Corporate governance
This part contains information about the measures taken by Atonline Limited (hereon "the Firm") to comply with several Corporate
Governance matters. The information is provided pursuant and in compliance with Paragraph 23 of "Directive DI144-2014-14 of The Cyprus Securities And Exchange Commission For The Prudential Supervision of Investment Firms", which transposes "Directive 2013/36/EU Of The European Parliament And Of The Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC". Both directives are presented here below.
We are also presenting the associated European Regulation 575/2013.
1
Country-by-country Reporting:

From 1 January 2015 Cypriot Investment Firms (hereon "CIFs") are required to disclose annually, specifying, by Member State and by third country in which it has an establishment, the following information on a consolidated basis for the financial year:

    a. name(s), nature of activities and geographical location
    b. turnover;
    c. number of employees on a full time equivalent basis;
    d. profit or loss before tax;
    e. tax on profit or loss;
    f. public subsidies received.

The information referred to here above shall be audited in accordance with the Auditors and Statutory Audits of Annual and Consolidated Accounts Law of 2009 and shall be published, where possible, as an annex to the annual financial statements or, where applicable, to the consolidated financial statements of the CIF concerned.

2
Public disclosure of return on assets:

CIFs must disclose in their annual report among the key indicators their return on assets, calculated as their net profit divided by their total balance sheet.

Our approach: Beginning with the Report and Financial Statements for the year ended 31 December 2015, the above stated information is disclosed in
the notes to the Financial Statements. The Firm's Report and Financial Statements can be made available upon request at clientservice@atonint.com.

3
Remuneration policies:
Remuneration policies:
a. where remuneration is performance related, the total amount of remuneration is based on a combination of the assessment of the performance of the individual and of the business unit concerned and of the overall results of the CIF and when assessing individual performance, financial and non-financial criteria are taken into account;
b. the assessment of the performance is set in a multi-year framework in order to ensure that the assessment process is based on long-term performance and that the actual payment of performance-based components of remuneration is spread over a period which takes account of the underlying business cycle of the CIF and its business risks;
c. the total variable remuneration does not limit the ability of the CIF to strengthen its capital base;
d. guaranteed variable remuneration is not consistent with sound risk management or the pay-for-performance principle and shall not be a part of prospective remuneration plans;
e. guaranteed variable remuneration is exceptional, occurs only when hiring new staff and where the CIF has a sound and strong capital base and is limited to the first year of employment;
f. fixed and variable components of total remuneration are appropriately balanced and the fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration components, including the possibility to pay no variable remuneration component;
g. CIFs must set the appropriate ratios between the fixed and the variable component of the total remuneration, whereby the following principles shall apply: 
  • the variable component shall not exceed 100 % of the fixed component of the total remuneration for each individual.
  • shareholders of the CIF may approve a higher maximum level of the ratio between the fixed and variable components of remuneration provided the overall level of the variable component shall not exceed 200 % of the fixed component of the total remuneration for each individual.
Any approval of a higher ratio in accordance with point (g)(ii) must be carried out in accordance with the following procedure:
  • the shareholders must act upon a detailed recommendation by the CIF giving the reasons for, and the scope of, an approval sought, including the number of staff affected, their functions and the expected impact on the requirement to maintain a sound capital base;
  • shareholders must act by a majority of at least 66 % provided that at least 50 % of the shares or equivalent ownership rights are represented or, failing that, must act by a majority of 75 % of the ownership rights represented;
  • the CIF must notify all shareholders of the CIF, providing a reasonable notice period in advance, that an approval under the first subparagraph of this point will be sought;
  • the CIF must, without delay, inform the Commission of the recommendation to its shareholders, including the proposed higher maximum ratio and the reasons therefore and must be able to demonstrate to the Commission that the proposed higher ratio does not conflict with the CIF's obligations under this Directive and under Regulation (EU) No 575/2013, having regard in particular to the CIF's own funds obligations;
  • the CIF must, without delay, inform the Commission of the decisions taken by its shareholders, including any approved higher maximum ratio pursuant to point (g)(ii), and the Commission must use the information received to benchmark the practices of CIFs in that regard. The Commission shall provide the European Banking Authority ("EBA") with that information and EBA shall publish it on an aggregate home Member State basis in a common reporting format;
  • staff who are directly concerned by the higher maximum levels of variable remuneration referred to in point (g)(ii) of this paragraph must not, where applicable, be allowed to exercise, directly or indirectly, any voting rights they may have as shareholders;
  • CIFs may apply the discount rate to a maximum of 25 % of total variable remuneration provided it is paid in instruments that are deferred for a period of not less than five years.
h. payments relating to the early termination of a contract reflect performance achieved over time and do not reward failure or misconduct;
I. remuneration packages relating to compensation or buy out from contracts in previous employment must align with the long-term interests of the CIF including retention, deferral, performance and clawback arrangements;
j. the measurement of performance used to calculate variable remuneration components or pools of variable remuneration components includes an adjustment for all types of current and future risks and takes into account the cost of the capital and the liquidity required;
k. the allocation of the variable remuneration components within the CIF must also take into account all types of current and future risks;
l. substantial portion, and in any event at least 50 %, of any variable remuneration must consist of a balance of the following:
  • shares or equivalent ownership interests, subject to the legal structure of the CIF concerned or share- linked instruments or equivalent non-cash instruments, in the case of a non-listed CIF;
  • (where possible, other instruments within the meaning of Article 52 [1] or 63 [2] of Regulation (EU) No 575/2013 or other instruments which can be fully converted to Common Equity Tier 1 instruments or written down, that in each case adequately reflect the credit quality of the CIF as a going concern and are appropriate to be used for the purposes of variable remuneration. 
The instruments referred to in this point must be subject to an appropriate retention policy designed to align incentives with the longer-term interests of the CIF. This point must be applied to both the portion of the variable remuneration component deferred in accordance with point (m) and the portion of the variable remuneration component not deferred;
m. a substantial portion, and in any event at least 40 %, of the variable remuneration component is deferred over a period which is not less than three to five years and is correctly aligned with the nature of the business, its risks and the activities of the member of staff in question.
Remuneration payable under deferral arrangements shall vest no faster than on a pro-rata basis. In the case of a variable remuneration component of a particularly high amount, at least 60 % of the amount shall be deferred. The length of the deferral period shall be established in accordance with the business cycle, the nature of the business, its risks and the activities of the member of staff in question;
n. the variable remuneration, including the deferred portion, is paid or vests only if it is sustainable according to the financial situation of the CIF as a whole, and justified on the basis of the performance of the CIF, the business unit and the individual concerned.
Without prejudice to the general principles of national contract and labour law, the total variable remuneration shall generally be considerably contracted where subdued or negative financial performance of the CIF occurs, taking into account both current remuneration and reductions in payouts of amounts previously earned, including through malus or clawback arrangements.
Up to 100 % of the total variable remuneration shall be subject to malus or clawback arrangements. CIFs must set specific criteria for the application of malus and clawback. Such criteria shall in particular cover situations where the staff member:
  • participated in or was responsible for conduct which resulted in significant losses to the CIF;
  • failed to meet appropriate standards of fitness and propriety;
o. the pension policy is in line with the business strategy, objectives, values and longterm interests of the CIF.
If the employee leaves the CIF before retirement, discretionary pension benefits shall be held by the CIF for a period of five years in the form of instruments referred to in point (l). Where an employee reaches retirement, discretionary pension benefits must be paid to the employee in the form of instruments referred to in point (l) subject to a five-year retention period;
p. staff members are required to undertake not to use personal hedging strategies or remuneration- and liability- related insurance to undermine the risk alignment effects embedded in their remuneration arrangements;
q. variable remuneration is not paid through vehicles or methods that facilitate the noncompliance with this Directive or Regulation (EU) No 575/2013.
Our approach: Atonline Limited complies with all the requirements stated here above. In particular:
  • In relation to points (a) and (b) hereabove, the performance appraisal process is geared in such a way as to force the discipline on the assessor to take into account the performance of the business unit and the Firm, in addition to the performance of the individual concerned and also to take into account qualitative factors such as punctuality and the number of justified complaints launched against the appraise. In addition, the appraisal process is set in a multi-year framework, currently spanning over the last three (3) years.
  • In order to ensure that the principles of point (c) hereabove are met (the total variable remuneration does not limit the ability of the CIF to strengthen its capital base), the remuneration committee, which is entrusted with the duty of approving any variable remuneration component, is advised by the Head of the Risk Management Department, who is explicitly entrusted with the task, among others, of confirming that the total amount of proposed variable remuneration does not impede the ability of the CIF to strengthen its capital base.
  • In relation to guaranteed variable remuneration (points (d) and (e) hereabove), it is indeed treated as exceptional, and it is subjected to approval by: 
    • the General Manager or the Chief Operations / Financial Officer of the Firm, in case the proposed payment does not satisfy the Proportionality Conditions [3] 
    • the Remuneration Committee, in cases where the Proportionality Conditions are satisfied. In such cases, an extraordinary meeting of the Remuneration Committee is called to deliberate on the matter. If the Remuneration Committee approves the payment of the sign-up bonus, the decision must be ratified by the Board of Directors.
  • In relation to points (f) and (g) hereabove, the Firm adopts a two-branched approach, which on the one hand tries to ensure that the fixed element of remuneration is reasonable, thus reducing the possibility that members of staff will be induced to supplement their fixed salaries by resorting to extreme risk taking behavior in the hope of being rewarded with bonus payment, and on the other hand, sets indicative ratios of variable remuneration vs fixed remuneration. The salaries of members of staff (fixed remuneration) are reviewed at a bi-annual frequency, to ensure that they reflect any rise in the cost of living and that in general, they remain reasonable given the duties and responsibilities of each employee. In relation to the ratios of variable remuneration vis-Ё¤-vis fixed remuneration, they are well below the level of 100% stated in point (g)(i) hereabove, and thus it is very doubtful that the conditions of points (g)(ii) and (g)(iii) will ever be activated. The ratios of variable remuneration vis-Ё¤-vis fixed remuneration are subject to annual review to ensure that they are effective in relation to their intended purpose.
  • In relation to points (l) (retained shares or other instruments), (m) (deferral) and (n) (performance adjustment) hereabove, based on the logic that such measures would be grossly disproportionate in relation to the payment of small bonus payments (which is usually our case), we introduced certain proportionality conditions for the application of these principles. The current proportionality conditions are:
    • The variable remuneration is more than thirty three percent (33%) of total remuneration , and
    • Total remuneration is more than six hundred thousand Euro (€600.000)

3
Remuneration Committee
CIFs which are significant in terms of their size, internal organisation and the nature, the scope and the complexity of their activities, must establish a remuneration committee.

The remuneration committee must be constituted in such a way as to enable it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk, capital and liquidity.

The remuneration committee must be responsible for the preparation of decisions regarding remuneration, including those which have implications for the risk and risk management of the CIF concerned and which are to be taken by the board of directors.

The Chair and the members of the remuneration committee must be members of the board of directors who do not perform any executive function in the CIF concerned. If employee representation on the board of directors is provided for by Cyprus law, the remuneration committee shall include one or more employee representatives. When preparing such decisions, the remuneration committee shall take into account the long-term interests of shareholders, investors and other stakeholders in the CIF and the public interest.

Our approach: The Firm has been adjudged by the Cyprus Securities and Exchange Commission to be a "significant CIF" and as such, it has established a Remuneration Committee, comprised of the Firm's non-executive directors. The Remuneration Committee is responsible for:
  • setting the general principles of the Remuneration Policy and making proposals to the Board of Directors as to the actual remuneration of the persons that are subject to the Remuneration Policy.
  • directly overseeing the remuneration of the senior officers in the risk management and compliance functions