Conflicts of Interest Policy

Trek Labs Europe Ltd. dba Backpack EU

CONFLICTS OF INTEREST POLICY

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1. Introduction and Scope

2 Backpack EU is a brand name owned and operated by Trek Labs Europe Ltd (formerly FTX EU and FTX EU Ltd, respectively) (hereinafter referred to as the “Company,” “Backpack EU,” “us,” or “we”), a company incorporated in Cyprus with registration number HE 335683 and authorised by the Cyprus Securities and Exchange Commission (“CySEC”) under license no. 273/15, with registered address at Aiolou & Panagioti Diomidous 9, Katholiki, 3020 Limassol, Cyprus.

This Conflicts of Interest Policy (the “Policy”) contains information on how the Company identifies, manages and where possible, mitigates, or where applicable, discloses any conflicts of interest which may arise during the course of the business relationship between the Company and its Clients..

The Company is committed to act honestly, fairly and professionally, and in the best interests of its Clients, and to abide by the principles set out in the applicable legislation.

This Policy is not intended to, and does not create third-party rights or duties that would not already exist if the Policy had not been made available.

2. Regulatory Framework

This Conflicts of Interest Policy is issued pursuant to, and in compliance with the requirements of:

• Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments, as amended from time to time (‘’MiFID II ’);

• The Law 87(I)/2017 regarding the provision of financial services, the exercise of investment activities and the operation of regulated markets and other related matters, as amended from time to time (the ‘’Law’);

• The Commission Delegated Regulation (EU) 2017/565, supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive;

• Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (“Market Abuse Regulation”);

In accordance with the Commission Delegated Regulation (EU) 2017/565, Investment Firms are required to establish, implement and maintain an effective conflicts of interest policy set out in writing and appropriate to the size and organisation of the Investment Firm and the nature, scale and complexity of its business.

In addition, according to the Law, Investment Firms must take all appropriate steps to identify conflicts of interest between

• itself, including its managers and employees, tied agents or other relevant persons, as well as any person directly or indirectly linked to them by control, Backpack EU is a brand name of Trek Labs Europe Ltd (formerly FTX EU Ltd, referred to as “FTX EU”), a company regulated by the Cyprus Securities and Exchange Commission under license no. 273/15, with registered address at Aiolou & Panagioti Diomidous 9, Katholiki, 3020 Limassol, Cyprus.

• their Clients or

• between one client and another,

that arise in the course of providing any investment and ancillary services, including those caused by the receipt of inducements from third parties or by the Company’s own remuneration and other incentive structures.

In this respect, Investment Firms must establish adequate policies and procedures sufficient to ensure compliance, including its managers, employees, tied agents and other relevant person(s), with its obligations pursuant to the Law and the directives issued pursuant to this Law, as well as appropriate rules governing personal transactions by such persons. The conflicts of interest policy established in accordance with the above legal acts shall include the following content:

• it must identify, with reference to the specific investment services and activities and ancillary services carried out by or on behalf of the investment firm, the circumstances which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of one or more Clients;

• It must specify procedures to be followed and measures, including controlled access and permissions within our systems, granted to authorized personnel as necessary and subject to management approval, in order to manage such conflicts.

This procedure is aimed to:

• prevent or control the exchange of information between relevant persons engaged in activities involving a risk of a conflict of interest where the exchange of that information may harm the interests of one or more Clients;

• ensure the separate supervision of relevant persons whose principal functions involve carrying out activities on behalf of, or providing services to, Clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the Company;

• remove of any direct link between the remuneration of relevant persons principally engaged in one activity and the remuneration of, or revenues generated by, different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities;

• ensure measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out investment or ancillary services or activities;

• ensure measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate investment or ancillary services or activities where such involvement may impair the proper management of conflicts of interest.

The process entails the following actions:

• Identification of conflicts of interest situations

• Prevention and management of conflicts of Interest situations

• Disclosure of conflicts of interest in cases such situations cannot be contained.

• Keeping and updating records of identified conflict situations Definitions: 'Relevant person' in relation to the Company means any of the following persons:

• Member of the board of directors, partner or equivalent, manager or tied agent of the Company;

• A member of the board of directors, partner or equivalent, or manager of any tied agent of the Company;

• An employee of the Company or of a tied agent of the Company, as well as any other natural person whose services are placed at the disposal and under the control of the Company or a tied agent of the Company who is involved in the provision by the Company of investment services or/ and the performance of investment activities;

• A natural person who is directly involved in the provision of services to the Company or to its tied agent under an outsourcing arrangement for the purpose of the provision by the Company of investment services or/and the performance of investment activities.

3. Identification of Conflicts of Interest Situations

A conflict of interest is a situation, arising in any area of the Company’s business, where the Company or an employee of the Company is in a position to exploit a professional or official capacity in some way which may benefit the Company, or an employee of the Company, or a client of the Company, whilst potentially damaging the interest of another client of the Company.

The affected parties where conflicts of interest arise can be between the Company, its employees or its clients. More specifically, a conflict of interest may arise, between the following parties:

• Between the Client and the Company (or other companies within the same group., the employees and directors);

• Between two Clients of the Company;

• Between the Company and its employees;

• Between a Client of the Company and an employee/manager of the Company.

The Company offers a variety of investment and ancillary services and is a member of a group of companies (“the Backpack Group”) which includes offering of services outside of the European Union. Generally, it is not feasible to define precisely or create an exhaustive list of all the revenant conflicts of interest that may arise, as per the current nature, scale and complexity of the Company’s business. However, the following list includes circumstances identified by the Company which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of one or more Clients, as a result of providing investment or ancillary services:

• Conflicts in dealing in any capacity;

• Conflicts associated with holding confidential information;

• Conflicts associated with misuse of inside information;

• Conflicts arising out of the charges of fees and commissions;

• Conflicts in the Company’s business relations with the issuers of financial instruments or non-financial instruments;

• Conflicts arising out of the group structure; ● Conflicts arising in relation to inducements;

• Conflicts associated with performance-related remuneration of employees;

• Conflicts arising from personal transactions of employees For the purposes of identifying the types of conflicts of interest that arise in the course of providing investment services or a combination thereof and whose existence may damage the interests of a client, the Company takes into account, by way of minimum criteria, the question of whether the Company itself or a relevant person, or a person directly or indirectly linked by control to the Company is in any of the following situations, whether as a result of providing investment or ancillary services or investment activities or otherwise:

• The Company or that person is likely to make a financial gain, or avoid a financial loss, at the expense of the client;

• The Company or that person is interested in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client's interests;

• The Company or that person has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client;

• The Company or that person carries on the same business as the client;

• The Company or that person receives or will receive from a person other than the client an inducement in relation to a service provided to the client, in the form of money, goods or services, other than the standard commission or fee for that service;

• The Company or that person has a relation with the issuers of the products, e.g. close family relation;

• The Company or that person keeps investor accounts in other investment firms without the prior authorization from the Company;

• The Company or that person hides information from investors which they have right or access to;

• The Company or that person uses inside information or non-public proprietary information for own purposes;

• Use inside information or non-public proprietary information to manipulate or take advantage of such information;

• The Company or that person discloses inside information to other Company personnel who are not authorized to it.

In addition, the Company’s employees are prohibited from misusing “inside” information. Indicative cases of conflict of interests are listed below:

• Entering into unnecessary and unprofitable transactions for the client so as to increase the amount of commission and other fees

  • This can happen in auto-liquidation situations. The Company will mitigate this risk by only liquidating sufficient funds in order to reach the maintenance margin. Positions will not automatically be liquidated fully unless necessary.

• Using confidential information provided by the client for the Company’s own benefits or benefits of its employees or third parties.

The following procedure sets out actions for avoidance and resolution of conflicts of interest situations by the Company. The procedure is communicated to all members of the Company and includes measures specifically required by CySEC and the Company.

4. Reporting Conflicts of Interest

In the case of identification of a possible conflict of interest, a staff member must refer it initially to their immediate supervisor to assist in the assessment of a risk of damage and send to the Company’s Head of Compliance a completed Conflict of Interest Notification Form together with full details (i.e. under what grounds he/ she believes the conflict of interest arises) to allow regulatory scrutiny, of:

• Corrective and preventing actions;

• How these actions were considered appropriate;

• Any conditions imposed; and

• Whether there are still ongoing conflicts, how these are being managed and advised to the client.

Based on the above it is the Management role to adopt a holistic view to ensure the identification of potential and emerging conflicts within and across business lines and support an independent review of the processes and procedures in place.

5. Managing Conflicts of Interest

In general, the procedures and controls that the Company follows to manage any identified conflicts include the following, but not limited to, measures (non-exhaustive list of measures):

5.1 Disclosure

The employees of the Company are obliged to disclose all business interests before commencing their employment with the Company and are under an obligation to update the Company of any changes to such business interests throughout their employment with the Company.

5.2 Independence

The following measures have been adopted by the Company for ensuring the requisite degree of independence:

• Measures to prevent or control the exchange of information between relevant persons engaged in activities involving a risk of a conflict of interest (i.e. by establishing a Chinese Wall).

• Separate supervision of relevant persons whose principal functions involve carrying out activities on behalf of, or providing services to, Clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the Company. The Company’s department whose interests may conflict with Clients is the Market Surveillance Department and/ or the Marketing Department.

• Removal of any direct link between the remuneration of relevant persons principally engaged with one activity and the remuneration of, or revenues generated by, different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities:

  • When the Company’s Management decides to reward employees with a variable remuneration, the Company checks and ensures that (1) the annual variable remuneration of any employee cannot exceed his/her annual fixed remuneration; (2) that the variable remuneration package does not lead to aggressive behaviour that might be for the detriment of Clients.

  • The Compliance Officer is required to approve all variable remuneration schemes, and the Company is required to disclose or make readily available these schemes to all Clients as a measure of last resort where the effective organisational and administrative arrangements established by the Company to prevent or manage its conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the client will be prevented.

● Measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out and/or promotes investment or ancillary services or activities. Additionally, the person who decides or influences an individual’s bonus may exert undue influence over that individual’s integrity of judgement.

● Measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate investment or ancillary services or activities such as reception and transmission of Clients’ orders and tasks such as portfolio decision making and calculating performance, where such involvement may impair the proper management of conflicts of interest.

5.3 Chinese Wall

Chinese walls are information barriers which are used to prevent inside or highly confidential information possessed by one part of the business from being inappropriately passed to, or obtained by, another part of the business.

When a Chinese wall is used as a way of managing conflicts of interests, individuals on the other side of the wall will not be regarded as being in possession of knowledge denied to them as a result of the Chinese wall. For example, where arrangements have been put in place to ensure that entities belonging to the same group operate independently of each other with effective Chinese walls, the entities shall not be deemed to have knowledge of each other for conflicts of interest purposes.

The Company has taken appropriate measures to restrict the flow of information and data between the various business units within the Company. First and foremost, the Management bestowed upon the Compliance Department enough executive authority to establish and safeguard its independence from all other Departments within the Company. The Compliance Officer has unrestricted access to all information and to all Departments and reports directly to the Board of Directors and Four Eyes Committee (if applicable). The Company ensures that the provision/ receipt of inducements by the Company or relevant persons comply with the applicable inducements’ rules/ restrictions.

The Company has implemented Chinese walls around the following business areas:

• the Company and any group entity,

• Internal Audit Function, Risk Management Function and Compliance Function.

The Company has taken appropriate measures to restrict the flow of information between certain Departments / Functions within the Company. As a first step, the Management authorized the Compliance Department to establish and safeguard its independence from all other Departments / Functions within the Company. The Head of Compliance has unrestricted access to all information and to all Departments and reports directly to the Board of Directors and Four Eyes Committee (if applicable). The same applies to the Internal Auditor Function.

Persons and entities located within a Chinese wall are prohibited from inappropriately passing information to those outside the wall, except with the approval of the Company’s Head of Compliance where it is appropriate to the service being provided to the clients. More specifically, no person shall replace another person in his/ her duties without the prior consent and approval of the Compliance Officer in accordance with the Company’s Replacement Policy. Such a consent will be given by the Compliance Officer after all issues of possible conflict of interest have been reviewed.

The Company ensures that the provision/ receipt of inducements by the Company or relevant persons comply with the applicable inducements' rules/ restrictions.

In addition, the Company ensures that physical separation and relevant protocols (electronic means) are established such as - access rights in the trading platforms, restricted access to certain databases, electronic controls, practices and communication protocols - to prevent and control the simultaneous or sequential involvement of a relevant person in separate investment or ancillary services or activities where such involvement may impair the proper management of conflicts of interest, for the following business units:

• Compliance Department

• Back Office Function

• Accounting Department

• Brokerage Department

• Trading and own account

• Marketing Function

All control functions (i.e. the Compliance Officer, Risk Manager, Internal Auditor, External Auditor) are reporting directly to the Board of Directors and Four Eyes Committee and are strictly prohibited from making their annual and/ or other reports available to any employee, from any Department, prior to communicating the reports to the Board and Four Eyes Committee (if applicable) and obtaining their consent.

Additionally, the Company has in place non-disclosure and confidentiality agreements with all its Service Providers in relation to Clients’ personal data and information. Specifically, the dissemination of confidential information between the Company, its related parties and Services Providers is at all times subject to established information barriers.

6. Personal Transaction of Employees

All employees of the Company that are involved in activities that the Company is authorised to provide must be aware of the restrictions on personal transactions detailed below. This section also includes personal transactions which may be performed by persons who are employed by companies which perform an outsourced activity to the Company, if any. If any personal transactions are entered into by a relevant person as indicated above, the Company must be notified promptly.

For the purpose of this section, a personal transaction shall be a trade in a financial instrument effected by or on behalf of a relevant person, where at least one of the following criteria are met:

• the relevant person is acting outside the scope of the activities they carry out in their professional capacity;

• the trade is carried out for the account of any of the following persons:

  • The relevant person;

  • Any person with whom they have a family relationship, or with whom they have close links;

  • A person in respect of whom the relevant person has a direct or indirect material interest in the outcome of the trade, other than obtaining a fee or commission for the execution of the trade.

  Employees of the Company that are involved in the provision of investment services or other activities must not enter into the personal transactions which will cause the following:

• Enter into a transaction prohibited under the provisions of the Market Abuse Regulation,

• Misuse or cause improper disclosure of confidential information,

• Enter in a transaction that is likely to conflict with any obligations of the Company, or the employee, that are stated under the Law.

Where the employee has come into contact with information which is not publicly available to Clients or cannot readily be inferred from information that is so available, the employees must not act or undertake personal transactions or trade in the execution of an unsolicited client order, on behalf of any other person, including the Company.

The employees must not disclose any opinion other than in the normal course of business, if the person who is given the opinion is likely to enter into a transaction which is contrary to the above.

The employee also should not provide advice or provide to anyone any information, other than in the proper course of their employment, especially if it is clear that the person who is receiving such information will advise another party who might acquire or dispose of financial instruments to which that information relates.

Any client’s orders that have been relayed to any employees of the Company must not be disclosed to another party. An employee of the Company who has knowledge of a potential client’s order must not carry out a personal transaction that is the same as the client order, if this will cause a conflict of interest.

The Company shall keep records of the personal transactions notified to or identified by the Company, including any authorization or prohibition in connection with such transaction.

6.1 Disclosure of conflict of interest

When the measures taken by the Company to manage conflicts of interest are not sufficient to ensure, with reasonable confidence that risks of damage to Clients’ interest will be prevented, the Company proceeds with the disclosure of conflicts of interest to the client. Prior to carrying out a transaction or providing an investment or an ancillary service to a client, the Company must disclose any actual or potential conflict of interest to the client. The disclosure will be made in sufficient time and in a durable means and shall include sufficient detail, considering the nature of the client, to enable him to take an informed decision with respect to the investment or ancillary service in the context of which the conflict of interest arises.

Clients will be given the opportunity to decide on whether or not to continue their relationship with us with no unreasonable obstacles.

The Company shall ensure that disclosure to clients pursuant to this section is a measure of last resort that shall be used only where the effective arrangements established by the Company to prevent or manage its conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the client will be prevented.

The disclosure should:

• clearly state that the organizational and administrative arrangements established by the Company to prevent or manage that conflict are not sufficient to ensure, with reasonable confidence, that the risks of damage to the interests of the client will be prevented;

• include specific description of the conflicts of interest that arise in the provision of investment and/or ancillary services, considering the nature of the client to whom the disclosure is being made. The description shall explain in sufficient detail to enable that client to take an informed decision with respect to the investment or ancillary service in the context of which the conflicts of interest arise:

  • the general nature and sources of conflicts of interest;

  • the risks to the client that arise as a result of the conflicts of interest; and

  • the steps undertaken to mitigate these risks.

  In the event that the Company is unable to deal with a conflict of interest situation it shall revert to the client and in the cases where the line management cannot resolve a conflict to the satisfaction of all parties, the Head of Compliance, shall have the final say for the decision.

6.2 Record Keeping

The Company’s Head of Compliance keeps and regularly updates a record of the kinds of investment and ancillary service or investment activity carried out by or on behalf of the Company in which a conflict of interest entailing a risk of damage to the interests of one or more Clients has arisen or, in the case of an ongoing service or activity, may arise.

The following documentation shall be maintained for a minimum period of five (5) years: ● This Policy, any functional variations if applicable;

• The internal Conflicts Log and the Conflicts Identification and Management Report;

• Rules, procedures and processes;

• Training material and training records;

• Conflicts of Interest Notification Forms;

• Details of any review work carried out (including any decisions made on conflicts management); and

• Any other documentation used to demonstrate the management of conflicts of interest.

Senior management shall receive on a frequent basis, and at least annually, written reports on situations referred to in this section.

6.3 Responsibilities

The Company’s Executive Directors are responsible for clearly allocating responsibility and delegating authority to accountable individuals to ensure that those involved are aware of their involvement and that the Conflict Officer has a sufficient level of authority and independence in order to carry out their responsibilities effectively.

The Company’s Senior Management is required to:

• fully engage in the implementation of policies, procedures and arrangements for the identification, management and ongoing monitoring of conflicts of interest;

• adopt a holistic view to ensure the identification of potential and emerging conflicts within and across business lines;

• raise awareness and ensure compliance of relevant individuals by ensuring: regular training (including to contractors and third-party service providers’ staff) both at induction and in the form of refresher training; the clear communication of policies, procedures and expectations; that awareness of conflicts procedures forms part of the performance review/ appraisal process, and that the best practice is shared throughout the Company;

• sponsor robust systems and controls and effective regular reviews to ensure that strategies and controls used to manage and mitigate risks remain appropriate and effective and that appropriate warnings and disclosures are issued to clients where necessary;

• utilize management information to remain sufficiently up-to-date and informed; and

• support an independent review of the processes and procedures in place.

Individuals are required to identify new conflicts of interest arising out of the activities/services that they perform and engage in the process to notify line management upon identifying any potential conflict.

The Company’s Head of Compliance who is responsible for the day to day management of the implementation of this policy. In particular, he, or his delegate, is responsible for:

• establishing the policy in relation to conflicts of interest; ● providing training oversight and aid;

• monitoring compliance with arrangements;

• the oversight of conflicts management; ● maintaining records in relation to conflicts of interest;

• whether a conflict of interest should be disclosed in line with the principles of this policy;

• reviewing and challenging the identification of conflicts and implementing any management actions; and

• providing appropriate internal reporting to the Board of Directors.

Overall, the Compliance Officer will monitor the application and effectiveness of the present Policy on a regular basis and may amend the current Policy at any time if it is deemed appropriate and necessary. The review will be carried out at least annually and the Company’s Senior Management shall take all appropriate measures to address any deficiencies which might be identified by the Compliance Officer.

7. Clients’ Consent

During the procedure of the Company entering into an agreement with the clients, for the provision of Investment and/or ancillary services, requests the clients’ consent to the application of the present Policy. Following the clients’ consent, the Company is authorized and able to deal with the clients in any manner the Company considers appropriate, notwithstanding any conflicts of interest or the existence of any material interest within transactions, without prior reference to the clients.

8. Review of the Policy

The Company reserves the right to amend the current Policy at its discretion and at any time it considers is suitable and appropriate.

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Risk warning: Our products are traded on margin and carry a high level of risk and it is possible to lose all of your capital. Please consider our Risk Disclosure.

Legal: This website is operated by Trek Labs Europe Ltd (formerly FTX EU Ltd), registration number HE335683, with registered address at Aiolou & Panagioti Diomidous 9, Katholiki, 3020 Limassol, Cyprus. Trek Labs Europe Ltd (formerly FTX EU Ltd) is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 273/15.

The company operates through https://eu.backpack.exchange (formerly http://www.ftx.com/eu and https://ftxeurope.eu) and uses the trade name Backpack EU (formerly FTX EU).