Provision of Information

All information provided to you throughout your business relationship with an investment entity should be ‘fair, clear and not misleading’. This principle refers both to the content of the information and to the way it is presented to you.

Your firm should provide you with the relevant information in good time before you invest so that you can make an informed decisions. Types of information you will receive before investing include:

1. Marketing Communication

Marketing communications: Whether or not you are a client of a firm, you may receive advertisements and other marketing communications issued by an investment entity. All advertisements and marketing communications have to be presented in such a way that you can identify them as being of a promotional nature.

2. Client Agreement

If you are a new retail client that a firm has taken on for the provision of investment services, you will be provided with a copy of the client agreement which will contain your and the firm’s essential rights and obligations. In this document there will be included:

• Information about the firm: A firm must give you general information about itself, including who regulates it and the services it offers to clients, to help you understand the nature of the services on offer and the risks involved.
• Information on investment management: Where you have asked a firm to manage investments on your behalf, you should expect to receive information including a description of the management objectives and the related level of risk, what types of products or transactions may be involved in your portfolio and information about the valuation method and the frequency of valuations of your investments.
• Information about financial products: You will receive information explaining the nature, risks and costs of financial products. Such information includes, for example, a description of the products’ risks and whether prices/values may fluctuate. The amount of information will depend on the type of product, its complexity and risk profile.
• Information about costs and charges: You will receive information about the direct and indirect costs and charges of a service or product, including any commission charged or paid. This should clearly show you the total costs to be incurred. Sometimes, however, the precise amount of the total costs is not available at the time when the information is communicated to you. In such cases, you should instead receive sufficient information to see how the costs are going to be calculated, so that you can verify the total price once it is available.

Question: Will I be kept updated about the performance of my investment portfolio?

The MFSA’s rules state that at least on a quarterly basis, an investment firm that holds instruments or money on behalf of investors is required to send, to each of its clients (the beneficial owners of investments), a statement of those investments and money. This statement would usually be sent by post or electronically via email. The entity may also provide beneficial owners with periodic statements but that’s up to you to request such additional service and you have to check whether additional fees will be charged by the entity for such additional reporting. Many entities nowadays provide their clients with electronic access to their accounts as well so they can see how their portfolio is performing online.