collateral for the obligations arising from the loan agreement. 4. Whenever the information defined in nr. 1 a) is altered, the client must be immediately informed, as well as of the date after which such alteration is effective.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
39/45
49. Risk Control67 When the Bank grants loans for financial instruments or accepts orders with insufficient balance, it must apply adequate risk control mechanisms, namely:
a) Adoption of criteria for defining the requirements that the customers allowed to undertake these operations must meet;
b) Limits to be obeyed by those clients, in particular the minimum relation between the value of the portfolio and the amount of the balance shortfall;
c) Establish the possibility of, once exceeded the limit set forth in the preceding paragraph, the Bank not accepting orders for which customers do not have sufficient funds;
d) Procedures and deadlines for information to the investor within the scope of the management of guarantees;
e) Definition of a list of financial instruments for which it is possible to execute such transactions;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
40/45
VI - Sundry provisos 50. Sundry
1. The terms and expressions defined along this SO in the singular or plural may be applied when it suits the case, respectively, in the plural or singular, with a corresponding change of its meaning, without requiring any specific statement to that effect.
2. The titles are purely indicative and do not constitute part of the relevant clauses and should not be taken into account in their interpretation or integration.
3. When not specifically identified, references to numbers or articles without mentioning its source refers to the provisos of the SO.
4. The use of acronyms or abbreviations (SC) instead of the Securities Code, DL instead of Decree Law, CMVM instead of Comissão de Mercado dos Valores Mobiliários, EBD instead of Executive Board of Directors, SO instead of Service Order, etc) replaces, where they are found in this document, the words that correspond to them, as they are used in the bank or legal jargon.
51. Transitory provisos
1. The Bank will issue, until 31 December 2010, the internal regulations referred in this SO that are not yet approved and disclosed.
2. The transitory period referred in the previous paragraph does not damage the immediate effectiveness of this Service Order as per nr. 2 of the following article.
52. Effectiveness and disclosure This Service Order:
1. Is approved on this date by the EBD. 2. Is effective immediately. 3. Revokes the SO 20010. 4. Is disclosed through the mediums used by the Bank for corporate
communication. 5. Is especially delivered (in a soft or hard copy) by the Company Secretary's
Office to the people listed in nr. 2 of Article 1, within 15 business days at most as of this date.
The Executive Board of Directors of Banco Comercial Português, S.A., by Resolution adopted on 16 March 2010.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
41/45
VII - Annexes 1. Examples of the legal sources for Financial Intermediation (referred by article 2 (1) of this SO)
a) The following in particular are the legal and regulatory sources:
• Securities code;
• Law 25/2008, of 5 June (establishing preventive and repressive measures to fight money laundering of illicit assets and terrorism financing)
• DL 211-A/2008, of 3 November;
• Regulation 2/2007 of CMVM – as altered by Regulation 3/2008 of CMVM (Pursuit of Financial Intermediation Activities);
• Regulation 5/2008 of CMVM (Disclosure Requirements)
• Regulation 1/2009 of CMVM (Information and Advertising on Complex Financial Products under the CMVM's Supervision);
• Instruction 2/2008 of CMVM (Short-Selling Transactions on Financial Institutions);
• Instruction 4/2008 of CMVM (Short-Selling Transactions on Financial Institutions);
• All other applicable legal rulings, Regulations and Instructions.
b) The following in particular are the internal regulatory sources:
• This Service Order;
• RG0016 – Audit Department;
• RG0036 – Credit Regulations for Sovereigns and Financial Institutions;
• SO 0023 – Competences of the Direct Banking Department for correcting errors that led to Claims;
• RP 0037 – Reception and handling of orders on Securities;
• RP 0122 – Prior Classification of Clients for the Transaction of Financial Instruments – MiFID;
• Rules of Procedure regulating the Powers and procedures for Advisory and Discretionary Management Services in Portugal, within the scope of the Private Banking Network, being drawn up;
• Code of Conduct;
• Compliance Manual;
• The applicable Product Manuals;
• The Bank's Policies for Trading in Financial Markets;
• MT9000 – Policy for Internal Conflicts of Interests (Chinese walls);
• MT0009 – Policy for Executing Orders;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
42/45
• Investors Classification Policy;
• Policy for managing Conflicts of Interest within the scope of Financial Research;
• Pricing;
• Internal Control System;
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
43/45
VIII - Notes
1 “The financial intermediary should have all the envisaged legal and regulatory policies and procedures permanently compiled and available for consultation by any person referred to in Article 304/5 Securities Code or for supervisory purposes” (article 13 of Regulation 2/2007 of CMVM – as altered by Regulation 3/2008 of CMVM (Pursuit of Financial Intermediation Activities). 2 Under the terms of article 304 (5) of the SC, “The principles and the duties referred to in the following articles are applicable to the directors of the financial intermediary and the persons that effectively direct the business of the financial intermediary or the tied agent and the employees of the financial intermediary, tied agent or outsourcing entities, involved in the pursuing or supervising of financial intermediation activities or the operational functions that are essential for the provision of continual services under the conditions of quality and efficiency.”. 3 In this SO, article 3 (1) is an adaptation of the proviso of the SC (art. 289.1) that defines Financial Intermediation Activities. 4 Cfr. http://www.cmvm.pt/cmvm, vide Financial Intermediaries registered at CMVM/Serviços Autorizados/ Banco Comercial Português, S.A. 5 The definition (already provided in the SO 20/010, now revoked) of the functional contents typical of financial intermediation made in article 4 of this SO, serves to meet the provisos of article 305 (1.b) of the SC, wherein it sets forth that the financial intermediaries are responsible for “Ensuring that the persons referred to in Article 304/5 are aware of the procedures to be followed for the proper discharge of their responsibilities”. 6 Transcript of articles 1 and 2 (1) of the SC. 7 Resulting from art. 314-D (1.a) and (2), and art. 1 and 2 (1) of the SC. 8 Transcript of art. 2 (1) of DL 211-A/2008, of 3 November. 9 Art. 2 (6) of DL 211-A/2008, of 3 November, clearly speaks of the ICAES (Structured savings products) as Complex Financial Products. 10 art. 6 (3) (b-g) of this SO are based on the contents of nr. 2 of the Introduction to Regulation 1/2009 of CMVM (Information and Advertising on Complex Financial Products under the CMVM's Supervision) 11 Under the terms of the SC, the Bank must provide the compliance control system “with adequate technical means and capacity” art. 305-A (3.b), ensure that the persons who are involved in the compliance control system "are not simultaneously involved in the providing services and activities that are controlled by them” art. 305-A (3.c), and that the method used for determining their remuneration “does not interfere with the former's objectivity.” art. 305-A (3.d). 12 Adapted transcript of article 305-A (2) of the SC. 13 Adapted transcript of article 305-B (1, 2 and 3) of the SC. 14 Adapted transcript of article 305-C (1) of the SC. 15 Cfr. Art. 13 of this SO.
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
44/45
16 Cfr. Section II of the Regulation 2/2007 of CMVM. 17 Nr. 1, 2 and 3 of this article correspond to the respective numbers of article 5 of Regulation 2/2007 of CMVM . 18 Nr. 1 of this Article is in accordance with art. 309-A (1) of the SC (Conflicts of interest policy). 19 The fact that the Bank has and discloses a Policy for Conflicts of Interest meets the provisos of art. 309-B and 309-C of the SC. 20 Nr. 1 is the adapted transcript of article 304 (5) of the SC. 21 Subparagraphs a) to d) correspond to the contents of art. 309 of the SC. 22 Corresponds to article 309-E (1) of the SC. 23 Corresponds to article 309-F of the SC. 24 Nr. 1 to 4 of this proviso are the adapted transcript of art. 248 of the SC. 25 Nr. 5, 6 and 7 of this proviso are the adapted transcript of part of art. 248-B of the SC. 26 Corresponds to the Resolution adopted by the EBD on 11 June 2008. 27 Transcript of article 310 (1 and 2) of the SC. 28 Corresponds to article 311 of the SC. 29 Adapted transcript of article 312 (1, 2, 3, 4 and 7) of the SC. 30 This provision includes, and does not preclude, the future issuance by the Bank of a separate document governing specifically the Claims Management Policy. 31 Adapted grouping of the contents of article 305-E (1 and 2).
32 Essentially a transcript of art. 314 of the SC; it enshrines the general principle that the financial intermediaries are responsible for assessing the appropriateness of the transaction the client wishes to undertake. 33 Essentially a transcript of article 314-D (1 and 2) of the SC. this provides an exception to the exclusion of the application of the general principle set forth in art. 314 of the SC, regarding orders that, while regarding any type of non-complex financial instruments, meet all the other requirements listed in art. 21 (b, c and d) of the SO. In these specific situations, the Bank is not responsible for assessing the appropriateness of the transaction the client wishes to undertake. 34 Essentially a transcript of article 314-B of the SC. 35 Essentially a transcript of article 314-C of the SC. 36 art. 24 (a to b) of the SO correspond to the contents of art. 325 of the SC. 37 Cfr. the Bank's “Policy for Executing Orders”. 38 art. 25 (1 to 4) of the SO correspond to the contents of art. 326 of the SC; art. 25 (5 and 6) correspond to the contents of art. 33 of the Regulation 2/2007 of CMVM. 39 As per the understanding of the excerpt of the Introduction to the Regulation 2/2008 of CMVM, of 22 September 2008. 40 Under the terms of nr. 1 and 3 of Instruction 2/2008 of CMVM , of 22 September 2008. The Financial Institutions mentioned in said Instruction are:
BAN
CO C
OM
ERCI
AL P
ORT
UG
UÊS
, S.
A, S
ocie
dade
Abe
rta,
com
se
de n
a Pr
aça
D.J
oão
I,
28,
Port
o, o
Cap
ital
Soc
ial
de 4
.694
.600
.000
Eur
os,
mat
ricu
lada
na
Con
serv
atór
ia d
o R
egis
to C
omer
cial
do
Por
to
sob
o
núm
ero
úni
co
de
mat
rícu
la
e d
e i
dent
ific
ação
fis
cal 5
01 5
25 8
82
45/45
BCP;BES;BANCO BPI;BANIF, SGPS;FINIBANCO-HOLDING SGPS; BANCO SANTANDER; BANCO POPULAR ESPANOL; ESPÌRITO SANTO FINANCIAL GROUP 41 Replicates art. 9 (3) (b) of the Bank's Code of Conduct (in the version dated of 21 February 2004 - OS20/002). 42 Adapted transcript of the contents of nr. 2 of Instruction 2/2008 of CMVM , of 22 September 2008. 43 art. 27 (1 to 6) of the SO correspond to the adapted and united transcript of art. 327 and 327-A of the SC; art. 27 (7) is a transcript of art. 323 (3) of the SC. 44 Corresponds to article 328 of the SC. 45 Corresponds to article 328-A of the SC. 46 Corresponds to article 328-B of the SC. 47 Corresponds to article 329 of the SC. 48 Corresponds to article 330 of the SC. 49 Corresponds to article 331 of the SC. 50 Corresponds to article 332 of the SC. 51 art. 34 (2) of the SO applies the regime deriving from art. 332 (2) of the SC, which refers to art. 312 (7) of the SC. 52 Corresponds to article 333 of the SC. 53 Corresponds to article 334 of the SC. 54 Corresponds to article 323 of the SC. 55 Corresponds to article 306 (1, 3, 5, 8, 9 and 10) of the SC. 56 Nr. 1 and 2 correspond to article 321 of the SC. 57 Nr. 3 corresponds to article 321-A (1) of the SC. 58 Corresponds to article 294 (1, 2 and 3) of the SC. 59 Corresponds to the grouped contents of articles 335 and 336 of the SC. 60 Corresponds to article 337 (1 and 3) of the SC. 61 art. 43 (1 and 2) of the SO correspond to the contents of art. 338 of the SC; art. 43 (3) corresponds to the contents of art. 340 of the SC. 62 Corresponds to article 339 of the SC. 63 Corresponds to article 343 of the SC. 64 Corresponds to articles 346 and 347 of the SC. 65 Corresponds to article 14 of the Regulation 2/2007 of CMVM. 66 Corresponds to article 32 of the Regulation 2/2007 of CMVM. 67 Corresponds to article 34 of the Regulation 2/2007 of CMVM.