What an Online Broker Does, and Why Its Client Agreement Matters

1.1An online broker in one paragraph

An online broker takes its clients’ orders to buy and sell investments in an app, and passes each one to a bank, which carries it out on an exchange. This workbook follows one broker, Thalvia, and the terms its clients accept, called the Client Agreement. You are a trainee advocate (Cyprus’s trainee lawyer) in the financial regulation team of a Limassol law firm. Your firm acts for the broker and drafts those terms.

1.2Why the broker, its clients and its bank each want the deal

Thalvia earns a fee on each order and never buys or sells for itself. Its business rests on three things:

• A small fee on many small orders: €2 for each one.
• No price risk, because it holds no investments of its own.
• One licence that works in 30 European countries.

Its clients are people investing their own savings. They want:

• Shares and funds from across Europe, bought on their phone.
• A small fixed fee that they know before they order.
• Their money and investments kept apart from the broker’s own.

Thalvia does not carry out the orders itself. Holmbrecht, a bank in Frankfurt, is its executing bank: the bank that carries out each order on the exchange. Holmbrecht wants:

• A steady flow of orders, and fees from Thalvia for carrying them out and holding the clients’ investments.
• All of that without having to find the clients itself.

The regulator has its own interest. The Cyprus Securities and Exchange Commission (CySEC) licensed Thalvia and supervises it. It wants clients to know what they buy and what they pay. It also wants their assets safe if the broker fails.

1.3Thalvia’s launch

CySEC licensed Thalvia in March 2026. The licence covers two services. Thalvia receives orders and passes them on, and it keeps clients’ investments safe, which the law calls safekeeping. Holmbrecht holds the investments for Thalvia.

Clients can buy three kinds of investment, all in euros:

• shares on the main euro-area exchanges;
• ETFs (exchange-traded funds), funds whose units trade on an exchange like shares;
• the leveraged notes (in full, leveraged and inverse exchange-traded notes).

Each leveraged note is a bank’s promise to pay a multiple of one day’s rise or fall in an index. An index measures a group of share prices. Several banks issue them. A note is only a promise, so a client also bears the risk that the issuing bank fails. Thalvia offers nothing else.

Thalvia opened to clients in Cyprus and Greece on 1 July 2026, and Germany follows on 1 November 2026. These are the people in this workbook, with your own team:

The Client Agreement in this workbook is the version that takes effect when Germany joins. It comes in three languages, and each version is equally valid. It opens with a box of key facts, which puts the deal on one screen:

Each line is a promise that a later clause makes in full. The fee is the simplest. A client who places 24 orders in a year pays €48 in fees. The tax and the costs inside a fund or note go to others, but the app shows them before each order.

1.4Why the Client Agreement exists

Thalvia needs a client agreement because the law requires one. MiFID II is the EU directive on markets in financial instruments (Directive 2014/65/EU), and it sets the rules for investment firms. A companion regulation, MiFIR, adds more. Delegated Regulation (EU) 2017/565 fills in the detail.

Its Article 58 requires a written agreement with each client. The agreement sets out each side’s essential rights and duties. It may be on paper or on another durable medium: a form the client can store and read again, and that nobody can change. Thalvia never meets its clients, so the agreement is made in the app:

Ticking the box and pressing the button is the client’s acceptance. No signature is needed. The PDF file is what the client keeps. A page in the app alone would fail clause 1.3’s own test, because it could be changed.

The agreement does a different job for each side:

• It tells the client the whole deal: what he pays, where his assets sit and how he leaves.
• It gives Thalvia the same terms for every client, written once.
• It shows CySEC in writing what Thalvia promises its clients.

1.5Who drafts what

Your firm drafts the Client Agreement and every change to it. CySEC may ask to see it, so every promise in it must be one that Thalvia can keep in its daily work. The chief executive and the product team ask for changes, such as a new country or a new feature in the app. The partner supervises your drafts, and Daphne checks each one before use.

1.6From licence to launch, and after

Thalvia’s road runs through six stages, and later chapters take them in turn:

1.7Your job

Your first task is a list of what a client sees before the first order. Each item must exist, appear in the app at the right moment and be in the client’s language. Start with these:

• The key facts box, which the client reads first.
• The Client Agreement, with Schedules 1 to 6, accepted in the app and sent as a file.
• The key information document, a short sheet on each ETF or note, before the client buys.
• The costs screen, showing the fee, any tax and any fund costs in euros.

Where an item is missing, or not in the client’s language, raise it with the partner.