STOCKBROKER PROPOSAL FORM



Professional Indemnity Application For Stockbrokers

Before completing this form, you can read “About Our Insurance Services” if you so wish, which can be downloaded from professionalinsuranceagents.co.uk .

Please complete the following form and return it to:

Professional Insurance Agents Ltd

E-mail: info@professionalinsuranceagents.co.uk

If you have any difficulty in answering these questions or need to discuss any aspect of professional indemnity, please contact us and we will be pleased to help.

Please read the notes at the bottom of this page before completing the form.

Telephone UK 01323 648000

World-wide +44 1323 648000

Fax UK 01323 648001

World-wide +44 1323 648001

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2. We will be able to process your application more efficiently if you complete the following form on screen and return it back to us by E-mail. If this is not convenient however we suggest that you print out the following pages and complete the form manually. It can then be faxed back to us and we will be happy to provide a quotation as soon as possible.

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5. In the following form there are a number of Yes or No options. Please click in the relevant checkbox as illustrated below. For example if you wish to indicate Yes;

Y N

STOCKBROKER PROPOSAL FORM

1) TITLE OF FIRM

(including any former Practice(s) / Firms for which cover is required:

     

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2) PROFESSION(S) / BUSINESS(ES) OF PRACTICE / FIRM (full description of activities):

     

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3) a. Date of Commencement of current practice(s) / firm(s):      

b. Date of Commencement and cessation of former practice(s) / firms:      

c. Reason for cessation of former practice(s) / firms:      

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4) If you have undertaken work outside of the UK, please provide details for all previously completed, current and estimated projects.

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5) Is your business a member of any professional organisations or trade associations?

YES NO

     

If YES, please provide details

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6) Address/es Of Practice(s):

|      |      |

|      |      |

|      |      |

|Post Code:      |Post Code:      |

|Tel:       Fax:      |Tel:       Fax:      |

|E-mail:       |Mobile:       |

|Website:       | |

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7)

|Names in full of all directors / |Age |Qualifications |Date Qualified |How long a partner in |How long as a partner/ |

|partners/ principals | | | |this practice |principal |

|and consultants | | | | | |

|      |   |      |      |      |      |

|      |   |      |      |      |      |

|      |   |      |      |      |      |

|      |   |      |      |      |      |

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8) Is cover required in respect of past work for any partner / principal who has left, retired or died

YES NO

If YES, please give the following:

|Full Name |Position |Qualifications |How long in employment with this |

| | | |practice |

|      |      |      |      |

|      |      |      |      |

|      |      |      |      |

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9) Total number of

a) Partners / Principals: (    ) Draughtsmen: (    ) Typists/Office: (    )

Qualified Staff: (    ) Trained Staff: (    ) Others: (    )

System Analysts: (    ) Designers: (    ) Programmers: (    )

b) For Banking entities only, the number of employees’ dealing with Stock Exchange Business.

Please give the total number of locations with staff attributable to each split as follows:

1) Head Office     

2) Branch Offices     

3) Agency Offices     

4) Overseas Locations (Please Specify)     _

10) Has the practice previously been insured for Professional Indemnity? YES NO

If YES, please give:

Name of Insurers:      

Premium:      

Indemnity Limit:       excess of £      each and every claim

Date of expiry of coverage:     

11) State gross fees received in past five financial years and estimate of fees for forthcoming year:

| |     |     |     |     |     |Forthcoming year: |

| | | | | | |     |

|UK |      |      |      |      |      |      |

|USA or Canada |      |      |      |      |      |      |

|Elsewhere, excluding USA/Canada |      |      |      |      |      |      |

|Total |0[pic]0.00 |0[pic]0.00 |0[pic]0.00 |0[pic]0.00 |0[pic]0.00 |0[pic]0.00 |

|Largest total fees from any one client or group |      |      |      |      |      |      |

|Average fees received |      |      |      |      |      |      |

When does your financial year end?      

12) Trading volumes for current year (please state which year)

a) Stocks      

b) Bonds      

c) State the total of salaries, including commissions, paid to Directors and Employees

during the last financial year £     

d) Are any Director, Partners, Managers or Employees compensated by Profit Commission,

Bonus, Performance or rewards based on their own sales, or that of their

Department/Division/Subsidiary (As apart from the proposer as a whole)

YES NO

If yes please give details of those Departments/Subsidiaries/Division

     

|Type |Approximate number of |Approximate % of income per type of activities |Approximate % of income |

| |persons | | |

| | | | |

| | | | |

|  |  |Executionary |Advisory |Discretionary |Worldwide exc.USA|USA |

| | | | | | | |

|a. Agency |      |      |      |      |      |      |

|i) Private Client | | | | | | |

|ii) Institutional | | | | | | |

|iii) International | | | | | | |

|iiii) Derivatives | | | | | | |

|b. Principal |      |      |      |      |      |      |

|i) Market Making | | | | | | |

|ii) Proprietary Trading | | | | | | |

|iii) Other | | | | | | |

|c. Gilt Edge |      |      |      |      |      |      |

|i) Money Broking | | | | | | |

|ii) Inter Dealing Brokers | | | | | | |

|iii) Primary Dealers | | | | | | |

|d. Portfolio Management |      |      |      |      |      |      |

|i) Private | | | | | | |

|ii) Institutional | | | | | | |

|excluding Pension | | | | | | |

|funds | | | | | | |

|iii) Pension funds | | | | | | |

| |      |      |      |      |      |      |

|e. Corporate Finance | | | | | | |

|f. Financial Services e.g. |      |      |      |      |      |      |

|ISA’s Etc | | | | | | |

|g. Research |      |      |      |      |      |      |

|h. Clearing Agents |      |      |      |      |      |      |

|i. Administration |      |      |      |      |      |      |

|j. Nominee/Safe Custody |      |      |      |      |      |      |

|k. Independent Trustee |      |      |      |      |      |      |

|Services | | | | | | |

|l. Banking Services |      |      |      |      |      |      |

|n. Any Other Activities |      |      |      |      |      |      |

|(Please specify) | | | | | | |

| |      |      |      |      |      |      |

|TOTAL | | | | | | |

13) Please give details of the number of principles, Directors and employees involved in the following activities, showing the percentage of income from each activity. If indicated splits do not apply, please amend to suit. If there is an overlap of work, please only show the person once, under their main activity.

14) State how many flotations you have undertaken in the last 12 months      

a) Please list the names of companies & share capital involved.

|Company |Share Placed |Value |

|      |      |      |

|      |      |      |

|      |      |      |

| | |Total:       |

b) Please list takeovers or merger where you have acted on behalf of your clients in the last 12 months, stating who you were acting for and the values involved.

|Offeror |Offeree |Outcome |Offer Value |

|      |      |      |      |

|      |      |      |      |

| | | |Total:       |

c) Please list how many rights issues you have undertaken in the last 12 months

|Company |Share Placed |Value |

|      |      |      |

|      |      |      |

| | |Total:       |

d) Do you undertake trust or discretionary account management YES NO

e) Are all trust/discretionary transactions subject to the same procedures and reviews as your own account transactions YES NO

f) Are all Trust/Discretionary transactions subject to the same procedures and reviews as your own account transactions YES NO

If not please advise of procedures

|Please give details of the following: |      |

|The number of trust/Discretionary accounts |      |

|The asset value of the largest managed account |      |

|Total funds under Discretionary Management: |      |

|How often do you present reports to your |      |

|clients: | |

Do you have an approved list of securities which can be recommended to clients

YES NO

15) What securities & guarantees have been lodged with the Stock Exchange?

     

16) Has your membership ever been suspended in the last 5 years

YES NO

If yes please give details

     

17) Have employees been made aware of the stock exchange rules and regulations

YES NO

18) Have employees been made aware of your own rules or written instructions covering the companies procedures, which are clearly defined with duties expected of each employee.

YES NO

19) Do employees contracts incorporate a policy of plain language, so full understanding of the stock exchange rules and regulations, your own internal rule book(s) on written instructions covering all aspects of your business is presented and understood

YES NO

20) Please confirm that no one employee is permitted to control any transaction from commencement YES NO

21) Are all client instructions confirmed when completed by the company to the client in writing? If yes please confirm if any written confirmation is undertaken by someone not involved in the transaction itself

YES NO

If no, please advise

     

22) What is the procedure for dual signatures, being independent of each other, to authorise all transactions and all payment

     

23) What procedures are in place for payment instructions for the following:

a) Verification that the recipient(s) of cheques were entitled to such funds, by a party not connected to the original transaction

     

b) That an independent party within the company and not connected to the original transaction to authorise such payment

     

c) What system is in place to ensure that person(s) responsible for the preparation of cheques, Bank Transfers and Bank instructions to be independent from the person(s) responsible for recording entries or infiltrating transfers

     

d) Are any bearer/negotiable securities kept on the premises. If so, where are they kept and what is the physical security surrounding them

     

INternet QUESTIONNAIRE

24) Is the internet used to transmit financial instructions that commit either you or your clients?

YES NO

25) Can the client’s process transactions without imposed limits?

YES NO

26) Is information that would be considered client or company confidential transmitted un-encrypted, using the internet?

YES NO

27) Are the applications offered internally?

YES NO

28) Are the applications offered to unknown clients?

YES NO

29) Using such applications, can clients operate without prior contractual agreements?

YES NO

30) Is there any other method by which the customer is obliged to signify their acceptance of responsibility for transactions processed within the internet?

YES NO

NB - Please note the following questions address only those application transactions under which commitments are given or accepted by the company and its clients, and those transactions which include information which would be considered confidential by either party.

31) Are all unique codes issued or controlled by the company?

YES NO

32) Do the procedures require that all users have a unique password known only to themselves?

YES NO

33) Are any other forms of unique user identification used? (e.g. one time passwords, pre-listed day, code, digital signatures etc)

YES NO

34) Are all messages protected against identification viewing?

YES NO

35) Are there control procedures that confirm acceptance of transactions by either party that constitute a non repudiation control?

YES NO

36) Are ‘Session end’ security procedures used?

YES NO

37) Are penetration tests carried out on a real time or routine basis/how frequently?

a) Real Time? YES NO

b) Routine? YES NO

c) How frequently?      

Is any form of activity tracking carried out in relation to the internet facilities?

YES NO

If YES, please provide details

     

38) Are the internet servers connected to any of your internal computer networks, the primary/main processing systems or other free standing computer systems?

YES NO

If YES, Please specify

     

39) Are all received messages routed through a firewall or other message authentication program prior to acceptance?

YES NO

If so, please specify

     

40) Are all received messages routed through a firewall or other message authentication program prior to acceptance?

YES NO

If so, please specify

     

41) Are all transactions which are passed to the main processing facilities re-formatted before being passed on?

YES NO

42) Do the servers allow any ‘trusted hosts’? (i.e. they allow other computer systems to initiate program actions)

YES NO

If YES, please name the trusted host      

If so, does your company monitor the security arrangements on the ‘trusted hosts’?

YES NO

43) Do the servers operate any application systems other than the internet access?

YES NO

44) Is the total estimated maximum value in any one transit ever likely to exceed USD 500,000?

YES NO

45) Do you have an internal auditor staff on a full time basis?

YES NO

If yes, to whom does the head of the internal audit department report?

     

46) Is there any surprise audit system?

YES NO

47) By whom is your external audit conducted?

     

48) How often during each year do the external auditors visit your premises?

     

49) Is there a monthly audit of bearer/negotiable securities?

     

50) Do you require all employees, including Directors, with any form of fiscal responsibility to take a period of uninterrupted holiday?

YES NO

51) Please confirm that the following forms of instructions from clients are recorded, and please confirm what period of time these recordings are held?

Timeframe

Telephone: YES NO      

Facsimile: YES NO      

E-mail: YES NO      

OFFICE PROCEDURES

52) Do you have telephone recording systems? YES NO

53) Are recordings made in each department? YES NO

54) How long are these retained?      

55) How long do paper copies of client files get retained for?      

56) How long do E-docs information on clients get retained for?      

CUSTODIAN ARRANGEMENTS

57) Are you a member of Crest? YES NO

58) Are you a sponsored member of Crest? YES NO

If YES, who is your sponsor?      

59) What in approx value of stocks held in custody for clients under your control?

     

60) How often do you reconcile holdings on client accounts and holdings in the Crest system or elsewhere?

     

INTERNAL AUDIT

61) Please give us full details of procedures the company has in place, and how often it is carried out.

     

COMPLIANCE DEPARTMENT

62) Please give us details of the company compliance procedures, who conducts it and who they report to.

     

63) What amount of indemnity do you require:

£500,000 £1,000,000 £2,000,000 £3,000,000

Other amount £     

64) What is the maximum amount of excess you are prepared to carry?

£     

65) Have any claims for Professional negligence, error or omission (successful or otherwise) been made against the Directors of the practice or its present and/or past Partners during the past 10 years?

YES NO

If YES, please give full details, including amounts

     

66) Are any of the Directors/Partners/Principles/Employees, AFTER ENQUIRY aware of any circumstances which may give raise to a claim against this Practice or their predecessors in business or any of the present or former Partners/Principles.

YES NO

If YES, give full details

     

67) Has any insurer ever:

a) Declined a proposal or renewal for this practice or any Director/Partner/Principle:

YES NO

b) Required an increased premium or imposed special terms?

YES NO

c) Cancelled an Insurance

YES NO

68) Has disciplinary action ever been brought against you?

YES NO

If any answer is Yes, Please give full details

     

Because signatures are not widely available via e-mail a No Claims Declaration will need to be signed and all terms will be subject to this.

Is this acceptable? YES NO

I/We declare that the statements and particulars in this proposal are true and that I/We have not mis-stated or suppressed any material facts. I/We agree that this proposal, together with any information supplied by me/us shall form the basis of any Contract of Insurance affected thereon. I/We undertake to inform insurers of any material alteration to these facts occurring before completion of the Contract of Insurance. Returning this proposal does not bind the Proposer or Underwriter to complete this insurance but does authorise ‘Professional Insurance Agents Limited’ to seek terms on my/our behalf from insurers including current insurers if any.

Signed: Dated:

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