MiFID Information Brochure

MiFID Information Brochure

SMBC Nikko Capital Markets Europe GmbH

01 April 2021

Sitz der Gesellschaft: Neue Mainzer Str. 52-58, 60311 Frankfurt am Main, Deutschland Registergericht: Amtsgericht Frankfurt am Main, HRB 110304

Geschäftsführer: Naoki Okubo, Mats Carlström, Dr. Uwe Bischoff, Björn Alexander Senger Vorsitzender des Aufsichtsrats: Antony Yates

VAT-ID DE317644645

Contents

1. MiFID at SMBC Nikko Capital Markets Europe GmbH ...................................................... 5

2. Information about the financial services company and its investment banking services .... 6

2.1 Information about the financial institution ............................................................. 6

2.2 Information about services ................................................................................... 6

3. General Information on Financial Instruments and Related Risks ..................................... 8

3.1 Shares ................................................................................................................. 8

3.2 Bonds .................................................................................................................. 8

3.3 Derivatives ......................................................................................................... 10

3.4 Foreign markets ................................................................................................. 10

3.5 Collateral ........................................................................................................... 11

3.6 Commissions ..................................................................................................... 11

3.7 Suspensions of trading ...................................................................................... 11

3.8 Clearing house protections ................................................................................ 11

3.9 Insolvency ......................................................................................................... 11

4. Cost and Charges Disclosure .......................................................................................... 12

4.1 Costs and Charges ............................................................................................ 12

4.2 Product Specific Disclosures ............................................................................. 13

4.3 Derivatives Products Ex-Ante Costs & Charges Disclosure ............................... 13

4.4 Securities Products (“SPG”) Ex-Ante Costs & Charges Disclosure .................... 15

4.5 Other Matters to Note ........................................................................................ 17

5. Conflicts of Interest Policy ............................................................................................... 20

5.1 Purpose and short summary .............................................................................. 20

5.2 Scope ................................................................................................................ 20

5.3 Identifying Conflicts of Interest ........................................................................... 21

5.4 Procedures and Measures for Managing Conflicts of Interest ............................ 22

5.5 Disclosure of Conflicts of Interest ...................................................................... 23

5.6 General types of situations leading to conflicts of interest .................................. 24

5.7 Regulatory references ....................................................................................... 27

5.8 Record-keeping and approval ............................................................................ 27

5.9 Roles with respect to managing conflicts of interest ........................................... 27

5.10 Identification and management of transactional conflicts of interest. ................ 28

5.11 Training & Awareness ...................................................................................... 28

6. Order Execution Policy .................................................................................................... 29



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6.1 Introduction ........................................................................................................ 29

6.2 What is best execution ....................................................................................... 29

6.3 When does Best Execution apply? .................................................................... 30

6.4 Specific Instructions ........................................................................................... 31

6.5 Specific Instructions ........................................................................................... 32

6.6 Execution Venues we use ................................................................................. 32

6.7 Consent to execute away from a Regulated Market or MTF .............................. 33

6.8 Aggregation and allocation of orders ................................................................. 33

6.9 Monitoring and Notification ................................................................................ 34

6.10 Appendix for Order Execution: Asset Class Information ................................... 34

7. Product Governance ....................................................................................................... 42

7.1 SMBC Nikko as a Distributor ............................................................................. 42

7.2 Onward distribution ............................................................................................ 42

7.3 Proportionality Types ......................................................................................... 42

7.4 Appropriateness ................................................................................................ 42

7.5 Current product list and categorisation .............................................................. 43

8. Information about investment firm and Systematic Internaliser ....................................... 46

8.1 Scope ................................................................................................................ 46

8.2 Provision of quotes ............................................................................................ 46

8.3 Publication mechanism ...................................................................................... 46

8.4 Access to quotes ............................................................................................... 46

8.5 Access criteria ................................................................................................... 46

8.6 Quote validity ..................................................................................................... 47

8.7 Reporting Obligations ........................................................................................ 47

9. General Terms of Business ............................................................................................. 48

9.1 General Information ........................................................................................... 48

9.2 Client Categorisation ......................................................................................... 48

9.3 Applicable Regulations and Exchange Action .................................................... 49

9.4 Services............................................................................................................. 49

9.5 Appropriateness ................................................................................................ 50

9.6 Use of Brokers, Introductory, Arranging and Order Routing Services ................ 51

9.7 Third Party Services .......................................................................................... 52

9.8 Execution Policy ................................................................................................ 52

9.9 Order Execution ................................................................................................. 53

9.10 Direct Electronic Access .................................................................................. 53



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9.11 Instructions ...................................................................................................... 53

9.12 Unsettled Positions .......................................................................................... 54

9.13 Payment and Delivery ...................................................................................... 54

9.14 Position Limits ................................................................................................. 54

9.15 Short-selling .................................................................................................... 55

9.16 Power to Borrow or Buy Securities .................................................................. 55

9.17 No holding of Client Money or Client Assets .................................................... 55

9.18 Compensation Scheme ................................................................................... 55

9.19 Communications and Notices .......................................................................... 56

9.20 Reporting Trading Information ......................................................................... 56

9.21 Information provision ....................................................................................... 57

9.22 Your Representations, Warranties and Undertakings ...................................... 57

9.23 Appointment of an Agent ................................................................................. 58

9.24 Liability ............................................................................................................ 59

9.25 Indemnity ......................................................................................................... 59

9.26 Default ............................................................................................................. 60

9.27 Conflicts Policy ................................................................................................ 61

9.28 Client Reports .................................................................................................. 61

9.29 Fees, Charges and Payments ......................................................................... 61

9.30 Taxes .............................................................................................................. 62

9.31 Confidentiality and Privacy .............................................................................. 62

9.32 Termination ..................................................................................................... 62

9.33 General............................................................................................................ 62

9.34 Interpretation ................................................................................................... 64

10. Your Notes .................................................................................................................... 68



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Glossary

Term Definition

Compliance The Compliance Department of CMFRA

CMFRA SMBC Nikko Capital Markets Europe GmbH

Company CMFRA

DMA Direct Market Access

EEA European Economic Area

Management

Management means the senior management and department

heads of the respective companies

MAR Market Abuse Regulation

MiFID II Markets in Financial Instruments Directive

MiFIR Markets in Financial Instruments Regulation

MTF Multilateral Trading Facilities

OTF Organised Trading Facilities

RFP Request for Proposal

RFQ Request for Quote

ToSTNeT Tokyo Stock Exchange Trading Network

WpHG Wertpapierhandelsgesetz (Securities Trading Act)

5 Sitz der Gesellschaft: Neue Mainzer Str. 52-58, 60311 Frankfurt am Main, Deutschland

Registergericht: Amtsgericht Frankfurt am Main, HRB 110304 Geschäftsführer: Naoki Okubo, Mats Carlström, Dr. Uwe Bischoff, Björn Alexander Senger

Vorsitzender des Aufsichtsrats: Antony Yates VAT-ID DE317644645

1. MiFID at SMBC Nikko Capital Markets Europe GmbH

The Markets in Financial Instruments Regulation (“MIFIR”) and the Markets in Financial

Instruments Directive (“MIFID”), together “MIFID II”, enter into application on 3 January 2018.

MiFID II seeks to provide a European-wide legislative framework for regulating the operation

of financial markets in the EU. It represents a major overhaul of the existing law, building on

and extending the scope of the first Markets in Financial Instruments Directive, which originally

came into force in November 2007.

In broad terms, MiFID II is concerned with the framework of trading venues/structures in which

financial instruments are traded, whereas MiFIR focuses on regulating the operation of those

trading venues/structures, looking to processes, systems and governance measures adopted

by market participants and to their future supervision.

The Commission set out four objectives for the revised legislation:

strengthen investor protection

reduce the risks of a disorderly market

reduce systemic risks, and

increase the efficiency of financial markets and reduce unnecessary costs for

participants

In the following chapters there are a number of important informational and legal information

that we recommend you to read carefully.




2. Information about the financial services company and its

investment banking services

In accordance with the requirements of Art. 47 (1) of the Delegated Regulation (EU) 2017/565

and § 83 (5) WpHG, we hereby provide you with the following information about SMBC Nikko

Capital Markets Europe GmbH (“CMFRA” or “we”) and our investment services.

2.1 Information about the financial institution

SMBC Nikko Capital Markets Europe GmbH

Neue Mainzer Str. 52-58

60311 Frankfurt am Main

Germany

T: +49 (0)69 2222 9 850

SMBC Nikko Paris Branch

1-5 rue Paul Cézanne

75008 Paris

France

More information can be found at

http://www.de.smbcnikko-cm.com/

In case you have any questions regarding MiFID related topcis, please contact:

[email protected]

Intermediary

In connection with the provision of our services, we use contractually bound intermediaries

who are registered in the Federal Republic of Germany.

Banking permission

We hold a banking permission according to § 32 German Banking Act (Kreditwesengesetz).

Competent supervisory authority

Supervisory authority responsible for the authorisation: European Central Bank,

Sonnemannstraße 20, 60314 Frankfurt am Main (Internet: www.ecb.europa.eu ).

Supervisory authority responsible for consumer protection: Federal Financial Supervisory

Authority, Graurheindorfer Straße 108, 53117 Bonn, and Marie-Curie-Strasse 24-28, 60439

Frankfurt am Main, Germany. (Internet: www.bafin.de).

2.2 Information about services

SMBC Nikko Capital Markets Europe GmbH is a financial services company providing

specialist investment banking services, expert insights and innovative solutions in global

capital markets. We are a subsidiary of SMBC Nikko Securities Inc., one of the largest

securities companies in Japan and of Sumitomo Mitsui Banking Corporation, one of the largest

http://www.de.smbcnikko-cm.com/

http://www.bafin.de/




commercial banks in Japan. Therefore we are ideally positioned to provide our clients with

additional value as a partner for investments in the increasingly important Japanese financial

markets.

We do not offer investment advice. In the case of advisory-free business, you make your

investment decision independently of any investment recommendation on our part. In this case

we only obtain the necessary information about your knowledge and experience; this does not

include information about your investment objectives and financial circumstances.

CMFRA is committed to providing a wider range of high value-added financial products,

services and solutions in order to become a long-term strategic partner for all our clients. We

conduct all customary banking business (in particular securities and derivatives products) and

consists of three Business Units: Debt Capital Markets (DCM)/Equity Capital Markets (ECM),

Fixed Income Sales and Trading (FIST)/ Equity Sales and Trading (EST) and Derivatives

Products Group (DPG).




3. General Information on Financial Instruments and Related Risks

Please note that this notice cannot disclose all the risks and other significant aspects of trading

under the Terms. You should not deal in these products unless you understand their nature

and the extent of your exposure to risk. You should also be satisfied that the product is suitable

for you in the light of your circumstances and financial position.

3.1 Shares

A share is an instrument representing a shareholder’s rights in a company. Shares may be

issued in bearer or registered form and may be certificated or non-certificated. One share

represents a fraction of a corporation's share capital. Dividend payments and an increase in

the value of the security are both possible, although not guaranteed. The shareholder has

financial and ownership rights which are determined by law and the issuing company’s articles

of association. Unless otherwise provided, transfers of bearer shares do not entail any

formalities. However, transfers of registered shares are often subject to limitations.

Dealing in shares may involve risks including but not limited to the following:

Company Risk

Company risk: a share purchaser does not lend funds to the company, but becomes a co-

owner of the company. He or she thus participates in its development as well as in chances

for profits and losses, which makes it difficult to forecast the precise yield on such an

investment. An extreme case would be if the company went bankrupt, thereby wiping out the

total sums invested.

Price Risk

Share prices may undergo unforeseeable price fluctuations causing risks of loss. Price

increases and decreases in the short, medium and long-term alternate without it being

possible to determine the duration of those cycles. General market risk must be distinguished

from the specific risk attached to the company itself. Both risks, jointly or in aggregate,

influence share prices.

Dividend Risk

The dividend per share mainly depends on the issuing company's earnings and on its dividend

policy. In case of low profits or losses, dividend payments may be reduced or not made at all.

3.2 Bonds

A bond is a negotiable debt instrument issued in bearer or registered form by a company or a

government body to creditors and whose par value at issuance represents a fraction of the

total amount of the debt. The duration of the debt as well as the terms and conditions of

repayment are determined in advance. Unless stipulated otherwise, a bond is repaid either at

the maturity date, or by means of annual payments, or at different rates determined by drawing

lots. The interest payments on bonds may be either: (i) fixed for the entire duration; or (ii)




variable and often linked to reference rates, e.g.Interbank Offered Rate (IBOR)). The

purchaser of a bond (the creditor) has a claim against the issuer (the debtor).

Dealing in bonds may involve risks including but not limited to the following:

Insolvency risk:

The issuer may become temporarily or permanently insolvent, resulting in its incapacity to

repay the interest or redeem the bond. The solvency of an issuer may change due to one or

more of a range of factors depending on the issuing company, the issuer’s economic sector

and/or the political and economic status of the countries concerned. The deterioration of the

issuer’s solvency will influence the price of the securities that it issues.

Interest rate risk:

Uncertainty concerning interest rate movements means that purchasers of fixed-rate

securities carry the risk of a fall in the prices of the securities if interest rates rise. The longer

the duration of the loan and the lower the interest rate, the higher a bond's sensitivity to a rise

in the market rates.

Credit risk

The value of a bond will fall in the event of a default or reduced credit rating of the issuer.

Generally, the higher the relative rate of interest (that is, relative to the interest rate on a risk-

free security of similar maturity and interest rate structure), the higher the perceived credit risk

of the issuer.

Early redemption risk

The issuer of a bond may include a provision allowing early redemption of the bond if market

interest rates fall. Such early redemption may result in a change to the expected yield.

Risks specific to bonds redeemable by drawing:

Bonds redeemable by drawing have a maturity that is difficult to determine, so unexpected

changes in the yield on these bonds may occur.

Risks specific to certain types of bond

Additional risks may be associated with certain types of bond, for example floating rate notes,

reverse floating rate notes, zero coupon bonds, foreign currency bonds, convertible bonds,

reverse convertible notes, structured bonds, high yield bonds, indexed bonds and

subordinated bonds. For such bonds, you are advised to make inquiries about the risks

referred to in the issuance prospectus and not to purchase such securities before being certain

that all risks are fully understood. In the case of subordinated bonds, you are advised to

enquire about the ranking of the debenture compared with the issuer’s other debentures.

Indeed, if the issuer becomes bankrupt, those bonds will only be redeemed after repayment

of all higher ranked creditors and as such there is a risk that you will not be reimbursed. In the




case of reverse convertible notes, there is a risk that you will not be entirely reimbursed, but

will receive only an amount equivalent to the underlying securities at maturity.

3.3 Derivatives

A derivative is a type of financial instrument whose value is based upon the value of an

underlying asset, index, rate or reference point. Derivatives involve the transfer of risk from

one party to another. They can be used to limit a party's exposure to a variable or allow a party

to gain exposure to that variable.

Understanding the risk of derivative products:

You should not deal in derivative products unless you understand the nature of the contract

you are entering into and the extent of your exposure to risk. You should also be satisfied that

the contract is suitable for you in light of your circumstances and financial position. Although

derivatives can be utilised for the management of investment and liability risk, some of these

products are unsuitable for many investors. Derivative products will not always act in the same

way. Relationships with us may differ depending on the product and nature of the transaction,

and clearing houses may not always owe you a direct commitment. Different products involve

different levels of exposure to risk and in deciding whether to trade in such products you should

be aware of the following points.

Off-exchange transactions:

When trading financial derivative products with us, you will be entering into off exchange

derivative transactions. All positions entered into with us must be executed with us and cannot

be executed with any other entity. Transactions in off-exchange derivatives may involve

greater risk than investing in on-exchange derivatives because there is no exchange market

on which to close an open position. It may be impossible to liquidate an existing position, to

assess the value of the position arising from an off-exchange transaction or to assess the

exposure to risk. Bid prices and offer prices need not be quoted by us, and, even where they

are, we may find it difficult to establish a fair price, particularly when the relevant exchange or

market for the underlying is closed or suspended.

3.4 Exchange Risk

When investing in a currency other than euro, there is inevitably an exchange or currency risk.

The exchange risk is the probability that an adverse trend in the currency being invested in

will reduce the return of the investment. If the trend in the currency is adverse, the return will

be eroded following the shortfall in profit due to the conversion to euro. There is a risk that a

change in exchange rates between currencies may cause the investment or the income from

it to fall or rise.

3.5 Foreign markets

Foreign markets will involve different risks from the German market. In some cases the risks

will be greater. The potential for profit or loss from transactions on foreign markets or in foreign-

denominated contracts will be affected by fluctuations in foreign exchange rates.




3.6 Collateral

The way in which collateral will be treated will vary according to the type of transaction and

where such collateral is traded. There could be significant differences in the treatment of your

collateral, depending on whether you are trading on a recognised or designated investment

exchange, with the rules of that exchange (and the associated clearing house) applying, or

trading off-exchange. We reserve the right to implement a higher margining requirement than

the exchange. Deposited collateral may lose its identity as your property once dealings on

your behalf are undertaken. Even if your dealings should ultimately prove profitable, you may

not get back the same assets which you deposited, and may have to accept payment in cash.

3.7 Commissions

Before you begin to trade, you should obtain details of all commissions and other charges for

which you will be liable. If any charges are not expressed in money terms (but, for example,

as a percentage of contract value), you should obtain a clear and written explanation, including

appropriate examples, to establish what such charges are likely to mean in specific money

terms.

3.8 Suspensions of trading

Under certain trading conditions it may be difficult or impossible to liquidate a position. This

may occur, for example, at times of rapid price movement if the price rises or falls in one

trading session to such an extent that under the rules of the relevant exchange trading is

suspended or restricted. Placing a stop-loss order will not necessarily limit your losses to the

intended amounts, because market conditions may make it impossible to execute such an

order at the price stipulated.

3.9 Clearing house protections

On many exchanges, the performance of a transaction is ‘guaranteed’ by the exchange or

clearing house. However, this guarantee is unlikely in most circumstances to cover you, the

client, and may not protect you if we or another party defaults on its obligations to you.

Additionally, in relation to Derivatives Business, Transactions are not executed on any

exchange or through any clearing house; although if required in accordance with the EMIR,

Transactions will be cleared though a central counterparty.

3.10 Insolvency

Our insolvency or default, or that of any other brokers involved with your transaction, may lead

to positions being liquidated or closed out without your consent. In certain circumstances, you

may not get back the actual assets which you lodged as collateral and you may have to accept

any available payments in cash.




4. Cost and Charges Disclosure

In accordance with the Markets in Financial Instruments Directive (“MIFID II”) Articles 24 of

Directive 2014/65/EU and Articles 11 and 50 of MiFID II Delegated Regulation, this statement

provides ex-ante information on costs & charges related to the provision of Investment

Services and Activities or Ancillary Services as defined in MiFID II by SMBC Nikko Capital

Markets Europe GmbH (“CMFRA” or “we”) to its Clients.

CMFRA may act in different capacities and trade in a variety of markets and transactional

scenarios (e.g. executing of orders on behalf of clients, systematic internaliser, market maker,

liquidity provider, or primary issuer). As such, you may be charged in different ways for

different products or services you receive from us.

As permitted by MIFID II, given the investment services provided to professional clients and

eligible counterparties, CMFRA wherever possible will limit the application of the costs and

charges disclosure requirement including (but not limited to) the ex ante and ex post costs

cumulative disclosures and currency conversion as outlined in section 4.5 below.

MIFID II Costs and Charges obligations apply to transactions in ‘financial instruments’ as

defined under MIFID II. Costs and Charges associated with particular transaction, but to the

extent indicated may not reflect the Costs and Charges associated with any specific financial

instrument.

Price formation in CMFRA generally takes into account the following factors:

observable market prices,

executed transactions,

volatility data,

other market data,

internal models and

observable trade flows.

The final client price is generally determined by the application of Costs and Charges to

products to mid-price. The difference between the mid price and the final client price shall

generally be deemed to constitute the Costs and Charges to the client.

4.1 Costs and Charges

The Costs and Charges that CMFRA applies to financial instruments vary depending upon a

number of client specific and non-client specific factors. These factors can include but are not

limited to: the risk profile of the relevant business, client behaviour, counterparty credit risk,

funding costs, capital usage, margin costs, hedging costs and, where applicable, sales mark-

up or mark-down.

The following factors that may impact the level of Costs and Charges applied:




Credit support: Where a client has in place an ISDA and Credit Support Annex with

CMFRA, this may decrease the level of credit charges applied to derivatives falling

under the ISDA.

Clearing: Where derivatives entered into between the client and CMFRA are cleared

through a central counterparty clearing house, this may decrease the level of credit

charges applied to such trades.

Maturity: Where a derivatives trade has a greater maturity, this may increase the level

of funding and credit charges applied to such trade.

Liquidity: Where a trade is executed at a time of lower liquidity, this may increase the

level of hedging costs associated with such trade.

Unless notified otherwise, Costs and Charges for CMFRA’s products are embedded in

the final price received by the client.

Client-specific factors, such as credit quality and our collateral terms with you; and impact

or importance of each factor on the price you receive will differ based on the specific

circumstances of the transaction and additional factors may also be relevant. The relevant

impact or importance of each factor on the price you receive will differ based on the specific

circumstances of the transaction and additional factors may also be relevant. The type of

product, transaction and market in which the product would be traded, such as:

i. the trading venue;

ii. the type of instruction or order and the degree of risk we take in meeting it;

iii. the size, type and direction of the transaction;

iv. the liquidity of the instrument;

v. market conditions, including market events, volatility and time of execution;

vi. transparency of the market, including visible liquidity, trading volume and available

external venues or platforms; and

vii. the accessibility of third party quotations and other pricing information

viii. Internal costs to CMFRA, such as counterparty credit risk, hedging, structuring and

market risk, funding, and capital;

4.2 Product Specific Disclosures

The sections below provide clients with important information about costs and charges relating

to certain financial instruments as required under Article 24(4) of the Markets in Financial

Instruments Directive II.

4.3 Derivatives Products Ex-Ante Costs & Charges Disclosure

Overview & Background:

This statement seeks to inform Clients about estimated average transaction costs & charges

as a spread or margin from bid side, offer side or mid-market for a range of products by

currency & tenor.

The ranges contained in the tables reflect a typical range of charges for Investment Grade

Clients, trading on an un-collateralised, un-cleared basis.




Cost Disclosure Tables

Costs & charges will depend on, but are not limited to:

Nature of the financial instrument - Cross Currency Swaps will generally generate

higher costs and charges than Interest Rate Swaps.

Tenor - Long-dated trades generally generate higher costs & charges than short

dated trades.

Trade direction - This will be currency dependent.

Client credit quality - Highly rated Clients will generally attract lower costs and

charges than less highly rated Clients.

Credit mitigation - Unmitigated deals will generally attract higher charges than

collateralised or cleared trades

Funding. Trades with high funding costs (to CMFRA) will generally generate higher

costs & charges, than trades with low funding costs.

Currency liquidity - Emerging market currencies generally attract higher costs and

charges than G7 currencies.

Timing - "Out of hours trading" (i.e. when markets are "closed") may lead to higher

costs and charges due to reduced liquidity.

Deal complexity - Complex trades will generally attract higher costs and charges

than more vanilla trades.

Capital impact - Trades with a high capital or regulatory impact may attract higher

costs and charges than those with a benign impact.

Deal size or notional - Very large, or very small trades may attract higher costs and

charges than "market- size" trades.

Portfolio effect - Clients with existing portfolios may benefit from portfolio netting

which may lead to reduced costs and charges.

CMFRA specialises in bespoke, rather than generic over-the-counter derivative contracts. In

all cases, each trade opportunity will be individually priced, using our in-house pricing models,

taking all the above factors into account. We will provide indications, upon our receipt of a

satisfactory termsheet (and discussion of terms).

CMFRA can only trade with Clients who have been fully on-boarded. This will generally

include:

Credit approval (not required for "sold” options with Client premium paid up-front)

Satisfactory Legal documentation. We will generally require a fully executed Swap

Master Agreement (e.g.: ISDA, FBF, DRV). Fully agreed long-form confirmations may

be satisfactory in certain circumstances

Fully completed client due diligence and satisfaction of Regulatory requirements.

Additional Information

CMFRA can quote from bid, mid, or offer.




We generally quote "all-in” on an indicative or executable basis. When you enter into

a transaction, the price of the instrument includes the costs and charges of the

instrument. We do not charge these costs separately.

Costs and charges quoted will be subject to change, as market conditions change

Once a trade is closed, it will be subject to the Swap Master Agreement & Trade Confirmation

(or Long-form confirmation). No further costs and charges will be applied.

Detailed below are the estimated average transaction costs & charges for the primary products

offered by CMFRA.

4.3.2.1 Interest Rate Swaps EUR; GBP; USD; JPY

Cost Type 5 year 10 year 15 year

Investment services and/or ancillary services

0 bppa 0 bppa 0 bppa

Financial Instruments 0 – 15 bppa 0 – 25 bppa 0 – 35 bppa

Other payments made or received - excluding intra-group fees


Total costs and charges 0 – 15 bppa 0 – 25 bppa 0 – 35 bppa

4.3.2.2 Cross Currency Product GBPUSD; EURUSD; JPYUSD (Fixed

Currency v USD Float)

Cost Type 5 year 10 year 15 year



Financial Instruments 0 - 25 bppa 0 – 50 bppa 0 – 75 bppa



Total costs and charges 0 – 25 bppa 0 – 50 bppa 0 – 75 bppa

For estimated pre trade costs and charges related to other financial instruments offered by

CMFRA not included in this disclosure please contact your usual Relationship Manager.

Additionally as a client, should you require detailed information on any specific transaction

please contact your usual CMFRA Relationship Manager.

4.4 Securities Products (“SPG”) Ex-Ante Costs & Charges Disclosure

Overview & Background:

This document seeks to inform clients about the estimated average transaction costs and

charges, as a margin from mid-market on financial instruments, when dealing with CMFRA.




These estimations take into account all costs and charges. The figures contained in the tables

herein are reasonable estimations of maximum or average cost ranges, and have not been

personalised to any specific client activity or market conditions. These estimations have

typically been derived with reference to existing fee schedules or historical data. The range of

costs outlined in this document is highly dependent on a number of factors, including but not

limited to, the type of financial instrument, the cost, time, and potential risks to CMFRA, the

degree of liquidity, standardisation, credit risk, and capital impact of the Financial Instrument.

These elements determine the total price for financial instrument.

The cost of services and the cost related to the financial instruments are important elements

which should be taken into consideration when transacting with CMFRA.

Cost Disclosure Tables

While reading this document, please take the following into account:

We generally quote "all-in” on an indicative or executable basis. When you enter into

a transaction, the price of the instrument includes the costs and charges of the

instrument. We do not charge these costs separately.

The cost of the investment service, as well as the cost of the financial instrument, are

related to the transaction. You will not be charged other costs, such as incidental or

on-going costs. This document does not include product costs (mid-price), as those

costs vary per product and transaction.

The transaction costs compensate for, amongst others, risks, costs and capital

consumption considerations and may include sales margins. Actual transaction costs

are determined by a number of factors including, but not limited to, transaction size,

market environment, liquidity, clearing and settlement fees, broker/platform costs,

market and counterparty risk and your past trading activity.

The figures displayed are no guarantee of future transaction costs and are subject to

change. The figures presented are an estimation and do not take into account specific

client situations or unusual conditions (including market volatility) which may influence

costs.

The actual amount of transaction costs may vary according to the unique

circumstances of a particular transaction. Additionally, pricing will be offered in

accordance with our Order Execution Policy, where applicable.

Should clients have any queries in relation to this disclosure, they should contact their usual

Relationship Manager. For details of charges relating to Research and Corporate Access

please refer to your Research & Corporate Access Agreement.




4.4.2.1 Credit Products (Corporate Bonds, Sovereign Bonds, Other Bonds)

Cost Type Percentage Range

(estimated Low/High) Cash Equivalent

Cost estimates for the above products are based on volume of EUR 100,000, and provided in averages rather than the maximum range, given the implicit nature of any costs and charges applied.


0% € 0

Financial Instruments 0 – 1% 0 – €1,000


0% € 0

Total costs and charges 0 – 1% 0 – €1,000

4.4.2.2 Equities (incl. Low and High touch execution Risk Pricing)


(estimated Low/High) Cash Equivalent

Estimated ranges are based on a total consideration of EUR 100,000. For other total considerations the cost and charges figure will change accordingly.


1 – 30 bps €10 – €300

Financial Instruments 0 bps € 0


0 bps € 0

Total costs and charges 1 – 30 bps €10 – €300

4.4.2.3 Convertible Bonds


(estimated Low/High)

Cash Equivalent

Cost estimates for the above products are based on volume of EUR 100,000, and provided in averages rather than the maximum range, given the implicit nature of any costs and charges applied.

Investment services and/or ancillary

services

0% € 0

Financial Instruments 0.125 – 0.5% €125 – €500

Other payments made or received -

excluding intra-group fees

0% € 0

Total costs and charges 0.125 – 0.5% €125 – €500

4.5 Other Matters to Note

a) Aggregated Costs & Charges and Cumulative Effect Disclosures

In addition to your choice taken in the consent letter at the beginning of your relationship with

CMFRA you can always request the annual ‘ex post’ summary of accrued costs and charges.

In such case it would start after receiving your renewed instruction with data from the last




completed calendar year. At any time you could change your original instruction obtaining this

summary, please inform us or ask your relationship manager. Please note summaries which

would only show a zero cost or charge will not be issued.

b) Commissions and fees

Where we act in executing orders on your behalf, or providing access to a particular source

of liquidity, we may charge you a pre-agreed commission or fee on the trade.

Commissions or fees at which CMFRA generally expects to trade with you are agreed with

you, and as such these commissions or fees may be amended periodically and any changes

agreed with you.

c) Securities lending repo and financing fees

For securities lending transactions, where you are the borrower, you will be charged a lending

fee. For repo transactions, a pricing rate will be payable. For equity swaps you will be charged

a financing rate.

The rates and the basis on which CMFRA generally expects to trade with you may be agreed

with you at the initiation of business and set out in our fee schedule. In all other cases, they

will be agreed on a trade-by-trade basis, prior to trading, and will be based on some or all of

the following factors: the type of product and underlying security, type and size of the

transaction, market conditions, market transparency, availability of liquidity providers and

other considerations that are in existence at the time of the transaction and the type of and

the amount of collateral provided.

d) Product or transaction specific fees

Additional product specific fees may be agreed with you for certain financial instruments,

services, engagements and/or transactions. Information on such fees will be provided in

specific service or engagement documentation.

e) Taxes

Taxes may also be payable in accordance with the rates set by the relevant tax authorities at

the time of the transaction. Such rates are publicly available, may be affected by factors such

as the type of security, type or value of the transaction and/or your tax status and may change

at any time.

f) Currency conversions

If your transaction involves a currency conversion (e.g. if the security being purchased is

denominated in a different currency), currency exchange costs may also apply, which will be

determined by reference to a number of factors, including exchange rates applicable at the

time of your transaction.

g) Risk price

When you ask us to provide you with a quote in a particular financial instrument or where we

will be trading with you in as principal “on risk” (i.e. as a systematic internaliser, market marker

or liquidity provider), unless we agree otherwise, the price of any transaction we execute with

you may include what we believe to be a reasonable spread. This spread is not an explicit




transaction charge; rather the price reflects the risk price at which CMFRA is willing to trade

that instrument with you.

The risk price at which you trade with CMFRA will depend on a number of factors which reflect

the level of risk CMFRA expects to incur when transacting with you, which may include those

set out below. This list is not exhaustive and CMFRA may take into account other factors that

it considers appropriate in determining that price.

h) Costs related to Ancillary or other services

CMFRA may charge you for ancillary or other services we provide you, such as research and

corporate access services. Any such fees are agreed with you and may be amended

periodically and you will be notified of any changes.

i) Third-party payments

From time to time, we may receive remuneration from third parties (excluding our affiliates) in

respect of transactions we carry out with or for you, or we may provide or receive non-

monetary benefits in connection with the provision of services to you, provided that the

payment or benefit:

(i) is designed to enhance the quality of the services that we provide to you; and

(ii) does not impair compliance with our duty to act honestly, fairly and professionally in

accordance with your best interests.

Where we pay or receive such amounts or benefits, we will disclose the existence, nature and

amount of the payment or benefit separately to you (which may be via a client platform or

portal). Minor non-monetary benefits e.g. participation in conferences, may be described in a

generic way.

If you have any questions in relation to the Costs and Charges associated with any particular

financial instrument, please raise these with your usual CMFRA Representative.




5. Conflicts of Interest Policy

5.1 Purpose and short summary

As a multi-service financial institutions engaging in a variety of activities and offering a wide

variety of products and services to a broad and diverse client base, SMBC Nikko Capital

Markets Europe GmbH will from time to time encounter actual and potential conflicts of interest

that arise from SMBC Nikko Capital Markets Europe GmbH as well as from all entities of

SMBC taking multiple roles in a transaction, or providing products and services across

different desks, divisions, legal entities or SMBC Nikko Capital Markets Europe GmbH

operated trading venues.

A conflict of interest is generally a situation in which the firm or part of the firm or a business

unit or any of its employees and contingent workers has a business or personal interest which

potentially competes with such an interest of any or more of a client, the firm or part of a firm

and business unit. Whereby client means existing client, a potential client or past client where

fiduciary or other duties remain.

In accordance with the regulatory obligations set by the Markets in Financial Instruments

Directive II, as amended and implemented nationally, SMBC Nikko Capital Markets Europe

GmbH will manage conflicts fairly and will put in place policies and procedures to ensure that

any actual or potential conflicts of interest are identified and managed effectively. In this way,

the SMBC Nikko Capital Markets Europe GmbH seeks to avoid the risk of material damage to

the interests of the clients.

SMBC Nikko Capital Markets Europe GmbH has the obligation to manage conflicts of interest

effectively by implementing adequate procedures and a robust control environment with

effective systems to identify, mitigate and manage the risks. Not doing so risks clients’

interests being overlooked in favour of commercial or personal interests.

Conflicts identification and resolution is a critical tool to prevent conflicts arising that could

result in: legal/regulatory risk, reputational risk and damage to client relationships. One policy

cannot describe all circumstances in which conflicts of interest arise. Rather, it is the aim to

provide an overarching framework for the identification and management of conflicts of interest.

Therefore, this policy is to be revised annually, and aims at setting out key principles and

relevant measures.

Where actual or potential conflicts of interest were identified, their materiality has to be

assessed; they should be prevented where possible or mitigated appropriately. In any case,

an actual or potential conflict of interest has to be located within the conflicts of interest register.

Disclosing a conflict of interest remains to be the last resort (ultima ratio principle), meaning

that all other instruments which are suitable for handling the conflict of interest will be preferred.

5.2 Scope

This policy applies to:

all permanent staff;




all temporary staff;

any contractors, representatives and any tied agents of SMBC Nikko Capital Markets

Europe GmbH who has access to SMBC’s systems (whether actual or incidental)

who are herein after referred to as “Employees”.

This policy is to be revised annually, and shall identify the situations in which conflicts of

interest may arise and should state how these conflicts should be managed. Managing

conflicts of interest must aim at acting in the best interest of our clients. SMBC Nikko Capital

Markets Europe GmbH is obliged to treat their clients fairly and with integrity across all its

business activities.

The conflict might be:

a. between the interests of two or more clients; or between SMBC Nikko Capital Markets

Europe GmbH own interests and those of a client or clients; or

b. between the interests of the employee and those of a client or clients of SMBC Nikko

Capital Markets Europe GmbH; or

c. between the interest of the employee of SMBC Nikko Capital Markets Europe GmbH

and SMBC Nikko Capital Markets Europe GmbH itself; or d. between SMBC Nikko Capital

Markets Europe GmbH and the members of both its management body and its supervisory

board

5.3 Identifying Conflicts of Interest

SMBC Nikko Capital Markets Europe GmbH and its employees have to undertake all

appropriate steps to identify conflicts of interest that arise or could arise with regards to

conducting business.

For the purposes of identifying the types of conflicts of interest that arise or may arise in the

context of providing a service which entails a risk of damage to the interests or our client or

the integrity of the financial market, SMBC Nikko Capital Markets Europe GmbH and its

employees must take into account whether:

SMBC Nikko Capital Markets Europe GmbH is likely to make a financial gain, or avoid

a financial loss, at the expense of the client;

SMBC Nikko Capital Markets Europe GmbH has an interest 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 interest in that outcome;

SMBC Nikko Capital Markets Europe GmbH has a financial or other incentive to favour

the interests of one client or group of clients over the interests over another;

SMBC Nikko Capital Markets Europe GmbH receives or will receive a monetary or

non-monetary inducement from a third party or another Sumitomo Mitsui Financial

Group entity or related division in relation to a service provided to the client;

The interests of one client may be preferred to those of another;

SMBC Nikko Capital Markets Europe GmbH or its employees carry on the same

business as the client;




Employees of SMBC Nikko Capital Markets Europe GmbH have multiple roles across

more than one legal entity or have multiple roles outside of the company with an impact

on the client relationship;

Business is being placed on behalf of the client with another group entity, which may

not be in the client’s best interest.

These criteria should be taken into account when considering, if a behaviour entails or may

entail a conflict of interest. Self-understanding, the mentioned criteria are a non-exhaustive list

and other factors need to be considered on a case-by-case basis.

Where identified through the above outlined criteria, conflicts of interest must be recorded

immediately within the conflicts of interest register.

5.4 Procedures and Measures for Managing Conflicts of Interest

In order to manage any conflicts of interest under this policy the following measures and

procedures should be applied through a combination:

Methods of Conflicts Management

Segregation of Duties - establishing adequate segregation of duties, e.g. entrusting conflicting

activities within the chain of transactions or of services to different employees, or entrusting

supervisory and reporting responsibilities for conflicting activities to different employees.

Information Barriers - establishing information barriers and physical separation of certain

departments specifically between private and public side business lines in order to prevent

information flow between conflicting business activities. This also includes system access

restrictions.

Outside Activities - preventing employees who are also active outside the institution from

having inappropriate influence within the institution regarding those other activities; This also

includes preventing members of the management body from holding directorships in

competing institutions.

Multi-Level-Procedures and Deal-Treeing - establishing adequate procedures for transactions

with related parties (e.g. requiring transactions to be conducted at arm's length; requiring that

all relevant internal control procedures fully apply to such transactions; requiring a binding

consultative advice by members of the supervisory board; an approval by shareholders of the

most relevant transactions; limits to the exposure of such transactions).

Consent

Where SMBC Nikko Capital Markets Europe GmbH is not reasonably confident that the

arrangements it has in place to manage conflicts of interest are sufficient to ensure that the

risk of damage to the interest of the client may be prevented, SMBC Nikko Capital Markets

Europe GmbH must disclose the general nature and/or source of the conflict to the client which

may be impacted, if it wishes to proceed to undertake the business for that client.




Consenting conflicts of interest should aim at enabling existing or potential clients or third

parties to make an informed decision before conducting business with SMBC Nikko Capital

Markets Europe GmbH

Declining to act

In certain circumstances, bearing in mind the nature of the conflict and the risks involved,

SMBC Nikko Capital Markets Europe GmbH may wish to refrain from acting for the client.

Therefore, each division must ensure that its established organizational and administrative

arrangements are effective to identify and manage relevant conflicts of interest.

In the case that applied measures and procedures are not effective it has to be decided

whether 1) the Conflict of Interest will be disclosed (3.2) or 2) acting for the client or undoing

an action which would lead to harming the client’s interest or potentially harming the interests

of the client is the adequate measure. With special regards to transactions refusing,

discontinuing or changing any part of the transaction is the remaining option.

5.5 Disclosure of Conflicts of Interest

Where there is no reasonable confidence that the arrangements that are in place to manage

conflicts of interest are sufficient to ensure that the risk of damage to the client’s interests will

be prevented, SMBC Nikko Capital Markets Europe GmbH must disclose the general nature

and/or source of the conflict to the client or potential client. Disclosure is not a sole measure

being used to manage the conflict but it should be highlighted, that disclosing a conflict of

interests as a measure remains a last resort.

The disclosure has to be provided promptly and clearly. It has to include a description of the

conflict of interest and potential risk of the conflict in sufficient detail which needs to be written

in a suitable way so that it is understood by the client. The disclosure has to include the

statement, that organizational and administrative measures set out by SMBC Nikko Capital

Markets Europe GmbH to prevent or manage the conflict are not sufficient in order to ensure

with confidence that the risk of damage to the clients’ interest will be prevented.

The disclosure must be made in a durable medium (paper or any other instrument which

enables the client to store the information for future reference for an adequate period of time

and which allows for the unchanged reproduction of that information) and must include

sufficient detail, taking into account the nature of the client, to enable that client to take an

informed decision with respect to the service, in the context of which the conflict of interest

arises.

The disclosure must be addressed personally to the client.

Procedures & Policy Application

SMBC Nikko Capital Markets Europe GmbH will manage conflicts of interest where the client's

interest threatens to be unduly harmed and will manage the conflicts of interest.

Therefore, various arrangements have been established by Compliance, designed to achieve

these objectives:




Relevant policies and procedures for inter client conflicts including policies for order

management and execution, allocation policies and procedures for treeing.

Identification of actual, potential or perceived conflicts of interest for advisory

transactions is managed through the group wide Sumitomo Mitsui Financial Group

Conflicts process where all relevant client transactions are reported;

Controls over the handling and flows of confidential and inside information are outlined

in the Information Barriers policies;

Restricted lists are in place in order to prevent before entering a relationship and check

an ongoing base whether relationships are effected by sanctions or other restrictions

Policy Application

Employees who identify a conflict within SMBC Nikko Capital Markets Europe GmbH must

notify their responsible line manager or the Compliance Department immediately e.g. where

they have outside affiliations or identify potential or actual conflicts, Managers are requested

to inform the Compliance Department of any conflicts reported to them and provide all

essential information on the transaction, the client/s, the relevant staff, etc.

Based upon the information provided and discussions held with the relevant employee, the

Compliance Department will perform a thorough assessment of the conflict and will report it to

the CM FRA in a first step.

In the event this is required Local Compliance and the relevant business area will be notified

with full details of the conflict, Local Compliance will agree steps to be taken to resolve the

matter, time-frame for resolution, and any other concerns and/or risks associated with the

conflict.

Furthermore, a Conflicts of Interest Record will be kept outlining any risk or concerns resulting

from conflicts of interest. This will be provided to the periodic RCC2 via a written report on the

situations contained in the Conflicts of Interest record.

5.6 General types of situations leading to conflicts of interest

Mandatory information about outside business interests / affiliations

Every business activity (e.g. consultancy, management positions, heading a trust, business

participations or ventures) outside SMBC Nikko Capital Markets Europe GmbH needs to be

reported and the approval of the responsible business area head / board member is required.

Human Resources will inform Compliance about granted approvals. Where either new joiners

or existing employees have affiliations or personal relationships which could conflict with their

roles, these should be disclosed.

Personal Account Dealing

Personal trading or outside business activities (including board memberships/directorships) or

investments could raise potential conflicts with a client, SMBC Nikko Capital Markets Europe

GmbH or the SMBC group.




SMBC Nikko Capital Markets Europe GmbH’s Compliance Manual sets out the conditions for

the Employees’ personal account dealing activities. The main goal, besides avoiding market

abuse, is to avoid conflicts of interest between clients of the firm and Employees of the firm.

Remuneration

Compensation arrangements or incentives could affect whether particular investment

business or a particular transaction is presented to a client.

SMBC Nikko Capital Markets Europe GmbH has remuneration policies and practices are in

place in accordance with regulatory requirements, taking into account the interests of all the

clients, and designed to ensure that clients are treated fairly and their interests are not

impaired by the remuneration practices.

Gifts & Entertainment

Giving or receiving gifts or entertainment (to or from individuals, brokers or firms with whom

SMBC Nikko Capital Markets Europe GmbH conducts or intends to conduct business), of a

value or frequency that may be perceived to be an improper inducement.

It is prohibited for all Employees to receive or offer gifts and entertainment for themselves or

their families which would negatively influence their integrity which might constitute an

inappropriate incentive. Further information concerning this topic is specified in the Gifts and

Entertainment chapter of the SMBC Nikko Capital Markets Europe GmbH Compliance Manual.

Financial Analyst

For Research Analysts and the Research department 3 for the production of investment

research, the Group’s guidelines will apply, which explains the disclosure requirements for

conflicts of interest and the responsible analyst. The Research Department has its own

specified policies and procedures for dealing with conflicts of interest, including special

personal account dealing regulations apply. SMBC Nikko Capital Markets Europe GmbH does

not have a Research Department producing research. In general, Conflict of Interest(s)

(“COI(s)”) regarding production of research is managed by Nikko Tokyo in accordance with

generally accepted COI provisions. Where the distribution of Research is relevant, COI

management and approval processes need to be in place and complied with.

Order Execution

SMBC Nikko Capital Markets Europe GmbH has defined and implemented an Order Execution

policy which describes how clients’ orders are executed. The Order Execution policy sets out

how SMBC Nikko Capital Markets Europe GmbH deals with clients’ orders to act in their best

interest.

New Business

All new business undertaken by SMBC Nikko Capital Markets Europe GmbH shall be

assessed prior to transacting, to ensure that it does not create a conflict, and/or compromise

an existing relationship/transaction with another client, or dealings transacted by employees




themselves. Employees are required to report to the Compliance Department on any occasion

where they suspect a conflict may arise. The Compliance Department will then advise what

further action is to be taken to address the situation.

Additionally, according to the type of product area, the following situations may create

conflicts:

Intragroup conflicts

An Sumitomo Mitsui Financial Group entity provides loans to the client which is an

issuer client of SMBC Nikko Securities Inc.;

An Sumitomo Mitsui Financial Group entity or affiliate provides financing to multiple

competing bidders for a single asset;

SMBC Nikko Capital Markets Europe GmbH is underwriting bonds where proceeds

are used to repay group company loan.

Pricing and allocations conflicts

The firm’s allocations of instruments in which the firm or affiliates has a position;

The method in which the firm allocate financial instruments to investor clients;

Information risk conflicts:

Employees of the firm may possess material or privileged non-public information

related to clients and the incentive to share material or privileged non-public

information to further enhance the firm's business objectives may conflict with the best

interests of its client(s).

Transactional conflicts:

Carrying out dealing activities in which SMBC Nikko Capital Markets Europe GmbH is

originating positions may conflict with its clients’ activities where SMBC Nikko Capital

Markets Europe GmbH may not act in the best interests of the client or fail to provide

best execution where it has the obligation to do so;

Any instance where SMBC Nikko Capital Markets Europe GmbH is contemplating

providing financing to more than one potential client with respect to the same target

business or assets;

SMBC Nikko Capital Markets Europe GmbH could determine valuation as calculation

agent in the case of transactions, which could set valuations that favour its position;

Strategic / Proprietary Information

SMBC Nikko Capital Markets Europe GmbH employees will have access to information

relating to its clients, employees, service providers, controls, policies & procedures, security

and data which must be safeguarded and treated as confidential. SMBC Nikko Capital Markets

Europe GmbH has Information Security policies and controls in place which must be adhered

to.




5.7 Regulatory references

Provisions of Part 11 of the German Securities Trading Act (WpHG) and the German

Ordinance specifying the rules of conduct and organisational requirements for investment

service providers (WpDVerOV)

BaFin’s Minimum Requirements for the Compliance Function and Additional

Requirements Governing Rules of Conduct, Organisation and Transparency (MaComp)

BaFin’s Minimum Requirements for Risk Management (MaRisk)

BaFin’s Issuer guideline (Emittentenleitfaden)

Final MiFID II Delegated acts on Inducements and Conflicts of Interest (April 07, 2016)

and associated Regulatory Technical Standards;

The EBA Guidelines on internal governance (GL 44).

5.8 Record-keeping and approval

SMBC Nikko Capital Markets Europe GmbH have an external Conflicts of Interest Summary

Policy available on the website and also disclose potential conflicts of interest as part of

transactional documentation e.g. Offering Circulars. In the event a decision is made by SMBC

Nikko Capital Markets Europe GmbH to make a specific disclosure to a client or potential client

pursuant to this policy, the proposed disclosure should be agreed by the relevant Department

Head and the Compliance Department prior to it being sent to the client or potential client.

Once approved, a complete record of the disclosure including: the date; time; names of

employees involved; name of the client; contact name at the client; the type of durable medium

used to record the disclosure and a copy of the disclosure made, which must be kept by the

relevant department making the disclosure and the /relevant compliance officer.

5.9 Roles with respect to managing conflicts of interest

Role of the Management Board

The Management Board is generally responsible for the establishment of an effective

governance and policy framework including an effective management and control framework

concerning actual and potential conflicts of interest.

Role of the Supervisory Board

The voluntary Supervisory Board should oversee the implementation and maintenance of

effective policies to identify, manage and mitigate actual and potential conflicts of interest.

Role of Compliance

Compliance is committed to the implementation of measures to identify and avoid or

appropriately manage actual or potential conflicts of interest.




Role of Employees

It is the responsibility of all employees to identify actual or perceived conflicts of which they

become aware. If there is not a process in place for measuring or adequately managing and

addressing a specific conflict or if employees are in doubt, they should refer to Compliance.

Role of Risk, RCSA processes

The business must consider conflicts in any relevant RCSA process, identifying key operating

risks inherent in managing their business and conflicts are part of the global risk taxonomy

that must be taken into consideration in the identification process.

Role of Internal Audit

Internal Audit will include conflicts and actual or potential issues with conflict management

strategies in

5.10 Identification and management of transactional conflicts of interest.

Transactional conflicts of interest will principally be identified via the Conflict Clearance

process, which is coordinated at a Sumitomo Mitsui Financial Group level and when necessary

within the Compliance Control Room. All Employees of SMBC Nikko Capital Markets Europe

GmbH who become aware of a transactional conflict of interest must seek advice from the

Compliance Control Room and the Local Compliance Department.

5.11 Training & Awareness

All SMBC Nikko Capital Markets Europe GmbH employees have to receive a COI training as

part of the new joiner induction process. Furthermore all business divisions are responsible

for ensuring their employees understand the responsibilities under this policy for the

identification, management and escalation of conflicts of interest. Each department is

responsible to extend the relevant training material in order to suit their divisional requirements.




6. Order Execution Policy

6.1 Introduction

This Client Order Execution Policy (“Policy”) explains how SMBC Nikko Capital Markets

Europe GmbH (“CMFRA”) seeks to provide best execution.

CMFRA is obligated to take all sufficient steps to obtain the best possible result for its clients,

taking into account all relevant execution factors (“best execution”), when executing, receiving

and transmitting applicable client orders or quotes (“orders”).

This policy sets out general information in respect to CMFRA’s approach to best execution.

Further information is provided by class of financial instrument in the Appendices to this

Policy. Specific information by asset class will include, but is not limited to:

The application of best execution,

The relative importance given to execution factors; and

Details of execution venues where CMFRA may place significant reliance.

These Appendices that should be read in conjunction with this policy cover the following

products:

Cash Equities,

Equity linked products (including Convertible Bonds and Covered Warrants,

Credit,

Rates, and

Derivatives.

This Client Order Execution Policy applies to Professional Clients (the “client”) of CMFRA

regardless of whether you are an Elective Professional Client or Per Se Professional Client

and it is not applicable to business conducted with Eligible Counterparties. It is not directed at,

or intended, for Retail Clients and should not be considered for such persons. The policy

should be read in conjunction with our Terms of Business, which you will already have

received along with a letter notifying you of your classification.

The requirements relating to obtaining the best possible result for clients will be applied to any

relevant transaction, in a MiFID II Financial Instrument with CMFRA or affiliates as indicated

or where any part of the origination or execution of the client order or transaction involves a

sales person or trader located in the EEA who has a direct relationship with the client,

regardless of where the client is established.

6.2 What is best execution

Best execution is the requirement to take all sufficient steps to obtain the best possible result

when either executing transactions on your behalf or using other affiliates or brokers to

execute transactions on your behalf, taking into account the following execution factors:

Price – the price at which the transaction could be executed,




Cost – the costs that will be payable by the client as a result of the execution of the

transaction,

Speed settlement – the speed of execution and settlement of the order,

Likelihood of Execution and Settlement – the likelihood that the transaction will be

executed and settled; and

Nature of the transaction and any other consideration relevant to the execution

In coming to our determination with regards to the priority of such execution factors, a variety

of criteria are taken into account which may include, but are not limited to, the type of financial

instrument that is the subject to the order, the type of order and its specific characteristics,

such as the size of the order or the liquidity of the underlying, as well as the execution venues

to which the order could be directed. Appropriate consideration will be made based on a

transaction by transaction basis and will vary per asset class.

6.3 When does Best Execution apply?

The obligation to provide best execution will always arise in circumstances where CMFRA

receives instructions from a client to execute a transaction on their behalf, that gives rise to

contractual or agency obligations owed by CMFRA to the client. Such contractual or agency

obligations will arise where we are required to exercise discretion in relation to the execution

of your instruction or order and you legitimately rely on us in relation to the exercise of that

discretion e.g. in an agency or riskless principal capacity.

The best execution obligation may also apply when CMFRA deals on its own account, acting

in a principal capacity, and you are placing a legitimate reliance on us to protect your interest

in relation to the execution of a transaction. To determine whether you are placing “legitimate

reliance” on us we will take into account a number of relevant considerations (the four-fold

test):

which party initiates the transaction - where we approach you and suggest that you

should enter into a transaction, it is more likely that you will be placing reliance on us,

market practice and the existence of a convention to ‘shop around’ - where the practice

in the market in which a business area operates suggests you take responsibility for

the pricing and other

elements of the transaction (e.g. there is a market convention to “shop around” for a

quote), it is less likely that you will be placing reliance on us,

the relative levels of price transparency within a market – if we have access to prices

in the market in which we operate, whereas you do not, it is more likely that you will be

placing reliance on us, whereas if our access to pricing transparency is equal or similar

or to yours, it is less likely that you will be placing reliance on us; and

the information provided by CMFRA and any agreement reached.

The obligation to provide best execution will not generally apply where:

You ask us to provide you with a quote in a particular Financial Instrument;




We will be trading with you as principal “on risk”, in a market where the usual practice

of clients is

to ask several dealers for quotes;

Your access to prices in the market means you are able to, and in practice can be

expected to

assess our quotes against those provided by other dealers;

You specify the price/quote and the trade is executed on risk; or

You apply other conditions which may be considered as specific instructions.

6.4 Specific Instructions

Where we receive specific instructions from you in relation to every aspect of a transaction,

such that we have no discretion over how an order is executed, we will execute so far as

reasonably possible the transaction in accordance with those instructions. Specific instructions

may prevent us from taking some or all of the steps set out in this policy that are designed to

obtain best execution. By following your specific instructions we will satisfy our obligation to

provide best execution in relation to the order. In respect of those aspects of execution which

are not covered by the specific instruction, we will process the order in accordance with this

Order Execution Policy.

When does Best Execution apply?

The obligation to provide best execution will always arise in circumstances where CMFRA

receives instructions from a client to execute a transaction on their behalf, that gives rise to

contractual or agency obligations owed by CMFRA to the client.

Such contractual or agency obligations will arise where we are required to exercise discretion

in relation to the execution of a client instruction or order and where a client legitimately relies

on us in relation to the exercise of that discretion e.g. in an agency or riskless principal capacity.

The best execution obligation may also apply when CMFRA deals on its own account, acting

in a principal capacity, and a client is placing a legitimate reliance on us to protect their interest

in relation to the execution of a transaction. To determine whether a client is placing “legitimate

reliance” on us we will take into account a number of relevant considerations (the four-fold

test):

Which party initiates the transaction - where we approach a client and suggest that

they enter into a transaction, it is more likely that they will be placing reliance on us.

Where a client initiates the transaction it is less likely that they will be placing reliance

on us

Market practice and the existence of a convention to ‘shop around’ - where the practice

in the market in which a business area operates suggests clients take responsibility for

the pricing and other elements of the transaction (e.g. there is a market convention to

“shop around” for a quote), it is less likely that they will be placing reliance on us

Relative levels of price transparency within a market - if we have ready access to prices

in the market in which we operate, whereas a client does not, it is more likely that they




will be placing reliance on us, whereas if our access to pricing transparency is equal

or similar or to a clients, it is less likely that they will be placing reliance on us

Information provided by CMFRA and any agreement reached.

The obligation to provide best execution will not generally apply where:

Clients ask us to provide them with a quote in a particular Financial Instrument

We will be trading with clients as principal “on risk”, in a market where the usual

practice of clients is to ask several dealers for quotes

Clients access to prices in the market means they are able to, and in practice can be

expected to assess our quotes against those provided by other dealers

Clients specify the price/quote and the trade is executed on risk, or

Clients apply other conditions which may be considered as specific instructions.

6.5 Specific Instructions

Where we receive specific instructions from clients in relation to every aspect of a transaction,

such that we have no discretion over how an order is executed, you will execute so far as

reasonably possible the transaction in accordance with those instructions. Specific instructions

may prevent us from taking some or all of the steps set out in the Policy that are designed to

obtain best execution. By following client specific instructions we will satisfy our obligation to

provide best execution in relation to the order. In respect of those aspects of execution which

are not covered by the specific instruction, you will process the order in accordance with this

Order Execution Policy.

6.6 Execution Venues we use

When executing your transactions or when placing your orders with (or transmitting your

orders to) other entities (including affiliates) to execute, CMFRA will take all reasonable steps

in order to obtain on a consistent basis the best possible result.

The factors affecting choice of execution venue include, but are not limited to financial

instrument, price, market liquidity, the size and nature of the order, credit and settlement risk,

realized performance (latency, liquidity, price improvement), and whether you have informed

us you do not consent to your orders being executed outside of a regulated market or MTF.

The factors affecting choice of execution venue include, but are not limited to financial

instrument, price, market liquidity, the size and nature of the order, credit and settlement risk,

realized performance (latency, liquidity, price improvement, and whether a client has informed

us they do not consent to their orders being executed outside of a regulated market or MTF.

Our choice of venue may be constrained by the fact that there may be only one venue where

an order can be executed due to the nature of the instrument, your order or your individual

requirements.

Venues:




Regulated Markets, Multilateral Trading Facilities and Organised Trading Facilities

CMFRA and its Affiliates where we internalise orders (either on a risk or as a riskless

principal basis)

Other exchanges that are not Regulated Markets,

Systematic Internalisers,

Market makers or other liquidity providers

Non-EEA entities performing a similar function to any of the above.

Execution venues can include venues of which we are direct members or participant and

venues that we access through third party brokers or dealers.

CMFRA is not a member of any exchanges or other regulated markets. For the purposes of

ensuring efficiency and access to a wider range of markets, particularly in relation to Japanese

equities, CMFRA has entered into agreements with third party brokers, including SMBC Nikko

Securities Inc. (“SMBC Nikko”). In addition CMFRA may be a member of MTFs and transact

with a number of third parties who may be an OTF or Systematic Internaliser. Accordingly, the

"execution venues" referred to herein are SMBC Nikko, MTFs, OTFs, Systemic Internalisers

and other third party brokers.

Where CMFRA has access to multiple venues for execution, CMFRA will select the most

appropriate execution venue.

6.7 Consent to execute away from a Regulated Market or MTF

CMFRA may execute all or part of your order outside of a Regulated Market or MTF. An

opportunity to formally consent or disagree with this approach is included in our account

opening documentation that has been provided to you. In the absence of an explicit response

from you to the contrary in relation to this information, if you place an order with us, we will

treat you as having provided us with consent to trade outside a Regulated Market or MTF, as

we believe it is in your best interests for us to do so (i.e. it allows us the flexibility to choose

from a wider range of execution venues) and recognises that in fixed income markets you are

executing directly with CMFRA and not expecting us to route transactions to a Regulated

Market or MTF other than where required to do so by regulation.

6.8 Aggregation and allocation of orders

CMFRA may aggregate orders of (i) multiple clients and (ii) one or more clients and its own

orders, where CMFRA believes the aggregation to be fair and equitable taking into account

received, any relevant instructions received from the client, the relative sizes of the orders and

the current liquidity of the market for the relevant financial product, and CMFRA’s obligations

to act in the interests of its clients and to avoid conflicts of interest.

Where CMFRA executes an aggregated order, unfair preference will not be given to own

account orders, or to any particular client, in the subsequent allocation procedure. Where a

client order and an own account order have been aggregated, priority will be given to satisfying

the client order if the aggregate total of all orders cannot be satisfied, unless CMFRA can




demonstrate on reasonable grounds that without CMFRA’s participation it would not have

been possible to execute those orders on such favourable terms, or at all.

6.9 Monitoring and Notification

CMFRA will monitor the effectiveness of its execution arrangements and Order Execution

Policy and assess on a regular basis whether the execution venues it has selected provide for

the best possible result for orders it executes on your behalf.

CMFRA will review this Order Execution Policy, including its appendices, and its order

execution arrangement at least annually. CMFRA will also notify you of any material changes

to its order execution arrangements or this policy; such notification may be made via the

CMFRA website.

6.10 Appendix for Order Execution: Asset Class Information

Introduction

This Appendix provides further details with regards to the application of best execution in

relation to Cash, Equities, Equity Linked Products, Credit, Rates and Derivatives.

General

CMFRA owes a duty of best execution when executing Client Orders on your behalf. We

consider ourselves to be in receipt of an order where an execution instruction is given to us

that give rise to contractual or agency-like obligations to you. Specifically, this will be the case

where you commit to a trade that is not immediately executable, leaving discretion with us as

to the manner of execution and exact terms of the resulting transaction; and the execution can

be booked to your account, without the need to re-confirm the price, size or any other factor(s)

with you; or where we execute an order usually on a riskless principal basis on your behalf.

Best execution obligations are unlikely to apply where you have asked us for a quote (RFQ),

as we generally take the view that in the context of the four-fold considerations there is no

legitimate reliance being placed on us to meet the relevant best execution requirements.

However, this should be reviewed on a transaction by transaction basis depending on the

circumstances of the request. Furthermore, where clients provide us with a specific instruction,

such as the time an order should be placed, to the extent that we follow such instructions, we

have satisfied any best execution requirements with respect to that aspect of the order.

Cash Equities

For the majority of Cash Equity executions, except in certain circumstances, the obligation to

provide best execution will ordinarily apply.

CMFRA is not a member of any exchanges or other regulated markets, nor is it a systematic

internaliser in cash equities. For the purposes of ensuring access to Japanese exchanges and

markets in relation to Japanese equities, CMFRA has entered into execution agreements with

SMBC Nikko Securities Inc. (“SMBC Nikko”).




The Cash Equities Desk of CMFRA and/or SMBC Nikko assess each client order based on

their accompanying instructions. Client specific instructions determine how each order is split

into components and also dictate how these are executed. Consequently, the prioritisation of

execution factors may vary on a per-order basis.

Outside of any specific instructions provided by the client, the most important execution factor

when handling orders will be the price of the relevant financial instrument. Subject to any

specific instruction, the following provides an example of the execution factors prioritisation

that may be applied:

1. Price

2. Likelihood of Execution

3. Size

4. Costs

5. Speed

6. Other Considerations

Once an order has been received it is split for execution in accordance with any accompanying

Specific Instructions. As part of assessing how to split a client order, this may be done

manually, via an algorithm provided by SMBC Nikko or by a combination of the two. This

process will follow a differing priority of execution factors to meet the desired overall objective

on a per order basis. Client Specific Instructions permitting, market impact is taken into

consideration.

In order to meet the obligation to take all necessary steps to obtain on a consistent basis the

best possible result for the execution of client orders SMBC Nikko (the Cash Equities Desk)

may use one or more of the execution venues listed below:

Execution venues

Chi-X Japan

Fukuoka Stock Exchange

Nagoya Stock Exchange

Sapporo Stock Exchange

SBI Japan Next

Tokyo Stock Exchange

ToSTNET.

Direct Markets Access (“DMA”) orders received by CMFRA are passed through a Smart Order

Router unless a specific venue is instructed. In circumstances, when we do not take an active

role in determining client execution parameters, we will seek to transact that order in

accordance with their instructions. CMFRA reserves the right however to intervene in the

routing and execution of DMA orders where the original parameters could result in adverse

market impact.




Equity Linked Products

For Equity Linked Products, CMFRA primarily trades in a principal capacity providing

responses to client’s Requests for Quotes (RFQ) and therefore we may act as a liquidity

provider. As CMFRA operates in a competitive market for the execution of clients RFQ’s in

Equity Linked Products, the expectation is that clients have access to multiple dealers and

pricing sources and hence are in competition.

As with RFQ/reverse inquiries, if CMFRA provides quotes or negotiates a price on an RFP

basis with you based on your requirements, we will not generally presume to receive a Client

Order where best execution will apply.

In both of the above circumstances, we will make a determination of the transaction at the

time of quoting whether you are legitimately reliant on us. This will be based on the four-fold

considerations outlined in the Order Execution Policy, meaning:

Where we deem clients to request or take a price in a competitive market, and where

they are not placing legitimate reliance on CMFRA, best execution will not apply. We

expect this to be the case in the majority of circumstances

Where clients legitimately rely on us to get the best possible outcome, we will provide

best execution. We expect this to be the case only in limited circumstances.

Typically executions in convertible bond markets are undertaken via two main approaches,

through a RFQ or via a Resting Order. In a resting order in the over-the-counter markets,

clients give us an instruction to buy or sell on their behalf a specified size in a specified

convertible bond with the aim of achieving the best possible outcome within the available

appetite or supply in the market. We will attempt to fill their Resting Order on an over-the-

counter basis.

When seeking to execute a client resting order CMFRA will seek to fill the transaction as soon

as possible, at the target price or a better price, whilst applying a mark-up or spread as

compensation for our work and (residual) risks. This mark-up or spread should be within a

range of what we consider reasonable for the product type, tenor and size of the trade.

CMFRA does not charge a commission but we do impose a mark-up/down or spread on where

we execute trades in the market and where we execute them with clients (there is no agreed

consistent mark up and reasonableness is based on a number of factors such as time of day,

market conditions, order size, maturity of the transaction, counterparty credit risk).

Generally, an important execution factor for our clients will be the price the relevant financial

instrument is executed at. As part of the price finding process for Equity Linked Product

transactions, we will also take into consideration a number of other execution factors such as

liquidity of the underlying, maturity of the transaction, counterparty credit risk and

platform/technology dependencies.

However, depending on the complexity of the product, client engagement in creating the

product/transaction and bespoke nature of the transaction, the primary execution factors may




vary, with likelihood and speed of execution potentially being a more important factor than

price.

For equity linked products, the following provides an example of the execution factors

prioritisation that may be applied:

1. Price

2. Size

3. Costs

4. Speed


6. Other Considerations.

As we trade Equity Linked Products on a principal basis, the execution venue will usually be

CMFRA and its affiliates. CMFRA will look to hedge its risks through a variety of Trading

Venues including brokers, exchanges and other dealers.

Bloomberg AllQ

BGC

CHU

CME

GFI

Nagoya Stock Exchange

Osaka Exchange

OTC

SBU

SGX Singapore Stock Exchange

ToSTNET

Tradeweb

Tradition

Tokyo Stock Exchange

Vantage Capital Markets LLP.

Credit

Typically executions in Credit securities are undertaken via two main approaches, via a resting

order or through a RFQ.

Most trading in the market for Credit securities happens through RFQ. When clients request

us to give them a quote, we will look at the four-fold test outlined in the CMFRA Client Order

Execution Policy to determine whether or not they are placing a legitimate reliance upon us

and will apply best execution only if it is determined that they are placing a legitimate reliance

upon us.

When seeking to execute a client resting order CMFRA will seek to fill their transaction as

soon as possible, at the target price or a better price, whilst applying a mark-up or spread as




compensation for our work and (residual) risks. This mark-up or spread will be within a range

of what we consider reasonable for the product type, tenor and size of the trade.

Generally, the most important execution factor for our clients will be the price the relevant

financial instrument is executed at. However, in more illiquid markets, the primary execution

factors may vary, as such, likelihood of execution may become the primary execution factor.

Subject to any Specific Instruction, the following provides an example of the execution factors


1. Price


3. Size

4. Costs

5. Speed


As we trade Credit securities on a principal basis often, the execution venue will usually be

CMFRA or our affiliates. Below, we list the other execution venues that we use frequently to

hedge our own market risk, or as a riskless principal, we may use them to fill a resting order

that you have left with us.

Barx

Bloomberg AllQ

BGC

Chicago Board Options Exchange

EMSX

Eurex

GFI

ICAP

Market Axess

OTC

Tradeweb

Tradition.

Rates

Typically executions in Rates securities are undertaken via two main approaches, via a resting

order or through a RFQ.

Most trading in the market for Rates securities instruments happens through RFQ. When you

request us to give them a quote, we will look at the four-fold test outlined in the CMFRA Client

Order Execution Policy to determine whether or not they are placing a legitimate reliance upon

us and will apply best execution only if it is determined that you are placing a legitimate reliance

upon us.




When seeking to execute your order CMFRA will seek to fill their transaction as soon as

possible, at the target price or a better price, whilst applying a mark-up or spread as



Generally, the most important execution factor for our clients will be the price the relevant

financial instrument is executed at. However, in more illiquid markets, the primary execution

factors may vary, as such likelihood of execution may become the primary execution factor.



1. Price


3. Size

4. Costs

5. Speed


As we always trade Interest Rate Products on a principal or riskless principal basis, the

execution venue will usually be CFRA or our affiliates. Below, we list the other execution

venues that we use frequently to hedge our own market risk, or as a riskless principal, we may

use them to fill a resting order that a client has left with us.

Barx

BGG

Bloomberg AllQ

Bond Broker

EMSX

Eurex

Osaka Exchange

OTC

Tradeweb

Tradition

Tokyo Stock Exchange.

Derivatives

CMFRA arranges derivative transactions between its clients and approved group booking

entities and does not execute derivative transactions on a principal basis. Thus the provision

of Best Execution will be a relatively rare occurrence.

For Derivative products, CMDP primarily trades in principal capacity providing responses to

client’s RFQ’s. As CMFRA operates in a competitive market for the execution of client RFQ’s

in derivatives, the expectation is that clients have access to multiple dealers and pricing

sources or alternatively employ independent benchmark advisers to assess market prices and

hence are in competition. Best execution obligations are unlikely to apply where clients have




asked us for a quote, as we generally take the view that in the context of the four-fold test

considerations there is no legitimate reliance being placed on us to meet the relevant best

execution requirements; however in all cases we endeavour to provide the most competitive

pricing achievable.

The markets for vanilla and complex interest rate, foreign exchange, cross currency and

commodity derivatives are in most instances well established and competitive, whereby

multiple market participants will stand ready to respond to clients’ RFQ/reverse inquiry or

requests for proposal (RFP). Such processes are carried out via direct requests through

meetings, voice, email or electronic messaging.

In relation to RFQs or reverse inquiries (e.g. the client approaches CMFRA to provide banking

services), where we provide quotes or negotiate a price with clients on request, we will not

generally presume to be receiving a Client Order where best execution will apply.

When transacting on a RFP basis, clients will usually, after an initial broad contest, choose a

small number of providers to discuss the transaction in detail. This process will eventually lead

to a (potentially exclusive) quote based on the parameters requested by a client. The time

between the initial client contact and the quote varies from a few days to a very protracted

period. As with RFQ/reverse inquiries, if CMFRA provides quotes or negotiates a price with

you based on your requirements, we will not generally presume to receive a Client Order

where best execution will apply.

In both of the above circumstances, we will make a determination of the transaction at the

time of quoting whether you are legitimately reliant on us. This will be based on the four-fold

considerations outlined in the CMFRA Client Order Execution Policy, meaning:

Where we deem a client to request or take a price in a competitive market, and where

they are not placing legitimate reliance on CMFRA, best execution will not apply. We

expect this to be the case in the majority of circumstances

Where clients legitimately rely on us to get them the best possible outcome, we will

provide best execution. We expect this to be the case only in exceptional

circumstances.

Furthermore, where you provide us with a specific instruction, such as the time an order should

be placed, to the extent that we follow such instructions, we have satisfied any best execution

requirements with respect to that aspect of the order.

CMFRA does not charge a commission but we do impose a mark-up/down or spread on where

the relevant group entities execute trades in the market and where we execute them with

clients (there is no agreed consistent mark up and reasonableness is based on a number of

factors such as, but not limited to, time of day, market conditions, order size, maturity of the

transaction, counterparty credit risk).

When seeking to execute a resting order CMFRA will seek to fill the transaction as soon as

possible, at the target price or a better price, whilst applying a mark-up or spread as






Generally, an important execution factor for our clients will be the price the relevant financial

instrument is executed at. As part of the price finding process for Derivative transactions, we

will also take into consideration a number of other execution factors such as liquidity of the

underlying, maturity of the transaction, counterparty credit risk and platform/technology

dependencies.

However, depending on the complexity of the product, client engagement in creating the

product/transaction and bespoke nature of the transaction, the primary execution factors may

vary, with likelihood and speed of execution potentially being a more important factor than

price.



1. Price


3. Size

4. Costs

5. Speed


As we trade Derivatives on a principal basis, the counterparty to the transaction will usually

be CMFRA and/or its affiliates. CMFRA will look to hedge its risks through a variety of trading

venues including brokers, exchanges and other dealers or on the OTC market; e.g.:

360T

Autobahn

Barx

Bloomberg FXGo

Bloomberg BBTI

OTC

Thompson Reuters FXAll

Tradeweb

XTrader




7. Product Governance

7.1 SMBC Nikko Capital Markets Europe GmbH as a Distributor

As a distributor of financial products we have certain obligations, including a requirement to

check the target market of the manufacturer and if necessary to identify a target market for

the products we distribute. We distribute products which have been manufactured either by

us or by third parties. We will distribute products and/or related services to you, only if they

are appropriate to you.

7.2 Onward distribution

To the extent you are not the end investor in any distribution chain for a particular product,

you will define your own target market for the relevant product having regard to your

knowledge of your own client base. Since we do not possess sufficient information in order to

assess whether all purchasers of products distributed by us fall within the relevant target

market, you should take into account the target market identified by the manufacturer and

confirm in each case that the relevant product meets your investment needs and objectives or

those of your underlying clients as the case may be.

7.3 Proportionality Types

We have categorised our investment products according to their risk and complexity into one

of three types:

Type 1 (Low) are those non-complex products (e.g. government bonds) for which it is

determined that our existing governance arrangements adequately address the

requirements of the product governance rules.

Type 2 (Medium) are those investment products (e.g. convertible bond or fixed/float

swap) for which it is determined that our existing governance arrangements provide a

strong framework to support the requirements of the product governance rules but that

certain additional protections are required.

Type 3 (High) are those investment products (e.g. structured notes or deal contingent

hedges) which require the highest level of protections to ensure compliance with

product governance rules. While existing governance arrangements and the additional

enhancements for Type 2 products provide a strong framework for Type 3 products,

certain additional protections are required

The overview of all products with their proportionality types can be found in section 7.5

7.4 Appropriateness

Since we offer only products to clients that are available to both professional clients and ECPs and only ever deal with Professional Clients and ECPs, thus there is no need at the current stage to consider the client category when perform a target market reconciliation / appropriateness test. When assessing appropriateness for non-advised services, a firm is also required to determine whether the client has the necessary experience and knowledge in order to understand the




risks involved in relation to the product or service offered or demanded. Where such an appropriateness test requirement applies in respect of a client, the firm may assume that a professional client or ECP has the necessary experience and knowledge in order to understand the risks involved in relation to those particular investment services or transactions, or types of transaction or product, for which the client is classified as a professional client or ECP. Thus, we take the following approach for the appropriateness test:

Where you request at your own initiative the provision of services in relation to the execution

or reception and transmission of your orders in respect of type 1 and 2 products, then, unless

otherwise agreed, we are not required to assess the appropriateness of such transaction or

service for you and you will not, therefore, have the benefit of certain conduct of business

regulations relating to the assessment of appropriateness.

Since type 3 products are highly complex and require specific background we will perform an

appropriateness check on a case-by-case basis (for the point of sale) if you wish to trade such

product and we may inform you on this assessment. Only if you have sufficient knowledge

and experience and understand the risks of type 3 products, thus are deemed appropriate you

may enter into a transaction.

7.5 Current product list and categorisation

Nr. Product Dept Product complexity Product type

1 Listed Japanese equities (incl. listed preferred stock)

ECM Non-complex 1

2 Listed J-REITs and Infrafunds ECM Non-complex 1

3 Non-Japanese equities / rights issues ECM Non-complex 1

4 Convertible Bonds ECM Complex 2

5 Third party allotment of Convertible Bond ECM Complex 2

6 Japanese Equities Equities Non-complex 1

7 Convertible Bonds Equities Complex 2

8 Covered Warrants Equities Complex 2

9 Repackaged warrants Equities Complex 2

10 Repackaged notes Equities Complex 2

11 Govt. bonds DCM Non-complex 1

12 Corporate bonds DCM Non-complex 1

13 Structured bonds (ABS etc.) DCM (SF) Complex 2

14 Structured Notes (inc. CoCo' AT1, CLN's etc.)

DCM (SF) Complex 2

15 Project Bonds DCM (SF) Complex 2

16 MTNs (private placement) DCM (SF) Non-complex 1





17 Uridashi DCM Complex 2

18 Namensschuldverschreibung DCM Non-complex 1

19 Corporate Bonds FIST Non-complex 1

20 Government Bonds FIST Non-complex 1

21 Structured notes ("self-led") FIST Complex 2

22 Structured notes FIST Complex 2

23 Nikko Warrants FIST Complex 2

24 Repackaged notes FIST Complex 2

25 Sukuk FIST Non-complex 1

26 Credit Default Swap (CDS) FIST Complex 2

27 Repo (internal) FIST Non-complex 1

28 Interest Rate Swap DPG Complex 2

29 Single Currency Basis Swap DPG Complex 2

30 Cap DPG Complex 2

31 Floor DPG Complex 2

32 Swaption DPG Complex 2

33 Caption DPG Complex 2

34 FRA DPG Complex 2

35 ND IRS DPG Complex 2

36 Cross Currency Swap DPG Complex 2

37 Long Term FX DPG Complex 2

38 FX Forward DPG Complex 2

39 EX Strategy DPG Complex 2

40 ND FX Forward DPG Complex 2

41 ND Cross Currency Swap DPG Complex 2

42 FX Swap DPG Complex 2

43 Mark to Market Basis Swap DPG Complex 2

44 Commodity Swap DPG Complex 2

45 Inflation Swap DPG Complex 2

46 Index CDS (internaI hedging only) DPG Complex 2

47 Single Name CDS ( internaI hedging only) DPG Complex 2





48 Deal Contingent Hedge (FX and IRS) DPG Complex 3

49 Flexible Start Swap DPG Complex 3

50

Exotic/Bespoke/Highly Complex Derivative products (may be a combination of Type 2 (medium) products above or other Exotic type product)

DPG Complex 3




8. Information about investment firm and Systematic Internaliser

8.1 Scope

SMBC Nikko Capital Markets Europe GmbH has elected to be a Systematic Internaliser (SI)

for the following non-equity asset classes / sub asset classes that are “Traded on a Trading

Venue” (TOTV) where we provide quotes:

Structured Finance Products

Sovereign Bonds

Other Public Bonds

Corporate Bonds

Convertible Bonds

Covered Bond

8.2 Provision of quotes

As an SI when we are requested for a quote in respect of a financial instrument which is traded

on trading venue and agree to provide a quote (an “SI quote”) outside of a trading venue, we

will make public such an SI quote where the quote is in respect of a “liquid instrument” and is

at or below the size specific to the instrument (SSTI). Note that we are not required to publish

(or to give you access to) quotes in instruments that are not deemed liquid by the European

Securities and Markets Authority (ESMA) or where the quote size is above SSTI.

8.3 Publication mechanism

Where we are obliged to make SI quotes public, these will be made available through

traxapa.com, which is our selected quote publication service.

Quote Identification

SI quotes published by SMBC Nikko Capital Markets Europe GmbH can be identified as

follows: Market Identifier Code (MIC) NCML

8.4 Access to quotes

If as an on-boarded client you are interested in trading on the same terms as a published SI

quote, you should note the SI quote ID and enquire with your usual SMBC Nikko Capital

Markets Europe GmbH contact via your regular method of communication who will confirm

whether the SI quote is still executable

8.5 Access criteria

We have established access criteria which we will take into account when determining whether

you may be given access to a published quote, which we apply in an objective and non-

discriminatory way. We may decline to trade with you at the published SI quote on the basis

of:

(a) commercial considerations, including risk limits and capital costs associated with our

relationship with you and the economic value of our relationship with you;




(b) operational considerations, including any operational preferences or requirements you may

have;

(c) legal and regulatory considerations, including whether you are on-boarded and in

compliance with the terms of any agreements with us, and whether there are any legal or

regulatory restrictions preventing us from dealing with you.

8.6 Quote validity

If the SI quote is no longer executable you may be offered an updated SI quote. We reserve

the right to update our published SI quotes at any time or withdraw such SI quotes without

cancelling or amending the published information due to exceptional market conditions.

Factors influencing whether the SI quote is still available include whether the SI quote has

already been executed against by another client, price movements, market conditions,

inventory status and the time elapsed since the provision of the SI quote. In any event SMBC

Nikko Capital Markets Europe GmbH reserves the right to limit the number of transactions it

is willing to enter into on the basis of a published SI quote to one transaction.

8.7 Reporting Obligations

Where we act as an SI and enter into a transaction in a TOTV instrument, we will support you

by virtue of our responsibility to make a post trade report.




9. General Terms of Business

9.1 General Information

1.1 These Standard Terms of Business, any accompanying documents as amended from time

to time, (together, these “Terms”), set out the terms of the contract between you and us. These

Terms constitute a contractual agreement having legal effect which you accept by beginning

or continuing to undertake business with us following receipt of these Terms.

1.2 Subject as otherwise stated herein, these Terms supersede any previous written or oral

agreement between the parties in relation to the matters dealt with in these Terms and contain

the entire agreement between the parties relating to the subject matter of these Terms at the

date hereof to the exclusion of any terms implied by law which may be excluded by contract.

1.3 To the extent there is a conflict between these Terms and any agreement referred to in

Clause 10 of this Terms, any Research and Corporate Access Agreement or any Research

Charge Collection Agreement (each a “Relevant Agreement”), the terms of such Relevant

Agreement will prevail.

1.4 Unless otherwise specified, these Terms govern all business transacted by us with or for

you and all Services provided by us to you, whether as principal, or as agent for our Affiliates,

in connection with Financial Instruments Business.

9.2 Client Categorisation

2.1 We have separately notified you of your status as a “professional client” or an “eligible

counterparty”. Subject to your right to request a different status referred to below, we will treat

you as such for all purposes. Categorisation is undertaken on the basis of our internal client

categorisation process. Different rules and different levels of protection apply to you depending

upon your client categorisation.

2.2 You have the right to request a different client categorisation from our categorisation of

you. In the event we intended to categorise you as a “professional client” and you request

categorisation as an “eligible counterparty”, should we agree to such categorisation, you

understand and are required to confirm in writing to us that you will be afforded a lesser degree

of protection. In such case, we will provide you with additional information for your confirmation.

If you request categorisation as a “retail client”, we will not provide you with any Services.

2.3 You agree that you are responsible for keeping us informed about any change that could

affect your client categorisation. Should we become aware that you no longer fulfil the

conditions that made you eligible for professional client or eligible counterparty treatment (as

applicable), we will reassess your circumstances and reclassify you accordingly.




9.3 Applicable Regulations and Exchange Action

3.1 These Terms, the provision of Services by us and/or any Affiliate and all Transactions are

subject to Applicable

Regulations so that: (i) if there is any conflict between these Terms and any Applicable

Regulations, the latter will prevail; and (ii) we and any Affiliate acting on our behalf may take

or omit to take any action we consider reasonably necessary to ensure compliance with any

Applicable Regulations and whatever we do or omit to do in order to comply with them will be

binding on you.

3.2 From time to time, an Exchange may require us in respect of Transactions in Financial

Instruments, to meet certain disclosure requirements or otherwise provide you with notice of

certain Exchange requirements. Any such requirement or notice will be deemed to form part

of these Terms when provided to you and will be binding on you accordingly.

3.3 If an Exchange (or intermediate broker, Clearing Member or agent, acting at the direction

of, or as a result of action taken by, an Exchange) takes any action which affects a Transaction

(including an action in respect of an Exchange Transaction), then we may take any reasonable

action which we, or the Exchange (or intermediate broker, Clearing Member or agent, acting

at the direction of, or as a result of action taken by an Exchange), at our, or its discretion,

considers desirable to correspond with such action or to mitigate any loss incurred as a result

of such action. Any such action will be binding on you.

3.4 We may refuse to enter into, execute, transmit, deal in or otherwise arrange any

Transaction, provide any Service or perform any obligation pursuant to these Terms where

such action or performance: (i) would cause us to breach any prohibition or restriction imposed

or specified by Applicable Regulations and/or an Applicable Regulator; (ii) would be prohibited,

or made impracticable to effect on reasonable commercial terms, by any suspension or

removal from trading of a Financial Instrument imposed by Applicable Regulations or an

Applicable Regulator pursuant to Applicable Regulations; or (iii) where we have agreed with

you or any other person that we are not obliged to, or shall not, make public or otherwise report

a Transaction, but we are nonetheless required by Applicable Regulations to report, publish

or arrange the publication of such Transaction (pursuant to a market transparency requirement

or otherwise), however, notwithstanding such agreement, we may publish or arrange the

publication of such Transaction and may delegate such reporting or publication to another

person.

9.4 Services

4.1 Pursuant to these Terms, we may provide in our sole discretion and in accordance with

Applicable Regulations, the following services in respect of Financial Instruments, unless

otherwise specified:

(a) execute Transactions upon your Instructions as principal (Eigenhandel or

Finanzkommissionsgeschäft) or agent (Abschlussvermittlung) in accordance with these

Terms, as appropriate;




(b) deal with (Eigenhandel) or for you as principal (Finanzkommissionsgeschäft) and/or as

your agent (Abschlussvermittlung) as appropriate, or arrange deals (Anlagevermittlung) in

accordance with these Terms;

(c) transmit orders on your behalf in accordance with these Terms (Anlagevermittlung);

(d) perform services in relation to underlyings rendered in connection with other Services

(“Services in relation to underlyings”); and

(e) provide other such services as may from time to time be agreed between you and us

(“Services”).

4.2 Our Services may be provided in relation to, amongst others, Derivatives and Securities

traded on Exchanges, including in Europe, the United States of America and Japan/other

Asian Exchanges.

4.3 We set out under chapter 3 above to these Terms a non-exhaustive list of the descriptions

of the risks involved in Transactions in certain types of Securities and Derivatives. By entering

into these Terms, you acknowledge and confirm you have read, understand and accept the

risk statements contained in chapter 3 above to these Terms.

4.4 Unless agreed in writing separately to these Terms, we will not provide any investment

advice or otherwise act on your behalf in deciding to effect Transactions nor do we recommend

whether or not a particular Transaction is suitable for you. We will not make any investment

or other decisions on your behalf. You have sole responsibility for making any investment

decisions. We will not give you investment, legal or tax advice in relation to any Transactions

or Services.

4.5 Notwithstanding Clause 4.4 of this Terms, we may, from time to time and at our own

discretion, provide you with information about Financial Instruments. However, we are not

obliged to provide you with continuous information nor advice in relation to any Financial

Instruments purchased (or proposed to be purchased) by you pursuant to these Terms or

otherwise and we give no representation, warranty or guarantee as to the accuracy or

completeness of such information.

9.5 Appropriateness

5.1 In respect of the Services, we may require you to provide information in relation to your

knowledge and experience in the investment field relevant to the specific type of product or

service (and updates to such information as necessary) relating to you, your agents,

employees, or others and you agree to provide such information as we may require.

5.2 Pursuant to Clause 2.1 of this Terms, on the basis that we have categorised you as a

“professional client” or an “eligible counterparty”, we assume, as we are entitled to do, that

you have the necessary experience and knowledge in order to understand the risks involved

in Transactions in respect of the Services for the purposes of assessing whether a Transaction

is appropriate for you (where we have an obligation to make such an assessment).




5.3 Where you request at your own initiative the provision of Services in relation to the

execution or reception and transmission of your orders in respect of Non-complex Instruments,

then, unless otherwise agreed, we are not required to assess the appropriateness of such

Transaction or Service for you and you will not, therefore, have the benefit of certain conduct

of business regulations relating to the assessment of appropriateness.

9.6 Use of Brokers, Introductory, Arranging and Order Routing Services

6.1 To effect Transactions in Financial Instruments, CM FRA may instruct a broker (“Broker”).

A Broker instructed by CM FRA may be an Affiliate. Unless agreed in writing to the contrary,

for Securities Business, CM FRA will remain

your counterparty to Transactions, when acting as principal.

6.2 Where agreed in writing, separately from these Terms, we may act solely in the role of an

introducer and introduce you to a Broker dealing in the relevant Financial Instruments for the

purposes of marketing and/or effecting any transactions in Financial Instruments (“Introduced

Broker”). In such circumstances, the Introduced Broker will be acting as principal as your

contractual counterparty to the Transactions. For the avoidance of doubt, we will not be your

contractual counterparty in respect of any Transactions entered into by you when carried out

by an Introduced Broker and in relation to any such Transactions in which you will be the client

of that Introduced Broker.

6.3 Where you deal with or through a Routing Broker or Introduced Broker, where relevant, its

execution policy will apply to the execution of the order.

6.4 CM FRA may provide an order routing service in Financial Instruments. Orders will be

routed to a Routing Broker. You are responsible for the proper entry and transmission of the

data relating to an order.

6.5 CM FRA reserves the right to refuse to route an order at any time and shall be under no

obligation to divulge the reason.

6.6 You understand that when you are responsible for placing, amending and cancelling

orders, their placing, amendment and cancellation shall be governed by Applicable

Regulations. Accordingly, amendment and/or cancellation of orders is not guaranteed.

6.7 You must ensure that all orders and Transactions made pursuant to this Clause 6 of this

Terms comply with Applicable Regulations.

6.8 All Transactions between you and an Introduced Broker, or a Routing Broker in respect of

which CM FRA provides order routing services, shall be subject to the terms of business (if

any) and any other agreement or arrangement between the relevant Broker and you

(“Introduced/Routing Broker Terms”). You may be required to enter into written

Introduced/Routing Broker Terms as a pre-condition to CM FRA introducing/routing your

orders to such a Broker.




6.9 As between CM FRA and you, if there is inconsistency between these Terms and

Introduced/Routing Broker Terms, these Terms will prevail.

6.10 CM FRA makes no representation or warranty as to the services provided by, or

creditworthiness of, Routing Brokers or Introduced Brokers. Where a Broker is an overseas

Broker then the services of that overseas Broker may not be regulated by BaFin.

6.11 You agree that:

(a) the acceptance or rejection of orders routed by CM FRA is at the discretion of the Routing

Broker or Introduced Broker (as applicable), and CM FRA has no responsibility therefore; and

(b) CM FRA shall not be liable for breach by a Routing Broker or an Introduced Broker of the

Broker’s terms.

9.7 Third Party Services

7.1 We may provide Services with or through our Affiliates or Third Party Providers. You

authorise us to use the services of Third Party Providers and Affiliates in our provision of the

Services without your further consent and on such terms as we may determine and without a

diminution of our rights.

7.2 Third Party Providers may include Exchanges. Exchanges have certain rules and

regulations with which we must comply. You must read such rules and regulations and

represent and warrant to us that you shall comply with such rules and regulations (to the extent

applicable) and any other terms and conditions that Third Party Providers require with respect

to your use of Third Party Services.

9.8 Execution Policy

8.1 Pursuant to section 82 WpHG, we are required to establish and implement an order

execution policy which demonstrates how we meet the requirement to obtain the best possible

result when executing and receiving and transmitting client orders. When executing orders on

behalf of clients, we will take all sufficient steps to achieve what is called "best execution" in

accordance with our best execution policy. We need to have in place policies and procedures

designed to obtain the best possible execution results.

8.2 Please be aware that where we act in response to a request for a quote, we will meet our

obligations to take all sufficient steps to obtain the best possible result for you by executing

the order immediately after the quote is provided if you accept the order immediately, or if the

quote is not accepted immediately, as soon as is reasonably practicable after the quote is

accepted by you, provided that, taking into account the changing market conditions and the

time elapsed between the offer and acceptance of the quote, the quote is not manifestly out

of date.

8.3 Where you give us specific instructions, including specifying the characteristics of a

bespoke product, either relating to an order or a particular aspect of an order, we will execute




so far as is reasonably possible in accordance with those instructions. This may prevent us

from taking the steps that we have put in place to obtain the best possible result for the

execution of your orders.

8.4 In the absence of express instructions from you, we will exercise our own discretion, having

regard for the terms of your order, in determining the relative importance of the execution

factors that we need to take into account for the purpose of providing you with Best Execution.

8.5 We may, in certain circumstances, execute your orders for Transactions outside a

regulated market, multilateral trading facility or organised trading facility.

8.6 We have the right to amend the execution policy in line with regulatory requirements and

we will inform you about any material change to our execution policy without undue delay by

the means of a communication pursuant to Clause 19 of this Terms.

9.9 Order Execution

9.1 Unless we have classified you as an eligible counterparty, we will execute your orders in

accordance with our execution policy.

9.2 Unless otherwise agreed between the parties in writing, you expressly consent to our

executing your orders outside of a regulated market, a multilateral trading facility or an

organised trading facility.

9.3 You expressly instruct us not to make public any limit order relating to a transaction in

Securities which is not immediately executed under prevailing market conditions.

9.4 We may, in certain circumstances, aggregate your order with our own orders and with

orders of other clients. In some cases, aggregation may result in you obtaining a less

favourable price than would otherwise have been the case.

9.10 Direct Electronic Access

Should CM FRA, or its Affiliates, provide you with direct electronic access, in relation to

Financial Instruments trading, to an Exchange: (i) without routing orders through CM FRA’s,

or its Affiliates’ internal electronic trading system; or (ii) through the use of a nominated

technical system or technical connection between us, your rights and obligations arising from

such provision will be set out in a separate, binding, written agreement.

9.11 Instructions

11.1 Unless otherwise notified by us, you may transmit your Instructions to us by any means

(including telephone and facsimile or in writing, including by email) and Instructions shall be

transmitted to us at your risk. Instructions shall not take effect unless actually received by us

and, in the case of any Instructions transmitted to any system, formally acknowledged by us.

We shall not be required to confirm any such Instruction prior to execution or otherwise, and

you agree to indemnify us and hold us harmless if you suffer any loss in reliance thereon.




11.2 We are not obliged to accept or execute any Instruction nor need we give any reasons

for declining to do so.

11.3 We shall be entitled to rely on and treat as binding any Instructions which we believe to

be from you and which we have accepted in good faith.

9.12 Unsettled Positions

12.1 Except as otherwise stated, CM FRA will have no responsibility for taking or failing to

take action in respect of any rights you may have under any Unsettled Position unless CM

FRA receives timely Instructions from you.

12.2 Where any action is taken by CM FRA or a third party pursuant to any Applicable

Regulations which affects any of your Unsettled Positions generally or corresponding

Exchange Transactions to which CM FRA is a party, CM FRA will make such allocation

amongst the affected customer Unsettled Positions as CM FRA thinks fit, to which allocation

you shall be bound. CM FRA shall use commercially reasonable efforts promptly to notify you

of such event, but will not be liable for any loss incurred by you as a result of such action or

any failure to notify.

9.13 Payment and Delivery

13.1 By entering into a Transaction in Financial Instruments you become unconditionally

obliged, in respect of each Unsettled Position resulting from such Transaction, to pay or deliver

such amount of cash or Financial Instruments to or at the direction of CM FRA within such

time as CM FRA may specify.

13.2 You will not be entitled to receive delivery of Financial Instruments or payment of cash

from CM FRA, nor to any right of ownership or other proprietary interest in or in relation to

such Financial Instruments or cash, in settlement of a Transaction unless and until you have

complied with Clause 13.1 of this Terms and CM FRA has received unconditional and final

delivery of such Financial Instrument (including, where relevant, payment or delivery of any

cash amounts or other assets that the Exchange or Clearing Member is permitted to make in

accordance with Applicable Regulations in lieu of, or in substitution for, its obligation to deliver

Securities) or payment of cash from the Exchange or Clearing Member.

13.3 If you fail to pay any sum when due in respect of a Transaction, interest will be payable

on the unpaid sum until payment is received. Interest will be calculated at one per cent above

EURIBOR. Such interest will be payable on demand and may be deducted by us from any

amount due to you from CM FRA or its Affiliates.

9.14 Position Limits

14.1 We will have the right, whenever we in our absolute discretion deem such action

necessary or desirable for the purposes of complying with Applicable Regulations, to limit or

require the reduction of the size and number of Unsettled Positions (net or gross) which may




at any time be outstanding, or to Close Out any one or more Unsettled Positions in order to

reduce the Unsettled Positions carried with us.

14.2 The BaFin or other national competent authorities will impose position limits in respect of

certain commodity derivatives, and position management controls may be imposed by an

Exchange. In order to ensure that such position limits and position management controls are

complied with, we may require you to limit, terminate or reduce positions at any time and we

may in our sole and absolute discretion close out any one or more Transactions.

9.15 Short-selling

You are required to advise CM FRA if any sale order given to CM FRA is a Short Sale and

CM FRA shall have the right to refuse to accept any Short Sale order.

9.16 Power to Borrow or Buy Securities

16.1 Without prejudice to any other remedy which CM FRA may have under these Terms or

Applicable Regulations, if at any time you fail to deliver Financial Instruments in compliance

with any obligation which you may have under these Terms, you authorise (but without

requiring) CM FRA:

(a) to borrow or to buy (for your account) such Financial Instruments necessary to make

delivery thereof and to deliver the same; and

(b) to purchase or otherwise acquire (for your account) Financial Instruments equivalent to

any Financial Instruments borrowed by us pursuant to our powers under sub-Clause (a) above

and to use such Financial Instruments to perform our obligations to the lender of such

Securities to deliver Securities equivalent to the borrowed Securities.

9.17 No holding of Client Money or Client Assets

17.1 Transactions will be settled on a delivery versus payment basis. Consequently, we will

not hold “client money” or “client assets” in the meaning of section 84 WpHG on your behalf

in connection with Transactions carried out under these Terms.

17.2 Where special circumstances result in us holding client money or client assets on your

behalf (such as upon the occurrence of a failed trade), we will hold those monies or assets in

accordance with the requirements stipulated in section 84 WpHG. As separately agreed

between you and us, you confirm that we may hold your money in an omnibus account.

9.18 Compensation Scheme

18.1 We are covered by the EdW. If you are an eligible claimant, you may be entitled to

compensation from the

scheme if we cannot meet our obligations. This depends on the type of business and the

circumstances of the claim. Claims under the EdW are subject to maximum limits on




compensation. The claim for compensation is limited to 90% of the liabilities from transactions

in Financial Instruments (with a maximum compensation limit of EUR 20,000).

18.2 Further information about the EdW is available on the EdW website (http://www.e-d-

w.de/en/index.html) and on request from your relationship manager.

9.19 Communications and Notices

19.1 Any notice or other communication in connection with these Terms shall be in writing and

sent by electronic mail to the email address most recently given. A notice or other

communication shall take effect from the time it is received. Notwithstanding the foregoing,

you consent to us communicating with you via notices posted to our website. We will

communicate with you, and you will communicate with us, in English.

19.2 The parties agree that electronic transmission of information cannot be guaranteed to be

secure or error free and could be intercepted, corrupted, lost, destroyed, arrive late or

incomplete or otherwise be adversely affected or unsafe to use and they will both use

commercially reasonable procedures to check for the then most commonly known viruses

before sending electronically. The parties recognise that such procedures cannot be a

guarantee that transmissions will be virus free and they shall each be responsible for

protecting their own interests in relation to electronic communications and for ensuring that an

electronic communication is not misaddressed.

9.20 Reporting Trading Information

20.1 We will not make any trade or transaction reports for you in respect of Transactions,

unless otherwise agreed with you in writing, or unless such obligation to report falls upon us

whilst acting as a Systematic Internaliser.

20.2 We may be required to report details in respect of Transactions to a relevant regulatory

authority pursuant to Applicable Regulations (including under Article 26 MiFIR) or to a trade

repository or otherwise in accordance with Applicable Regulations (“Transaction Reporting

Requirements”).

20.3 We may from time to time require you to provide all information (and updates to such

information as necessary) relating to you and your agents, employees, underlying principals

or others as we may reasonably require in order to comply with any market transparency

requirements and Transaction Reporting Requirements as we may reasonably believe may

arise in respect of your Transactions. You agree you will deliver to us such information and

represent to us that such information delivered is, at the time of delivery, true, accurate and

complete in every material respect and you acknowledge and agree that we may rely on the

information without investigation, unless and until you inform us otherwise. You undertake to

provide us, on reasonable notice, with any material changes or updates to this information.

20.4 We may refuse to enter into, execute, transmit, deal in or otherwise arrange any

Transaction where you have not provided such information (and waived or procured the waiver




of any confidentiality or data protection/privacy obligations in respect of such information) as

we may reasonably require: (i) in order for us to comply with any Transaction Reporting

Requirements or market transparency requirements in respect of a Transaction; or (ii) where

our non-receipt of such information (including, without limitation, an applicable legal identifier

code) would mean that we are prohibited by Applicable Regulations from entering into,

executing, transmitting, dealing or otherwise arranging (as the case may be) such Transaction.

20.5 The parties shall, before concluding a Transaction outside the rules of an Exchange

(whether acting as, or on behalf of, the buyer or seller thereof), confirm to each other whether

each is a Systematic Internaliser in respect of the relevant Transaction.

20.6 Unless otherwise agreed, we will provide you with trading confirmations promptly

following the execution of an order with essential information concerning the execution of the

order in accordance with applicable rules on reporting information to clients. We will supply to

you, on request, information about the status of your order.

9.21 Information provision

To the extent that we request information, documentation or assistance from you to comply

with internal policies and procedures and/or Applicable Regulation, this shall be promptly

provided to us. You acknowledge and agree that we are expressly permitted to make certain

information public and/or to provide information to one or more regulators, where we

reasonably consider that we are required to do so by Applicable Regulations. No prior notice

shall be given to you.

9.22 Your Representations, Warranties and Undertakings

22.1 You represent, warrant and undertake to us, as of the date of these Terms and as of the

date of each Transaction, that:

(a) you have all necessary authority, powers, consents, licences, approvals and authorisations,

and have taken all necessary action to enable you lawfully to enter into and perform your

obligations under these Terms and each Transaction;

(b) these Terms, each Transaction and the obligations created under them are binding upon

you and enforceable against you in accordance with their terms and do not and will not violate

the terms of any Applicable Regulations, charge or agreement by which you are bound;

(c) at the time of transfer by you of any Financial Instruments, you will have full and unqualified

right to make such transfer and upon such transfer the transferee will receive all right, title and

interest in and to those Securities free from any adverse interest;

(d) all information which you have and will provide to us is true, complete and accurate and

you will promptly provide us with any further information properly required from time to time

by any competent authority, Exchange, Affiliate, Third Party Provider or us, as applicable;




(e) you are familiar with the Exchange rules and you will not take any action or make any

omission that will cause any person to be in breach of or in default under the Exchange rules;

(f) in using the Services, you will comply at all times with, and not in any way violate, any

Applicable Regulations; and

(g) you represent and warrant that your use of the Electronic Services, as applicable, will be

for the purposes of your business, trade or profession. The parties acknowledge and agree

that the

requirements of the E-Commerce Directive (2000/31/EC), as implemented in the United

Kingdom and Germany, are excluded to the fullest extent permissible by law.

22.2 You will notify us promptly if there is any material change in any such information provided,

or if any of the above representations shall materially change or cease to be true and correct.

9.23 Appointment of an Agent

23.1 You may only appoint and use an agent or agents to act on your behalf in respect of your

dealings with us under these Terms, including entering into Transactions, performing your

obligations under these Terms and providing us with Instructions (“Agent”), if the following

conditions are met:

a) prior to acting as Agent, the Agent agrees to be bound by the contractual terms in Schedule

2 (“Agency Agreement”). Such agreement shall only be effective once Schedule 2 is returned

to us, completed and validly signed and dated by the Agent; and

(b) you fulfil your obligations in this Clause 23 of this Terms

23.2 You represent, warrant and undertake to us that:

(a) your appointment of the Agent is lawful and in compliance with Applicable Regulations;

(b) the Agent has the necessary authority from you to act on your behalf to contractually bind

you to these Terms and Transactions;

(c) the Agent has the necessary authority from you to act on your behalf to contractually bind

you to other agreements that are specifically contemplated in these Terms;

(d) the Agent has the necessary authority from you to act on your behalf to provide any

consents on your behalf and respond to the consent letter accompanying these Terms; and

(e) the Agent has the necessary authority from you to act on your behalf to undertake business

with us in accordance with these Terms, including entering into Transactions, performing your

obligations under these Terms and providing us with Instructions regarding Financial

Instruments Business.

23.3 Upon receipt of a validly signed and dated Agency Agreement, you agree that we may

discharge our obligations to you under these Terms by relying on and dealing with and

providing the Services to an Agent acting on your behalf.

23.4 You shall notify us immediately if a person is no longer appointed as your Agent. Upon

receipt of such notification, we shall cease to treat such person as your Agent.




23.5 Where you validly appoint an Agent, any actions of the Agent under these Terms,

including providing Instructions and orders, shall be deemed to be your own actions.

9.24 Liability

24.1 Subject to Clauses 24.2 to 24.5 of this Terms below and unless otherwise provided in

these Terms, we will not be liable for any loss, liability, damage or expense which may be

sustained by you unless such loss arises solely and directly from negligence, wilful default,

dishonesty or fraud by us or any of our officers, directors or employees.

24.2 We will have no liability for any partial or total non-performance of any Service if such

partial or total non-performance of results from any event or state of affairs beyond our

reasonable control including, without limitation, any failure of communication or computer

systems or equipment or suspension of trading by any Exchange, clearing bank or the

Custodian or any other Third Party Provider.

24.3 We accept no responsibility for any loss, liability, damage or expense that arises out of a

failure by you to provide information reasonably requested by us (or our Affiliates) or by reason

of such information being incomplete or inaccurate.

24.4 We accept no responsibility for:

(a) losses, whether direct or indirect, of profits, revenue or of data; or

(b) any indirect, consequential or incidental losses,

regardless of whether the possibility of such losses was disclosed to, or could reasonably have

been foreseen by us.

24.5 Nothing in these Terms shall exclude or limit any duty or liability which we may have

which may not be excluded or restricted pursuant to Applicable Regulations.

24.6 References in this Clause 24 and Clause 26 of this Terms to us include references to our

Affiliates and any Third Party Providers, and their respective officers, directors, employees,

agents and licensors.

9.25 Indemnity

25.1 You will indemnify us and our Affiliates and respective personnel on demand against all

proceedings, reasonable fees and expenses, payments, liabilities, injury, costs (including,

without limitation, the reasonable costs of professional advisors) and damages arising out of

any breach by you of these Terms.

25.2 You will indemnify and will keep us and our Affiliates and their respective personnel

indemnified against all reasonable costs, charges, liabilities and reasonable expenses

whatsoever incurred by any of them (including but not limited to all costs, charges, liabilities

and expenses arising out of any claims, actions or proceedings brought against us by Third




Party Providers) pursuant to or in connection with these Terms and the provision of the

Services (including but not limited to any Third Party Services) and including in connection

with any Transaction effected on your behalf, at your request or otherwise in order to comply

with your Instructions unless due to our wilful default, dishonesty or fraud, including in respect

of all fees, taxes, and charges incurred by us or otherwise payable by us.

9.26 Default

26.1 You must notify us immediately upon becoming aware that an Event of Default has

occurred.

26.2 Following the occurrence of an Event of Default we may, without prior notice to you, take

any and all actions that we reasonably consider to be necessary or desirable in the

circumstances, including (without limitation):

(a) to withhold delivery of Financial Instruments or payment of cash to you that we would

otherwise be required to make in connection with any Transactions;

(b) to buy-in or sell-out Financial Instruments for your account and at your risk in settlement of

an Unsettled Position;

(c) to charge you interest on any payment which is overdue from you at such rate and on such

basis as we customarily charge for unauthorised

overdrafts accruing from the date such payment is due; and

(d) we reserve the right to Close Out any Transaction if we determine in our reasonable

discretion that such action is required by Applicable Regulations or is otherwise necessary or

reasonable for the purposes of limiting risk and you agree to indemnify us for any loss we

suffer as a result of taking such action. In each case, we shall use commercially reasonable

efforts promptly to notify you of such event, but will not be liable for any loss incurred by you

as a result of such action or any failure to notify.

In each case, we may carry out any such action in such manner and on such terms as we in

our absolute discretion think fit and we shall not be responsible for any losses occasioned by

such action.

26.3 Following the occurrence of an Event of Default, we may by notice to you:

(a) terminate or suspend these Terms in whole or with respect to one or more Exchanges with

immediate effect;

(b) demand performance by you of your obligations to us in such manner as is determined by

us; or

(c) seek repayment of any losses suffered by us in consequence of the Event of Default.

26.4 Upon the occurrence of an Event of Default, we shall have the right without prior notice

to you to set off or apply any obligation of yours owed to us or any of our Affiliates (whether or




not arising under these Terms, matured or contingent and irrespective of currency, place of

payment or booking office of the obligation) against any obligation owed to you by us or any

of our Affiliates (whether or not arising under these Terms, matured or contingent and

irrespective of currency, place of payment or booking office of the obligation). For the purpose

of cross-currency set-off, we may convert either obligation at the applicable market exchange

rate selected by us on the relevant date. If an obligation is unascertained, we may estimate

that amount and set-off in respect of that estimate, subject to the relevant party accounting to

the other when the amount of the obligation is ascertained. Nothing in this Clause 26 of this

Terms will be effective to create a charge or other security interest.

9.27 Conflicts Policy

We have policies and procedures to identify, consider and manage potential conflicts of

interest and protect the integrity of our relationships with our clients. Our personnel are

required to comply with such policies and procedures and may not do anything directly or

indirectly that is prohibited thereunder. A copy of our conflicts policy is available on request.

9.28 Client Reports

28.1 We shall provide reports to you in relation to the execution of Transactions as may be

required in accordance with Applicable Regulations.

9.29 Fees, Charges and Payments

29.1 We will notify our charges to you separately from time to time.

29.2 You agree that, notwithstanding our requirement to provide you with information on costs

and associated charges under

Applicable Regulations, and excluding any costs and charges in connection with any

Transactions that embed a derivative, we may provide you with only certain details in respect

of such costs and charges where agreed with you.

29.3 Where permitted by Applicable Regulations, we may share charges with, or receive

remuneration from, third parties (including Affiliates) in respect of Transactions we carry out

with or for you, or we may be acting on both sides of the Transaction. We will provide you with

further details in respect of any such charges.

29.4 Without prejudice to Clause 8 or 9 of this Terms, we may, in certain circumstances, apply

a mark-up or mark-down in the price of a Transaction in Financial Instruments, which is likely

to vary on a transaction-by-transaction basis. Any mark-up or mark-down applied to client

Transactions by us will be fair and reasonable, and shall be included in the final price of a

Transaction in order to compensate us (as the market participant) for a number of

considerations, which might include risks taken, costs incurred, and services rendered.

29.5 Unless we agree otherwise, all money payable by you will be paid using immediately

available, freely convertible funds in the relevant currency on the due date regardless of any

right of equity, set-off or counterclaim that you may allege against us.




9.30 Taxes

30.1 All sums payable by you will be paid free and clear of any taxes, unless you are required

by law to withhold or deduct tax. In this case, unless we agree otherwise, you will pay an

additional amount so that we receive an amount after withholding or deduction of tax that

equals the amount that we would have received without such withholding or deduction.

30.2 You are responsible for paying any taxes due and making claims relating to taxes (such

as for exemption from withholding tax), for filing any tax returns and for providing information

to the tax authorities in relation to any business we carry on with or for you. You agree to

reimburse us for any fees (including irrecoverable VAT, if any) we incur on your behalf or

otherwise in connection with the provision of the Services to you in accordance with these

Terms.

9.31 Confidentiality and Privacy

31.1 We are not obliged to disclose to you, or to take into consideration in providing the

Services, information where the disclosure of it to you would be a breach of duty or confidence

to any other person.

31.2 Neither party will disclose any information relating to the other party obtained in

connection with these Terms, including information relating to these Terms, the Services or

any Transaction, to any third party except: (i) with the consent of the other party; (ii) as is

reasonably necessary to implement or perform these Terms, including (without limitation)

disclosure to Exchanges, clearing houses, brokers and other intermediaries and

counterparties; (iii) as is required by court order or otherwise by Applicable Regulations; (iv)

to Applicable Regulators, on their request; (v) to its personnel, professional advisers, other

service providers and insurers on a need to know basis; and (vi) to its Affiliates which are

subject to confidentiality obligations.

9.32 Termination

32.1 These Terms shall continue in full force and effect until terminated by us or you by written

notice from one party to the other. Such notice may be given no less than thirty (30)

days prior to the date of termination, provided that such notice may be immediately effective

following your Event of Default.

32.2 Termination shall be without prejudice to the completion of Transactions already initiated

and will not affect outstanding rights or liabilities.

9.33 General

33.1 Notwithstanding any other provision of these Terms, we may delegate the performance

of all or part of our duties and obligations to an Affiliate. Our liability under these Terms shall

not be affected by any such delegation.




33.2 Neither the relationship between us and you, nor the Services to be provided by us nor

any information provided to you, nor any other matter, shall give rise to any fiduciary or

equitable duties on our part which would oblige us (or any of our Affiliates or agents) to accept

responsibilities more extensive than those set out in these Terms.

33.3 These Terms may be amended or supplemented by us by delivery to you of the

amendments or revised Terms. An amendment or supplement which is made to reflect a

change of Applicable Regulations may take effect immediately or otherwise as we may specify.

Any other amendment or supplement will take effect no earlier than ten (10) days after we

deliver the notice. No other amendment to these Terms shall be effective unless in writing and

signed by a duly authorised representative of us.

33.4 Neither these Terms nor any rights, powers, liabilities or obligations under or pursuant to

these Terms may be transferred or assigned by you or by us without the prior consent of the

other party (such consent not to be unreasonably withheld or delayed), save that we may,

upon dispatch of written notice to you, transfer to an Affiliate any or all of our rights, powers,

liabilities and obligations under or pursuant to these Terms. The parties agree that these

Terms shall extend to and be binding upon their respective successors and assigns.

33.5 Our rights and remedies under these Terms are cumulative and are not exclusive of any

rights or remedies provided by law or by any other agreement. No waiver by us of any Event

of Default or breach of any obligation arising under these Terms shall constitute a waiver of

any other such event or breach and no exercise or partial exercise by us of any remedy shall

constitute a waiver of the right subsequently to exercise that or any other remedy.

33.6 Each provision of these terms is severable and if any provision (or any part of any

provision) of these Terms is or becomes invalid under, or contravenes, any Applicable

Regulations, the remaining provisions (and, where applicable, the remainder of the provision

in question) shall not be affected and shall remain in full force.

33.7 So far as is permitted by Applicable Regulations and except in the case of fraud, you

agree and acknowledge that your only rights and remedies in relation to any representation,

warranty or undertaking made or given in connection with these Terms shall be for breach of

the terms of these Terms, to the exclusion of all other rights and remedies (including those in

tort or arising under statute).

33.8 Subject to Clauses 24and 25 of this Terms (which shall confer rights upon third parties

as contemplated therein), nothing in these Terms is intended to confer any rights on any

person not a party under the Contracts (Rights of Third Parties) Act 1999. No consent of any

third party shall be needed for the termination or amendment of any terms of these Terms.

33.9 These Terms and any non-contractual matters in connection with them will be governed

by and construed in accordance with English law. The parties agree that the courts of England

have exclusive jurisdiction to settle any dispute arising out of or in connection with these Terms

(including a dispute regarding the existence, validity or termination of these Terms) or the

consequences of their nullity (a "Dispute"). The parties agree that the courts of England are




the most appropriate and convenient courts to settle Disputes and, accordingly, that they will

not argue to the contrary.

33.10 If you do not have your registered office or principal place of business in England, you

must immediately appoint a party as an agent for service in England and notify us of such

appointment as soon as is practically possible.

33.11 Each provision of these Terms shall only apply to those Financial Instruments as is

relevant and applicable.

9.34 Interpretation

34.1 In these Terms, the following words and expressions have the following meanings:

Agency Agreement has the meaning defined in Clause 23.1(a) of this Terms;

Agent has the meaning defined in Clause 23.1 of this Terms;

Affiliate means any entity that directly or indirectly controls, is controlled by or is under

common control with us, including, without limitation, joint ventures;

Applicable Regulator means each of the BaFin, Deutsche Bundesbank, the European

Securities and Markets Authority and any other relevant regulatory authority regulating us

and/or you in any jurisdiction;

Applicable Regulations means any laws or regulation of Germany, the European Union

(including MiFID2, MiFIR, and all delegated acts issued thereunder) and any other jurisdiction

applicable to the provision of services to you by us under, or in connection with, these Terms;

and any other applicable principle, rule, guidance, decision, determination, ruling, article, by-

law, procedure, usage and custom of the BaFin, Bundesbank or other relevant regulatory body,

Exchange, clearing system, custodian to the provision of services to you by us under, or in

connection with, these Terms, as may be amended, extended, consolidated, substituted or re-

enacted from time to time;

BaFin means the Bundesanstalt für Finanzdienstleistungsaufsicht;

Broker has the meaning defined in Clause 6.1 of this Terms;

CCP has the meaning given to it Article 2(1) of EMIR;

Clearing Member means any third party which is a clearing member of any CCP or Exchange

and which has been appointed by us to provide us with clearing and settlement services in

respect of orders placed by you;

Close Out means, in relation to a Transaction, to close out, unwind, cancel or otherwise

terminate or allow to expire, and Closing Out and Closed Out shall be interpreted

accordingly;

CM FRA means SMBC Nikko Capital Markets Europe GmbH;

Custodian means the person you have designated to safeguard and administer your assets;

Derivatives means Exchange-traded and/or over the counter derivatives;

Derivatives Business means all business undertaken by us in respect of Derivatives,

including the trading of Derivatives;

Dispute has the meaning defined in Clause 33.9 of this Terms;

EdW means Entschädigungseinrichtung der Wertpapierhandelsunternehmen, the German

statutory compensation scheme established under the German implementation of Council

Directive 97/9/EC;




EEA means the European Economic Area from time to time, which currently comprises the

member states of the European Union, Iceland, Liechtenstein, Norway and, where the context

requires, references to an EEA State include references to Gibraltar as appropriate;

Electronic Services includes all electronic communications between you and us including

but not limited to access to and use of systems that route orders and any related software or

hardware we may provide to you to enable you to use such services including those which

may be provided pursuant to Clause 10 of this Terms;

EMIR means the Regulation (EU) No 648/2012 of the European Parliament and of the Council

of 4 July 2012 on OTC derivatives, central counterparties and trade repositories;

EU Market Abuse Regulation means Regulation (EU) No 596/2014 of the European

Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation)

and repealing Directive 2003/6/EC of the European Parliament and of the Council and

Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC;

Event of Default means any of:

(a) a material breach of any of your obligations under these Terms or any other agreement

entered into with us;

(b) any representation or warranty by you is incorrect when made or repeated or deemed to

have been made or repeated;

(c) the initiation of any criminal, disciplinary or enforcement action against you by any

regulatory authority or Exchange,

(d) the commencement of any insolvency, liquidation, administration, reorganisation or

analogous proceeding with respect to you; and/or

(e) an event of default or similar event occurs under any other agreement between us;

Exchange means any market (including a multilateral trading facility, organised trading facility

or alternative trading system) on which we agree to provide dealing services to you under

these Terms;

Exchange Transaction means a transaction entered into on an Exchange to which we are

party as principal or agent;

Execution Venue means a trading venue (or its operator), a Systematic Internaliser or a

market maker or liquidity provider (each within the meaning contemplated under MiFID2);

Financial Instruments refers to the definition of Finanzinstrument provided for in the WpHG;

Financial Instrument Business means all business undertaken by us in respect of Financial

Instruments, including the sale, purchase and trading of Financial Instruments, including but

not limited to Securities Business and Derivatives Business;

Instructions means any instructions given by you in respect of your account, allocations to

such accounts, or the Services provided to you by us pursuant to these Terms including,

without limitation, an instruction to enter into a Transaction with or for you;

Introduced Broker has the meaning defined in Clause 6.2 of this Terms;

Introduced/Routing Broker Terms has the meaning defined in Clause 6.8 of this Terms;




loss includes any loss, cost, liability, expense or damage (including without limitation all

reasonable legal fees and expenses);

MiFID2 means the Directive 2014/65/EU of the European Parliament and the Council of 15

May 2014 on markets in financial instruments and amending Directive 2002/92/EC;

MiFID2 Delegated Regulation means the Commission Delegated Regulation (EU) 2017/565

of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and the

Council as regards organisational requirements and operating conditions for investment firms

and defined terms for the purposes of that Directive;

MiFIR means Regulation (EU) No 600/2014 of the European Parliament and the Council of

15 May 2014 on markets in financial instruments amending Regulation (EU) No 648/2012;

Non-complex Instrument means a financial instrument listed in section 63 para. 11 no 1

WpHG which is considered to be non-complex for the purposes of Article 25(4)(a) of MiFID2

in accordance with Article 57 of the MiFID 2 Delegated Regulation;

parties means the parties to these Terms;

Relevant Agreement has the meaning defined in Clause 1.3 of this Terms;

Research and Corporate Access Agreement means any contract titled as “Research

Agreement”, “Corporate Access Agreement” and/or “Research and Corporate Access

Agreement” entered into between the parties or any contract under which we agree to provide

research services and/or the service of introducing corporate issuers to you;

Research Charge Collection Agreement means any contract titled as “Research Charge

Collection Agreement” or any contract under which we agree to provide the service of

collecting fees paid by you for research;

Routing Broker means a broker specified by you to which you wish us to route an order;

Securities means any of debt instruments or shares;

Securities Business means all business undertaken by us in respect of Securities, including

the sale, purchase and trading of Securities;

Securities Financing Transaction has the meaning given to it in Article 1(3) of the

Commission Delegated Directive (EU) 2017/593 of 7 April 2016 supplementing Directive

2014/65/EU of the European Parliament and of the Council with regard to the safeguarding of

financial instruments and funds belonging to clients, product governance obligations and the

rules applicable to the provision or reception of fees, commissions or any monetary or non-

monetary benefit;

Services has the meaning defined in Clause 4.1 of this Terms;

Services in relation to underlyings refers to the services referenced in sect. 2(9) no 7 of the

WpHG;

Short Sale has the meaning given to it in Article 2(1)(b) of the Short Selling Regulation;

Short Selling Regulation means Regulation (EU) No 236/2012;

Systematic Internaliser has the meaning given to it in Article 4(20) of MiFID2;

Terms has the meaning defined in Clause 1.1 of this Terms;

Third Party Provider means any third party appointed by us and/or our Affiliates to provide

Services or access pursuant to Clause 7 of this Terms;

Third Party Services means Services provided through our Affiliates or Third Party Providers;

Transaction means any transaction contemplated or executed by or between you and us, or

any third party, pursuant to these Terms;

Transaction Reporting Requirements has the meaning defined in Clause 20.2 of this Terms;




Unsettled Position means, at any time, any Transaction, in respect of which your obligations

to either deliver Financial Instruments or to pay cash to CM FRA which remains to be fulfilled,

either in full or in part; and

WpHG means the German Securities Trading Act (Gesetz über den Wertpapierhandel –

Wertpapierhandelsgesetz).

34.2 In these Terms:

(a) references to any provision of any Applicable Regulations include a reference to that

provision as amended, extended, consolidated, substituted or re-enacted from time to time;

and

(b) words defined in Applicable Regulations shall have the same meaning as in those

Applicable Regulations, unless otherwise defined herein or the context requires otherwise.




10. Your Notes

Documents

MiFID Information Brochure