Suitability and Appropriateness Policy

Suitability And Appropriateness Policy

Monolith Private Wealth Limited

Regulated by the Financial Services Commission of Mauritius

1. Purpose and Scope

1.1 Purpose

This Suitability and Appropriateness Policy (the “Policy”) establishes the framework by which Monolith Private Wealth Limited (“MPW” or the “Company”) discharges its obligations under the FSC Code of Business Conduct (in particular Guiding Principle 4.4 — Communicating with Customers) and the Securities Act 2005 to: (i) know its customers; (ii) assess whether the services and securities it provides or recommends are suitable for the client; and (iii) where suitability is not assessed, evaluate the appropriateness of the service to the client's knowledge and experience.

This Policy gives effect to the obligation set out in the Internal Operations Manual (“IOM”) of the Company that MPW shall not provide securities business advice to, or effect any discretionary transaction with or for, a client unless such advice or transaction is suitable for the client, taking into account the facts disclosed by the client and any other relevant facts concerning the client of which MPW is, or ought reasonably to be, aware.

1.2 Scope

This Policy applies to all services provided by MPW within the scope of its FSC licences, namely:

• Investment Advisory Services (under the Investment Adviser (Unrestricted) Licence);

• Management of portfolios of clients for securities transactions under a defined mandate (whether discretionary or non-discretionary);

• Intermediation in securities transactions; and

• Reception, transmission, and execution of securities orders on behalf of clients (under the Investment Dealer Licence).

This Policy applies regardless of the channel through which services are provided (online platform, mobile application, or otherwise) and regardless of the medium through which client information is collected or communications are made.

2. Regulatory Framework

This Policy is adopted in compliance with, and shall be read in conjunction with, the following principal instruments:

• Securities Act 2005 — Establishes the licensing framework for investment dealers and investment advisers and the statutory classification of investors as "retail investors" or "sophisticated investors".

• Securities Act 2005, Section 2 — Defines "sophisticated investor" (institutional categories listed in paragraphs (a) to (l) and (n); self-warranted category in paragraph (m)).

• Securities Act 2005, Section 31 — Restricts solicitation of retail investors to licensed intermediaries; sophisticated investors are excluded from the solicitation restrictions.

• Financial Services Act 2007 — Establishes the FSC's regulatory mandate and licensee conduct obligations.

• FSC Code of Business Conduct (issued under FSA s.7(1)(a), effective 1 January 2016) — In particular Guiding Principle 4.4 on Communicating with Customers, which requires licensees to seek information about clients' individual circumstances and financial objectives, to fulfil suitability requirements, and to provide accurate and timely information enabling informed decisions.

• MPW Internal Operations Manual — Order Execution Policy duties and conduct standards.

• MPW Client Categorisation Policy — Defines client classification and the protections applicable to each category.

3. Key Concepts and Definitions

For the purposes of this Policy, the following terms shall have the meanings ascribed below:

“Appropriateness” A more limited assessment of whether the client has the necessary knowledge and experience to understand the risks of a specific securities transaction or service, applied where MPW provides execution-only or reception-and-transmission services in respect of complex or non-straightforward products, without giving advice.

“Client Investment Profile” or

“CIP” The structured record maintained by MPW for each client documenting the outcomes of the suitability or appropriateness assessment, used to support recommendations and transactions and reviewed periodically.

“Complex Product” A securities or derivative instrument that is not a straightforward instrument. Indicative criteria include: (a) leveraged instruments (i.e., CFDs, futures, options written, margin products, etc.); (b) structured products with embedded derivatives or non-linear pay-offs; (c) instruments not admitted to a regulated market; (d) instruments with limited or no liquidity; (e) instruments where capital is not protected; and (f) any other instrument designated as complex by the Compliance Officer or by the FSC.

“Execution-only Service” A service where MPW receives, transmits, or executes a client order without making any personal recommendation and without providing advice. The client retains full responsibility for the investment decision.

“Non-Complex Product” means Straightforward Product.

“Personal Recommendation” A recommendation, presented as suitable for the client (or based on the client's circumstances), of one or more securities, transactions, or strategies. A personal recommendation triggers a full suitability assessment under this Policy.

“Retail Investor” An investor who is not a sophisticated investor within the meaning of the Securities Act 2005 and who falls within the category of investors specified in any FSC Rules made for that purpose.

“Sophisticated Investor” Has the meaning ascribed in Section 2 of the Securities Act 2005, including the institutional categories listed in paragraphs (a) to (l), the warranted category in paragraph (m) (business activity / net worth > USD 1m for natural persons / AUM > USD 5m for institutions), and any person declared a sophisticated investor by the FSC under paragraph (n).

“Straightforward Product” Includes shares admitted to trading on a regulated market, money-market instruments, and units of UCITS-equivalent collective investment schemes, where the instrument does not involve any actual or potential liability for the client beyond the cost of acquisition, and where adequate information is publicly available.

“Suitability” An assessment of whether a specific investment service, securities transaction, or strategy is suitable for the client, considering the client's investment objectives, financial situation, knowledge and experience, and ability to bear losses. Suitability is required whenever MPW provides a personal recommendation or carries out a discretionary transaction on behalf of the client.

4. Service Map — Suitability vs Appropriateness vs Execution-Only

The level of assessment required depends on the service being provided and the type of instrument involved. The following matrix sets out the framework that MPW applies:

5. The Suitability Assessment (Retail Investors)

For retail investors receiving investment advice, discretionary portfolio management, non-discretionary portfolio management, or intermediation with a recommendation, MPW shall conduct a full suitability assessment before providing the service and before the client enters into a securities transaction based on the recommendation.

5.1 Information to be Collected

The suitability assessment is built on information gathered through the Client Investment Profile questionnaire completed at onboarding via the online platform or mobile application and updated thereafter. The CIP shall collect at minimum:

5.1.1 Investment Objectives

Primary purpose of investing (e.g., capital preservation, income generation, capital growth, retirement planning, speculation);

• Investment horizon — short term (< 2 years), medium term (2-5 years), long term (> 5 years);

• Targeted return expectations (range);

• Risk tolerance — conservative / balanced / growth / aggressive (with descriptive anchors);

• Liquidity needs — whether the client may need to access funds at short notice;

• Other — any specific exclusions or ethical / religious preferences.

5.1.2 Financial Situation and Ability to Bear Losses

Source of regular income and stability of income;

• Estimated annual income and net worth (ranges acceptable, supported by KYC documentation);

• Regular financial commitments (mortgage, loans, dependents);

• Liquid net worth available for investing — i.e., funds not required for living expenses or short-term commitments;

• Maximum financial loss the client could bear without materially affecting their standard of living (expressed in monetary amount or percentage of investable assets);

• Existing investment portfolio, where disclosed by the client;

• Tax residency and any tax considerations affecting the recommendation.

5.1.3 Knowledge and Experience

Highest level of education attained;

• Current or most recent occupation and any professional financial qualifications;

• Familiarity with each product category MPW offers (e.g., listed equities, bonds, ETFs, mutual funds, CFDs, FX, derivatives) — none, basic, intermediate, advanced;

• Frequency and volume of past trading by product category over the last 5 years;

• Period during which the client has been active in investing;

• Self-assessment of understanding of key concepts (leverage, margin, volatility, market vs limit orders, diversification).

5.2 How the Assessment Is Conducted

The suitability assessment is conducted as follows:

Collection: At onboarding, the client completes the CIP questionnaire through the online platform, mobile application or provided form. The questionnaire includes attention-checking and consistency-checking questions designed to detect inconsistent or non-genuine responses.

Validation: The questionnaire system automatically flags inconsistencies (e.g., a self-declared “advanced” knowledge level paired with answers indicating misunderstanding of basic concepts). Flagged profiles are reviewed manually by an appropriately qualified employee of the Investment Advisory Team before the client is permitted to access advisory or discretionary services.

Categorisation: Based on the responses, the system assigns the client a Suitability Profile — Conservative, Moderate, Balanced, Growth, or Aggressive — and identifies the product categories considered suitable, those considered unsuitable, and those requiring additional warnings.

Client Confirmation: The client is shown a summary of the Suitability Profile and is required to electronically confirm acceptance of the profile before it takes effect.

Record: The completed CIP, supporting evidence, and the assigned Suitability Profile are stored in the client file in accordance with Section 9 of this Policy.

5.3 Suitability Determination

In assessing the suitability of a service or transaction for a particular client, MPW shall ensure that:

• The service or transaction is consistent with the client's investment objectives, including the client's risk tolerance and investment horizon;

• The client is able financially to bear any related investment risks consistent with their investment objectives and ability to bear losses; and

• The client has the necessary experience and knowledge in order to understand the risks involved in the service or transaction.

If any of the above three tests is not satisfied, the service or transaction is not suitable for the client, and MPW shall not provide the recommendation or, in the case of discretionary management, shall not effect the transaction.

5.4 Where Suitability Cannot Be Determined

Where the client refuses to provide, or provides insufficient information for, the suitability assessment, MPW shall:

• Provide the client with a clear written warning, through the platform or by email, that without the necessary information MPW is unable to determine whether the service or transaction is suitable;

• Decline to provide investment advice or to effect a discretionary transaction;

• Permit the client to access execution-only services where this is consistent with this Policy and the Client Categorisation Policy; and

• Record the warning issued and the client's response in the CIP and client file.

Critical: MPW shall NOT proceed with the provision of a personal recommendation or discretionary transaction simply because the client requests it, where the suitability assessment cannot be completed or where the assessment indicates that the service or transaction is unsuitable. The duty of suitability and appropriateness applies to the Company regardless of client insistence.

5.5 Ongoing Suitability — Discretionary and Advisory Mandates

For clients with discretionary or non-discretionary portfolio management mandates, suitability is not a one-time assessment. MPW shall:

• Periodically review the client's CIP at least annually, or sooner where a material change occurs;

• Review the portfolio's alignment with the Suitability Profile on a quarterly basis and rebalance as appropriate;

• Send the client an annual suitability statement confirming how the services provided remain suitable, in accordance with FSC Code Principle 4.4.2 on the provision of accurate, timely, and comprehensible information; and

• Prompt the client to update their CIP upon any material change in their circumstances of which MPW becomes aware (e.g., notification through the platform of a change of employment, change of marital status, retirement, inheritance).

6. Suitability Treatment of Sophisticated Investors

Under Section 2 of the Securities Act 2005, sophisticated investors are presumed to possess the necessary knowledge and experience to understand the risks involved in securities transactions. The FSC framework does not displace the broader suitability duty for clients who receive advice or discretionary management, but it permits a more proportionate assessment for sophisticated investors.

6.1 Threshold Confirmation

Before treating a client as a sophisticated investor for the purposes of this Policy, MPW shall confirm the client's status in accordance with the Client Categorisation Policy. For paragraph (m) sophisticated investors, this requires a signed Sophisticated Investor Declaration and Warranty supported by appropriate documentary evidence (i.e., audited financials, portfolio statements, or other evidence of the warranted facts).

6.2 Investment Objectives and Risk Tolerance

Even for sophisticated investors, MPW shall obtain and document the client's investment objectives, risk tolerance, and investment horizon before providing investment advice or discretionary management. This information is needed because: (a) sophistication relates to the client's ability to understand risks — it does not establish what the client's objectives are; and (b) a service that does not align with a sophisticated investor's stated objectives is still unsuitable, even if the investor understands the risks.

6.3 Reduced Knowledge-and-Experience Inquiry

For sophisticated investors, MPW may rely on the investor's status to satisfy the knowledge-and-experience element of the suitability test, without conducting the detailed product-by-product knowledge inquiry described in Section 5.1.3. The CIP for sophisticated investors shall therefore consist of:

• Confirmation of sophisticated investor status under the Securities Act 2005;

• Investment objectives and risk tolerance;

• Investment horizon and liquidity needs;

• Financial situation and ability to bear losses (collected to the extent necessary to satisfy the suitability obligation);

• Any specific exclusions or constraints; and

• Acknowledgement of the reduced inquiry made by MPW in light of the client's sophisticated investor status.

6.4 No Carve-Out for Manifest Unsuitability

Notwithstanding the more proportionate approach above, MPW shall not provide a recommendation to, or effect a discretionary transaction for, any sophisticated investor where the service or transaction is manifestly inconsistent with the investor's stated objectives or financial situation. The Compliance Officer shall review such cases prior to execution.

7. The Appropriateness Assessment

The appropriateness assessment applies where MPW provides execution-only or reception-and-transmission services to a retail investor in respect of complex products, without providing investment advice. The assessment evaluates whether the client has the knowledge and experience to understand the risks of the service or product.

7.1 When Appropriateness Applies

Retail investor accessing execution-only services in CFDs, FX, leveraged derivatives, structured products, or other complex products as defined in Section 3: appropriateness assessment is required.

Retail investor accessing execution-only services in straightforward products (e.g., listed shares of a major stock exchange, government bonds, UCITS-equivalent funds): no appropriateness assessment is required.

Sophisticated investor accessing execution-only services: no appropriateness assessment is required, but the client shall expressly acknowledge that the service is execution-only and no assessment has been made.

7.2 What the Appropriateness Assessment Covers

The appropriateness assessment is narrower than the suitability assessment. It focuses solely on the client's knowledge and experience and does not extend to the client's financial situation or investment objectives. MPW shall collect:

• Familiarity with the specific complex product category (e.g., CFDs, FX, options);

• Frequency and volume of past trading in the relevant product category;

• Period of activity in the relevant product category;

• Self-assessed understanding of the key risk features (leverage, margin call, total loss potential, market gapping); and

• Responses to product-specific knowledge questions presented through the platform (e.g., “What happens to your position if the market moves against you and your margin level falls below the maintenance margin?”).

7.3 Outcome of the Appropriateness Assessment

Based on the responses collected:

Limitation: An appropriateness warning given to a client does not transfer the obligation back to the client in a way that releases MPW from its conduct duties. MPW retains the duty to act with skill, care, and diligence (FSC Code Principle 4.1) and to manage conflicts of interest (Principle 4.3) regardless of any acknowledgment given by the client.

8. Risk Warnings and Product-Specific Disclosures

In addition to the suitability and appropriateness assessments, MPW provides the following risk warnings and disclosures, which form part of the overall investor-protection framework anchored in FSC Code Principle 4.4.2:

8.1 General Risk Disclosure

Before account activation, every client (retail and sophisticated) shall be presented with, and electronically accept, the Risk Disclosure Statement covering the general risks of investing, including market risk, liquidity risk, currency risk, counterparty risk, platform risk, and the risk that past performance is not a guide to future returns.

8.2 Product-Specific Risk Warnings

For each complex product category, MPW provides a product-specific risk warning displayed prominently within the platform before the client can access the product. The warning addresses the specific risks of the product, including (where applicable) leverage, the risk of losing more than the initial deposit, margin calls, stop-out levels, and overnight financing costs.

8.3 Mandatory Acknowledgment

Acceptance of risk warnings is captured electronically with a time-stamped audit trail, including IP address and device fingerprint. The acknowledgment is treated as durable medium evidence of the client's awareness of the risks at the time of acceptance.

9. Record Keeping

MPW shall maintain comprehensive records of the suitability and appropriateness assessments conducted for each client, to demonstrate compliance with the FSC Code of Business Conduct and to support audit and inspection by the FSC.

9.1 Records to be Maintained

The Company will keep records for each client of the following:

• Completed CIP questionnaire and any updates;

• Supporting documentation provided by the client (e.g., proof of income or investment experience);

• Assigned Suitability Profile and the rationale where manual intervention was required;

• All personal recommendations made to the client, with the supporting suitability analysis (“suitability report”) prepared in connection with each material recommendation;

• Records of any warnings issued (i.e., insufficient information, manifest unsuitability, inappropriate product) and the client's electronic acknowledgements;

• Outcomes of periodic reviews of the CIP;

• Annual suitability statements issued to discretionary and advisory mandate clients;

• Evidence of the client's sophisticated investor status, including signed declarations and supporting documents; and

• All communications between MPW and the client that relate to suitability or appropriateness, including in-app messages, emails, and chat transcripts.

9.2 Retention Period

All records relating to suitability and appropriateness shall be retained for a minimum period of seven (7) years from the date of the relevant event or the termination of the client relationship, in accordance with the record-keeping framework of the IOM (Section 4.9.1), the AML Manual, and Section 17(b) of FIAMLA 2002.

9.3 Format and Accessibility

Records shall be maintained in a durable, secure, electronic format, with appropriate access controls. Records shall be capable of being retrieved promptly upon request by the FSC, the Compliance Officer, the Board of Directors, or external auditors, and made available in a format that demonstrates the chronological development of the client's CIP over time.

10. Roles and Responsibilities

11. Monitoring and Continuous Improvement

11.1 First-Line Monitoring

The Investment Advisory Team and the Investment Dealer Team shall implement first-line controls including:

• Pre-trade checks within the platform that compare each transaction against the client's Suitability Profile and flag mismatches;

• Mandatory documentation of the suitability rationale for every material recommendation prior to it being delivered to the client;

• Periodic team reviews of recommendations made, with sampling overseen by the Head of Investment Advisory.

11.2 Second-Line Compliance Monitoring

The Compliance Officer shall conduct second-line monitoring including:

• Monthly sampling of CIP questionnaires (10% sample minimum) for completeness and quality;

• Monthly sampling of recommendations and transactions (5% sample minimum) for alignment with the client's Suitability Profile;

• Investigation of any complaint, internal alert, or external indication of a potential suitability failure;

• Quarterly suitability monitoring report to the CEO and the Board of Directors; and

• Annual independent compliance review of the entire suitability and appropriateness framework.

11.3 Continuous Improvement

Findings from monitoring shall be used to drive continuous improvement of:

• The CIP questionnaire (clarity, completeness, accuracy of categorisation);

• The matching logic between Suitability Profile and product categories;

• Training of client-facing staff;

• Risk warnings and product disclosures; and

• This Policy itself.

12. Training

All client-facing employees, including members of the Investment Advisory Team, the Investment Dealer Team, and the Customer Relations Team, shall complete:

• Initial training on this Policy upon joining MPW and before being assigned to any client-facing role;

• Annual refresher training covering the application of suitability and appropriateness rules, with case-study examples;

• Ad-hoc training upon any material amendment to this Policy or to applicable FSC regulation; and

• Product-specific training for any new product category introduced by MPW.

Training records shall be maintained by the Compliance Officer and shall be subject to audit. Failure to complete required training shall be a basis for restricting an employee from client-facing duties until completion.

13. Governance, Review and Updates

This Policy is owned by the Compliance Department and approved by the Board of Directors. It shall be reviewed at least annually, or earlier upon any of the following:

• Any material amendment to the Securities Act 2005, the Financial Services Act 2007, the FSC Code of Business Conduct, or related FSC rules and guidance;

• Issuance of any relevant Dear CEO letter, circular, or guidance note by the FSC;

• Material changes in MPW's product offering, client base, distribution model, or business strategy;

• Material findings from internal audit, compliance review, or FSC inspection;

• Recurring root-cause findings from suitability monitoring indicating the need for procedural change; and

• Any complaints data indicating systemic suitability issues.

Material amendments to this Policy shall be approved by the Board of Directors and communicated to all relevant employees through the Compliance function. Affected clients shall be informed of any change that materially alters the assessment framework or their position thereunder.

14. Interaction with Other MPW Policies

This Policy operates in conjunction with the following other MPW policies and procedures. In the event of any inconsistency between this Policy and another MPW policy, the Compliance Officer shall determine the prevailing position with reference to FSC requirements:

15. Legal Disclaimer

Disclaimer: This Policy has been prepared to support MPW's compliance with applicable Mauritius law and FSC regulation. It does not constitute legal advice and does not purport to be an exhaustive statement of MPW's obligations under all applicable regulation. Where any conflict arises between this Policy and applicable law, FSC rules, or FSC guidance, the law, rules, or guidance shall prevail. The Suitability and Appropriateness framework set out herein reflects the FSC's principles-based approach under the Code of Business Conduct and applicable expectations as understood at the date of this Policy; where the FSC issues further guidance or rules prescribing additional specificity, this Policy shall be updated accordingly.

Annex A — Indicative CIP Questionnaire Structure

The Client Investment Profile questionnaire shall be structured around the following sections. The questionnaire is delivered via the online platform and mobile application, with adaptive logic so that questions presented depend on prior responses.

Annex B — Suitability Profile Matrix

The following matrix sets out the standard Suitability Profiles applied by MPW and the indicative product categories considered suitable for each. The Compliance Officer may, with Board approval, refine the matrix periodically based on market conditions, product introductions, and monitoring findings.

This Suitability and Appropriateness Policy is to be read together with the Client Categorisation Policy, the KYC and Onboarding Requirements Notice, the Internal Operations Manual, and the AML/CFT/CPF Procedures Manual. All employees shall confirm understanding of this Policy as part of their onboarding and annual compliance training.