Investment Service General Terms and Conditions
1. Scope of application
These Springvest Oy’s (”Springvest”) investment service general terms and conditions shall be applicable alongside the Agreement to the Investment Service being provided to the Client from time to time. The terms and conditions of the Agreement shall always take precedence over the investment service general terms and conditions.
The Growth Company Funding business operations shall refer to the business operations conducted within the scope of the client agreement. The Asset Management business operations shall refer to the business operations conducted within the sphere of an Investment Advice and Order Intermediation Agreement or Discretionary Asset Management Agreement.
2.1 Definitions pertaining to the Growth Company Funding business
A person who has submitted to Springvest a Subscription Order concerning a Financial Instrument and/or to whom Springvest has provided investment advice.
An agreement between the Parties whereby it is agreed that Springvest acts as the recipient and intermediary of the Client’s subscription order and the provider of investment advice.
The company for which Springvest arranges an emission.
Designating Springvest, acting as the arranger of the Target Company’s emission, as the recipient and intermediary of the Client’s subscription undertaking concerning a Financial Instrument in accordance with the Agreement.
The Client and Springvest.
The share issued by the Target Company.
An investment memorandum concerning the share issue of the Target Company.
Securities intermediation referred to under the Finnish Act on Investment Services that Springvest provides to the Client through acting as the subscription venue in the Target Company emissions arranged by it as well as non-independent investment advice, which is deemed to comprise any recommendation by Springvest or its tied agent to subscribe for Financial Instruments in an emission arranged by Springvest.
Investment and Shareholders’s Agreement
An agreement between the Client and the Target Company setting forth the rights and obligations of the Client towards the Target Company in its capacity as a shareholder.
2.2 Definitions pertaining to the Asset Management business
The independent investment advice and intermediation of orders referred to under the Finnish Act on Investment Services, whereby Springvest or its tied agent issues investment recommendations regarding stock exchange-listed financial instruments to the Client. Asset management referred to under the Finnish Act on Investment Firms, whereby the Client grants Springvest the right under discretionary asset management to intermediate orders concerning stock exchange-listed financial instruments to be executed on behalf of the Client.
An agreement between Springvest and the Client stipulating upon Springvest acting as the provider of independent investment advice and the intermediary of orders (”Investment Advice and Order Intermediation Agreement”). An agreement between Springvest and the Client stipulating upon Springvest acting as a discretionary asset manager (”Discretionary Asset Management Agreement”).
The top-level classification of asset classes into different asset categories, with each having similar characteristics within a class. For instance, equity investments and interest investments. Each of the securities in an investment portfolio may only belong to one asset class.
An expression used in discretionary asset management and investment advice, referring to the allocation of investments across different asset classes. For instance, an asset allocation of 70/30 refers to a situation in which 70% of the Client’s investments may be in global equity investments and 30% in global interest investments.
Asset Allocation Range
The minimum and maximum values determined per asset class together with the Client, within which the weighting of each capital category may shift. The values of the range are updated in the customer-specific investment plan no less than once a year at the annual review conducted with the Client.
Strategic Target Allocation
The asset allocation agreed upon with the Client, which in Springvest’s best and independent evaluation is best suited for the Client, taking into account the Client’s own financial standing, investment horizon and risk tolerance.
Global Equity Investments
An asset class into which the shares of stock exchange-listed companies eligible for the after market are classified worldwide.
Global Interest Investments
An asset class including bonds eligible for the after-market, money market investments and cash. Issuers of debt instruments include, inter alia, states, companies, municipalities as well as various special credit facilities worldwide.
Time Weighted Return (TWR) method
A method for calculating the return of a portfolio, in which the return for the selected review period of a portfolio (for instance 1 year) is calculated as the geometric average of a shorter measured review period (for instance 1 day). This so-called time-weighted return calculation method does not take into account the money flow entering or exiting the portfolio. For example, the return of a Finnish mutual fund is typically calculated as time-weighted return. Also asset managers typically measure the return of Client portfolios using this method, because the additional investments and partial purchases effected by the Client may be beyond the asset manager’s control.
Money Weighted Return (MWR) method
A method for calculating the return of an investment portfolio, in which the return for the selected review period (for instance 1 year) of a portfolio is calculated using the internal interest rate method. This method involves identifying the internal interest rate which, when discounted, produces equal current values of the cash flows exiting and entering the portfolio. This so-called money-weighted return calculation method takes into account the money flows entering and exiting the portfolio. This method typically places more weight on the periods when the portfolio is large, and vice versa.
Fixed Asset Management Fee
The fixed asset management fee is calculated and charged monthly in arrears or over another time period as agreed upon in the Agreement in more detail. The asset management fee is always determined as an annual percentage.
3. Investment Services
Springvest provides its Clients the Investment Services defined above. Springvest is registered as an investment services company in the public register maintained by the Finnish Financial Supervisory Authority, containing details of the services Springvest is licenced to provide.
4. Use of Tied Agents
In the provision and marketing of Investment Services, Springvest may retain tied agents operating on behalf and under the responsibility of Springvest. For the purposes of supervising the lawfulness of the activities of the tied agents, the Finnish Financial Supervisory Authority maintains a public register of tied agents.
5. Client Classification
Pursuant to the Finnish Act on Investment Services, an investment services company must inform the Client of their classification as a non-professional client, professional client or acceptable counterparty. At the beginning of the client relationship Springvest classifies all of its clients as non-professional clients and treats them as non-professional clients in relation to all Investment Services. The Client shall have the right to seek a modification to its client classification by means of written application. The Client’s classification has an effect upon the scope of investor protection and the applicable procedural rules.
Effects of classification on investor protection
Only non-professional clients fall under the scope of the Investors’ Compensation Fund protection. The fund will compensate for any losses incurred by the Client in case Springvest has not paid the Client’s unequivocal and undisputed receivables falling under the scope of the protection in accordance with the Agreement. The amount of the compensation payable out of the Investors’ Compensation Fund to one investor amounts to 9/10 of the amount of its receivable from one investment services company, however, no more than EUR 20 000. The fund does not provide compensation for losses incurred from incorrect investment decisions, which entails that the Client continues to be responsible for the consequences of its own investment decisions. Non-professional clients have the right to have a disagreement between themselves and an investment services company resolved by an independent body issuing resolution recommendations. The Investment Complaints Board functions as such a body. The Investment Complaints Board does not process statement requests from professional clients.
Effect of classification on the applicable procedural requirements:
Non-professional clients are provided with the terms and conditions of the Agreement prior to concluding the Agreement, along with sufficient information regarding Springvest and the service to be provided. Also any material changes in the information provided must be notified. The information must be provided in a permanent manner so that it is capable of being printed out or saved. Information regarding Springvest and the services provided by same, as well as any material changes occurring in same, is available on Springvest’s website at www.springvest.fi.
In providing Investment Services to a non-professional client, Springvest requests from the Client details of their investment experience and expertise regarding the Financial Instrument or Investment Service, as well as their financial standing and investment objectives in order to be able to assess, whether or not the Financial Instrument or Investment Service is appropriate and suitable for the Client in question. Springvest shall be entitled to rely upon the information provided by the Client.
Should Springvest deem a Financial Instrument or Investment Service not appropriate or suitable for the Client, or if the Client has failed to provide the information required for assessing appropriateness and/or suitability, Springvest shall inform the Client of same and shall unable to recommend the Financial Instrument or Service in question to the Client.
A professional client falls only partially under the scope of application of the aforementioned procedural rules, and, therefore, no assessment of the appropriateness of a financial instrument is conducted in relation to a professional client. A professional client must be provided with a general description of the nature of the financial instruments that the service relates to and of the typical risks pertaining thereto, if this is necessary taking into account the investment experience of the Client in question.
By means of a written application, an acceptable counterparty may request Springvest to extend the procedural rules intended for the protection of the investor to be applicable to business transactions conducted with it either generally or in relation to a single transaction. Springvest shall consider whether or not to agree to the presented request on a case-by-case basis. In all other cases, the procedural rules and provisions governing investor protection shall not be applicable to acceptable counterparties.
6. Assignment of agreement
Neither Party may assign the Agreement to any third party.
7. Data protection
8. Recording of telephone calls
As a result of the legislation that entered into force in January 2018, Springvest is obligated to record and retain all conversations conducted with the Client over the telephone and through electronic messaging that result in or may result in business transactions. The Client is entitled to receive information of such recordings upon request, against a reasonable charge.
9. Processing of client feedback and complaints
Client satisfaction is of the topmost priority for Springvest, and the swift processing of client feedback and complaints comprises a material part of client satisfaction. Client feedback may be submitted over the telephone or by email to email@example.com or in person to the Client’s designated contact person. Should the Client have claims against Springvest Oy, such claims must always be presented in writing.
To the extent possible, all client feedback and complaints are processed immediately in connection with receiving same. In case immediate processing is not possible, the feedback and complaints shall be directed, depending upon the nature of the matter, to the account manager or Compliance Officer for further processing. Springvest strives to process client complaints as soon as possible, latest within one week of receiving the complaint. In case the final processing of a client complaint within one week is not possible, the key account manager shall notify the Client who has submitted the complaint of a more detailed processing schedule. All client complaints and documents concerning the processing of same shall be saved in order to enable functioning follow-up monitoring.
Springvest’s liability for damages shall be limited to the direct damages incurred by the Client as a result of Springvest’s breach of contract. Springvest shall not be liable for any indirect damage incurred by the Client, such as, lost profits, disruptions in other contractual relationships or third party claims, unless the damage was caused wilfully or with gross negligence. Springvest shall not be liable for any damage caused by erroneous information received from third parties. Springvest shall also not be liable for the correctness of any information presented in the Investment Memorandum.
10. Force Majeure
Neither Party shall be liable for any damage caused by a force majeure event. A force majeure event shall refer to an unforeseen event preventing a Party from fulfilling its obligation and which the Party is unable to reasonably prevent through its own efforts. A Party shall inform the other Party of the Force Majeure event without any undue delay. A Party shall seek to the extent possible to mitigate the damage incurred by the other Party as a result of the force majeure event.
11. Governing law and dispute resolution
The Agreement and the provision of the Investment Service shall be governed by the laws of Finland. The Client may turn to the Finnish Financial Ombudsman Bureau to obtain information pertaining to the investment services and, if necessary, to refer any disagreements concerning the Agreement to be resolved by the Investment Complaints Board. The contact form is available at the Finnish Financial Ombudsman Bureau’s website www.fine.fi. Any disputes between the Parties shall be resolved in the Helsinki District Court, unless a non-professional Client to be considered a consumer requires for the matter to be processed in the general court of first instance of the judicial district of their place of residence.
12. General Terms and Conditions of the investment services related to the Growth Company Funding business operations
12.1 Handling a subscription order
Springvest acts as the subscription venue for Financial Instruments in the Target Company emissions arranged by it and intermediates the Client’s subscription undertaking to the Target Company. Executing a subscription order is subject to the Client paying the subscription price of the Financial Instruments in accordance with the provided payment instructions. After the closing of each financing round, the Target Company or Springvest shall furnish to the Client a copy of the Investment and Shareholders’ Agreement signed by the Target Company without any undue delay.
12.2 Cancelling a subscription order
If the Investment Memorandum is supplemented prior to the expiration of the subscription period owing to an error, deficiency or relevant new information that may be of material importance to the Client, the Client who has submitted a Subscription Order prior to the announcement of such information shall have the right to cancel their subscription before the Financial Instruments are registered in the Trade Register within five banking days of announcing the supplementation. The Target Company shall inform the Customer of the actions pertaining to any cancellation of subscription by email or mail simultaneously with the supplementation of the Investment Memorandum. In case a Subscription Order is cancelled, the subscription price and fee shall be reimbursed to the bank account designated by the Client in connection with the subscription without any interest.
Subscription orders are binding and they cannot be modified or cancelled other than in the circumstances mentioned above.
12.3 Investment costs and fees
The subscription fees to be charged to the Client and any other costs and fees pertaining to the provision of the Investment Services shall be agreed upon in the Agreement.
12.4 Administration of Client funds
The Client shall pay the amount of the Investment and the Subscription Fee to Springvest into a separate client funds account (”Client Funds Account 1”). Thereafter, Springvest shall transfer the Subscription Fee to another client funds account (”Client Funds Account 2”). Client Funds Account 1 is specified in the Agreement. Client Funds Account 1 and Client Funds Account 2 are intended solely for the administration of the Investment and the Subscription Fee. Springvest shall have the right to transfer the Investment to the Target Company from Client Funds Account 1 once the funds in Client Funds Account 1 exceed the minimum amount of the issue. Springvest shall have the right to transfer the Subscription Fee to Springvest’s account from Client Funds Account 2 and to the accounts of the tied agents once the funds exceed the minimum amount of the issue and they have been transferred to the Target Company’s account. In case the minimum amount of the issue defined in the Investment Memorandum is not achieved within the subscription period and the Target Company does not resolve to raise a sum lower than same, Springvest shall return the Investment and the Subscription Fee from the Client Funds Account 1 and Client Funds Account 2 to the Client without any delay.
12.5 Risks of the investment and suitability for the Client
Investing in a Target Company in its growth stage entails considerable risks, the materialisation of which may cause the Client to lose part or all of the capital invested by them. The past performance of a financial instrument is no guarantee of its future development. The price formation of financial instruments may not be reliable, and Clients may not be able to sell financial instruments at the desired time or at all. Consequently, no functioning market is created for the financial instruments. In its capacity as an unlisted company, the Target Company is also not under a similar disclosure obligation stipulated for under the law or the rules of the stock exchange towards its shareholders as listed companies. Furthermore, the financial instruments lack may any voting rights and the administrative rights of the owner of a financial instrument are very limited.
Target companies are typically growth companies in their start-up phase. According to general consensus, an average of 1/10 of investments made into growth companies generate a good or excellent return, 4/10 generate a moderate return and 5/10 fail at least in part. The target companies may not yet have any significant amount of turnover or operating profit, but, rather, their value is largely based upon future expectations that may not materialise. Owing to the lack of any established operations of the target companies, a subscription for target company shares is associated with risks that are considerably higher than investments made into more developed companies.
The Client has replied to the questions posed by Springvest concerning, inter alia, the Client’s financial standing, willingness to take risks, investment experience and expertise so that the Client’s investment experience and/or expertise may be assessed to be at a sufficient level for the purposes of fulfilling the Client’s obligation to request information (Clause 12.6) and making the investment and the investment to be suitable for the Client taking into consideration their individual circumstances and willingness to take risks.
In no respect shall Springvest act as the Client’s advisor in evaluating any taxation, accounting, legal, financial or other risks but, rather, the Customer must contact an expert, if necessary.
12.6 Client’s obligation to request information
The Client warrants that they have familiarised themselves with the Agreement and understand Springvest’s position as the provider of the Investment Service. The Client is aware of the risks of the investment described above and warrants that they have familiarised themselves with the Financial Instrument, the Investment and Shareholders’ Agreement and the Investment Memorandum to a sufficient extent to be able to independently make investment decisions in the manner required by their financial standing and to be able to be independently responsible for the outcomes of their investment activities.
12.7 Target Company client reporting
The Target Company has undertaken to send the Client a status review a minimum of twice a year by email to the email address designated by the Client. The status review shall contain, inter alia, information of any substantial new agreements and investments affecting the value of the Target Company as well as a general description of the financial standing. In addition, the Target Company shall furnish its financial statements to the Client always after the end of the financial period.
13. General Terms and Conditions of investment services pertaining to the Asset Management business operations
13.1 Assets encompassed by the Agreement
The assets encompassed by the Agreement shall be defined under the Agreement. The Client’s cash funds shall be retained separately from Springvest’s own assets in the client funds account of the contractual partner selected by the Client.
The Client may add additional funds to be encompassed by the Agreement (additional investment). The Investment Service for the additional investment shall commence within ten (10) banking days of the banking day on which the additional investment was recorded in the Client’s client funds account.
The Client may announce the transferring of assets away from the scope of the agreement in part (partial withdrawal) or in full (withdrawal). After receiving a notification of a partial withdrawal or withdrawal, Springvest shall liquidate investments of the portfolio into cash within a reasonable time period. Springvest endeavours to liquidate investments in proportion to the amounts of same, but in certain situations a partial withdrawal may result in an asset allocation of an investment portfolio that is not as agreed in the client-specific investment plan. Springvest shall strive to rectify the situation without any undue delay.
Springvest shall submit an order to the contractual partner managing the Client’s client funds account in order to effect payment of the order to the bank account designated by the Client. The minimum amount of a partial withdrawal is EUR 5 000 per each partial withdrawal. A partial withdrawal may cause the Client to incur costs in accordance with the rates set forth in the price list in force from time to time.
13.2 Asset allocation and modifying the allocation
The Client shall determine the strategic target allocation in Appendix 2 to the Agreement as well as the ranges for the asset allocation. In certain situations the Client’s portfolio may temporarily deviate from the asset category ranges determined by the Client. Such deviations may be attributable, inter alia, to strong market movements or factors related to the liquidity of the investment markets or the price formation of financial instruments. Depending upon the agreement concluded with the Client, Springvest shall modify the allocation or provide investment advice pertaining to the situation without any delay in order to attain the situation complying with the targets of the client-specific investment plan.
13.3 Handling of corporate actions
Springvest shall have the right to undertake any action it deems necessary in order to secure the Client’s assets and rights. Springvest shall not, however, be obligated to undertake any action other than that mentioned in the agreement or separately agreed upon with the Client in writing.
In case Springvest or another party considers an action concerning assets, such as a corporate action, to require instructions from the Client, Springvest shall seek to inquire procedural instructions from the Client in advance. In case the Client’s assets are insufficient to carry out the aforementioned action, the Client has not provided the required instructions, or Springvest does not have a reasonable time to carry out the action regardless of the cause, Springvest shall not be obligated to carry out the action and shall not be liable for any damage incurred as a result of not carrying out the action in question.
13.4 Fees, charges and expenses
For carrying out the tasks of asset management, Springvest shall charge the fees, charges and expenses determined under the discretionary asset management agreement or the investment advice and order intermediation agreement.
13.5 Commencement of activities under the Agreement
The investment service under the Agreement shall be commenced within ten (10) banking days of the banking day on which the investment or additional investment was recorded into the Client’s client funds account.
13.6 Outsourcing and retaining external assistance
Springvest shall have the right, without notifying the Client, to outsource the activities under the agreement and the carrying out of the actions required by same in their entirety or partially and to retain external assistance in order to fulfil its contractual obligations. The Client’s information shall only be disclosed to the extent required by such outsourcing or use of external assistance.
13.7 Depreciation of the value of assets
Pursuant to the Mifid2 Directive, Springvest is obligated to inform the Client without any delay, in case the value of all of the Client’s assets encompassed by the agreement decreases by more than 10% as of the beginning of the current quarter. Thereafter, the notification obligation shall concern every following value depreciation of 10 percentage points. Springvest has established a policy, whereby all Clients within the scope of investment advice and order intermediation agreements and discretionary asset management agreements are in this connection examined on the portfolio-level. Springvest shall not be obligated to inform the Client, in case the value of a single investment within an investment portfolio decreases in the manner mentioned above.
13.8 Investment activities payment traffic
Springvest does not participate in the payment traffic of the Client’s investment activities. Springvest’s representative shall forward the Client’s orders to the contractual partner managing the Client’s Client funds account in order to carry out a withdrawal or partial withdrawal. The Client shall be responsible for ensuring that the banking details required for the money transfer are correct and up-to-date.
13.9 Special conditions concerning US residents
Investments are not being marketed to US residents, nor is information that may be considered to constitute investment advice or a recommendation to purchase or sell financial instruments being provided to US residents. In case the Client’s place of residence or the domicile of a corporate client is relocated to the United States, the Client must inform Springvest of same forthwith.
13.10 Notifying changed information
The Client must notify Springvest without any undue delay of any changes to the information provided by it, including any changes in client details. A written notification of such changed details should be sent to the address firstname.lastname@example.org. The notification obligation shall also apply to changes occurring in the status of a professional client or acceptable counterparty that may impact client classification.
Springvest shall not be liable for any damage incurred as a result of the Client’s failure to notify Springvest of its changed client or other details.
13.11 Conflicts of interest
Once the Client has been informed of a potential conflict of interest between the Client and Springvest or between the Client and Springvest’s other Client, the Client shall be deemed to have accepted the situation, unless they complain to Springvest about same without any delay. The management of conflicts of interest is described in more detail in a document entitled Conflict of Interest Management Principles in Springvest Oy. The valid version of the document is available from Springvest upon request.
13.12 Amendments to contract terms
Springvest shall have the right to make amendments to its agreements, contract terms, price list and appendices to the agreements, if any. The amendment shall enter into force as of the beginning of the calendar month commencing one (1) month after the Client has been informed of the amendment of contract terms as described below under section ”Termination and rescission of agreement”. Unless the Client terminates the agreement in accordance with the provisions of section ”Termination and rescission of agreement”, the agreement shall continue in force with the amended content. In case the Client terminates the agreement, the agreement shall in such a case end latest on the effective day of the amendment.
13.13 Termination and rescission of agreement
The Client shall have the right to terminate the agreement to end within five (5) banking days of Springvest receiving the termination notice. Springvest shall have the right to terminate each agreement to end thirty (30) days from the date the Client has received the termination notice. A party shall be deemed to have been informed of any action, instruction or other notice delivered by email on the banking day following the sending thereof, unless otherwise proven.
13.14 Terms and conditions for discretionary asset management
13.14.1 Application of contract terms
These general terms and conditions shall be applicable to the contractual relationship between the Client and Springvest, as defined in more detail under the discretionary asset management agreement and these general terms and conditions.
In addition to the discretionary asset management agreement, its appendices, price list, general terms and conditions and discretionary asset management terms of contract, the contractual relationship shall be governed by the domestic and foreign legislation in force from time to time, as well as the market rules of market places and market practice that are binding upon the Client under the agreement.
13.14.2 Discretionary asset management
Springvest shall have the right to issue orders binding upon the Client and to represent the Client in all matters pertaining to the management of the assets encompassed by the discretionary asset management agreement. Legal acts carried out by Springvest shall be binding upon the Client and shall create rights and obligations for the Client as if the Client had assumed same themselves.
For the sake of clarity, title to the assets encompassed by the agreement or to the purchase price obtained for same shall always be vested with the Client. The Client shall conclude the agreements required for custody and clearing of transactions themselves, which entails that the contractual relationship under such agreements always arises between the Client and the relevant service provider. Springvest shall have the right to obtain from the custodian or custodians any information necessary for the purposes of asset management and to issue to the custodian instructions and orders concerning the assets.
Springvest shall report upon discretionary asset management at the intervals agreed upon in the agreement in question.
13.14.3 Client’s right to issue instructions and orders concerning assets
The Client may issue orders and instructions concerning the assets to Springvest. Springvest shall endeavour to the extent possible to take into account the orders and instructions issued by the Client, but these shall not be binding upon Springvest and it shall have the right to not abide by same, especially where their materialisation would result in an asset allocation that is not in line with the strategic asset allocation agreed upon with the Client. Springvest shall not be responsible for the content or asset allocation of the Client’s investment portfolio remaining in the future in line with the orders mentioned above, even if they result in immediate changes in the Client’s investment portfolio.
Orders related to the assets encompassed by the agreement shall be issued using a permanent medium and shall be sufficiently specific, as set forth in more detail in the agreement.
13.15 Contract terms concerning the investment advice and order intermediation service
13.15.1 Application of contract terms
These general terms and conditions shall be applicable to the contractual relationship between the Client and Springvest, as defined in more detailed in the investment advice and order intermediation agreement and general terms and conditions.
In addition to the investment advice and order intermediation agreement, its appendices, price list, general terms of contract and investment advice and order intermediation contract terms, the contractual relationship shall be governed by the domestic and foreign legislation in force from time to time, as well as the market rules of market places and market practice that are binding upon the Client under the agreement.
13.15.2 Investment advice and order intermediation
The legal acts carried out by Springvest obligate the Client and create rights and obligations for the Client as if the Client had created same themselves.
Title to the assets encompassed by the agreement or to the purchase price obtained for same shall always be vested with the Client. The Client shall conclude the agreements required for custody and clearing of transactions themselves, which entails that the contractual relationship under such agreements always arises between the Client and the relevant service provider. Springvest shall have the right to obtain from the custodian or custodians any information necessary for the purposes of asset management and to issue to the custodian instructions and orders concerning the assets.
Springvest shall report upon discretionary asset management at the intervals agreed upon in the agreement in question.