MiFid

Introduction / General

What is MiFID?

MiFID is a commonly used abbreviation for the «Markets in Financial Instruments Directive». This Directive is one of a number of Directives issued by the European Union to harmonise the laws and regulations in a single market for investment and financial services across all countries in the European Economic Area, commonly known as the «EEA». The EEA is comprised of the member countries of the European Union plus Iceland, Norway and Lichtenstein.

This Directive has been incorporated into Greek Law with Law 3606/2007 and comes into effect on 1st November 2007.

How do clients benefit from MiFID?

MiFID has as its objective to provide additional protection to investors and consumers of investment services. Many of the issues covered by MiFID simply reinforce the best practice policy which should be applied by an investment services provider. This legislation is in fact aligned with the existing HSBC Group policy of providing a high quality service to its clients.

MiFID incorporates provisions concerning the way in which:

• We are organised and audited
• Transactions are executed between us and our clients
• Investment services are offered and undertaken on behalf of clients

MiFID requirements impact our clients in the following areas:

• Client categorisation
• Best Execution and Order Handling
• Evaluation of Suitability and Appropriateness of transactions depending on the nature of the investment
• Disclosure requirements concerning Inducements
• Disclosure of the our Conflicts of Interest Policy

Will there be many changes that affect me due to MiFID?

It is unlikely that you will see a lot of changes in the way you communicate and transact business with our Bank. Many of the requirements specified in MiFID are already incorporated in our existing Policies and Procedures that aim to provide a high standard of service to customers.

Client Categorisation

Under MiFID clients can be categorised in one of three categories:

• Retail Clients - typically private investors or small corporate investors who benefit from the highest level of investor protection.
• Professional Clients - typically investment firms, authorised institutional investors and those private investors who have the requisite knowledge, experience and who also fulfil the necessary financial criteria. This class of investor enjoys a more limited level of protection.
• Eligible Counterparties - typically governmental bodies and authorised institutional investors who do not benefit from the investor protection regulations.

Can I request a change of categorisation in order to get higher level of protection?

Yes, you have the right to request a change in categorisation so as to enjoy a higher level of protection.

Can I switch from the Retail category to the Professional category?

Yes, provided that you are in a position to meet certain criteria specified by MiFID in order to become a Professional client. It should be noted that such a change will result in the loss of the high level of protection provided by MiFID to Retail clients.

How do I request a change of Categorisation?

You must contact your account Relationship Manager who will provide you with all the necessary information. The Bank will examine your written request and will respond in writing advising you of its decision.

Best Execution

What is Best Execution and what does it mean to me?

With the introduction of MiFID, we are required to provide our clients with Best Execution.

When you give us an instruction to buy or sell a financial instrument for you and we act upon the instruction, this is the execution of your order.

The Best Execution Policy and Procedures implemented by HSBC Bank plc include:

• The steps followed to ensure the best possible result in the execution of client orders as well as those relevant factors that must be taken into account.
• The regulated markets in which the client transactions are executed.

Is any action on my part necessary to ensure Best Execution of my orders?

In the MiFID information pack which was mailed to you, we have included a summary of our Best Execution policy. Unless you notify us to the contrary we will assume that you have given us your implied consent to our Best Execution policy. No further action is required on your part.

Conflicts of Interest

Why have you sent me HSBC Bank plc's Conflicts of Interest Policy and what does this mean to me?

MiFID requires that we inform you of our Conflicts of Interest policy and of any potential conflicts of interest that may arise during the provision of investment services.

It should be noted that HSBC Bank plc already had policies in place to identify and manage potential conflicts that may have arisen between:

• The Bank and/or its employees and clients
• Two and/or more clients

How can I receive a copy of the Conflicts of Interest Policy?

In the material mailed to you we have included a summary of our Conflicts of Interest Policy. Alternatively you can contact your Relationship Manager who will be able to provide you with further information.

Suitability & Appropriateness

Suitability

MiFID introduces the concept of assessing for suitability, and requires that we ensure that any investment advice provided to investors is suitable for them. In order to be able to assess for suitability, the Bank must be provided with specific information by the client(s) including, financial information, previous experience in investment products, risk tolerance and the client's investment objectives.

Appropriateness

MiFID also introduces the concept of assessing the appropriateness of transactions in complex investment products.

For non-complex investment products, we are only obliged to assess for appropriateness when the client chooses to undertake the transaction after having been informed of the product at our initiative.

We are not required to assess the client's investment decision for appropriateness when the client is acting on his own initiative. However, when a client undertakes a transaction on his own initiative we are still obligated to inform the client of the loss of protection which results from acting on their own initiative.

Inducements

Inducements are payments or non-monetary benefits which we receive or pay out as a result of advising on or arranging investments for clients. According to MiFID, we are required to disclose to our clients the basic information concerning any such payments or non-monetary benefits.