Annexes & Schedules

CUSTODY ANNEX

1

SCOPE

1.1

Application: This Annex applies to assets transferred to us for your account or accounts for
safekeeping. It does not apply to any non-cash margin transferred to us in accordance with paragraphs
7, 8 and 9 of the Margin Annex.

1.2

Appointment of custodian: You agree that we act as custodian of your assets which we may from time
to time safeguard and administer under this Agreement.

1.3

Types of accounts: We shall open in your name one or more custody accounts recording any shares,
stocks, debentures, bonds, securities or other similar property (including evidence of or title to securities
and all rights in respect of securities) deposited or transferred by you or on your behalf with or to us or
our sub-custodian or collected by us or our sub-custodian for your account ("Custody Assets"). We at
all times reserve the right to reverse any provisional or erroneous entries (including reversals necessary
to reflect adjustments by our sub-custodian to its records as a result of bad deliveries) to the custodyaccounts with effect back-valued to the date upon which the final or correct entry (or no entry) shouldhave been made.

1.4

Statements: We shall provide you with periodic statements concerning the Custody Assets that we holdfor you, as required by Article 63 of the MiFID2 Delegated Regulation. We shall provide suchstatements at least as frequently as required by Applicable Regulation, unless you request suchstatement more frequently, in which case we shall charge a commercial cost for such provision.

2

ARRANGEMENTS FOR CUSTODY

2.1

Registration: Custody Assets which are in registrable form may be registered in your name or in thename of a nominee company. You agree that registrable Custody Assets may also be registered in thename of our sub-custodian, a third party or in our name, but only if, the particular Custody Asset issubject to the law or market practice of an overseas jurisdiction and due to the nature of the law ormarket practice of that overseas jurisdiction, it is in your best interests or is not feasible to do otherwiseand (i) if registering in the name of a third party, we are prevented from registering the Custody Assets
in your name or the name of a nominee company, or (ii) if registering in our name, we are prevented
from registering the Custody Assets in your name, the name of a nominee company or in the name ofa third party.

3

SUB-CUSTODIANS

3.1

Use of Third Parties: We may from time to time delegate to sub-custodians, nominees, agents,
depositories, clearing houses and clearing systems inside or outside the United Kingdom and which
may include entities within the same group as us any of our duties under these custody terms including(without limitation) the safekeeping of the Custody Assets (together "Third Parties"). We are notgenerally liable for acts or omissions or insolvency of any Third Party, except that we accept
responsibility to you for any nominee company controlled by us, or controlled by any of our AffiliatedCompanies, to the extent required by the FCA Rules. Consequently, if the Third Party becomesinsolvent, there may be some risk to your Custody Assets.

3.2

Holding by sub-custodians: Sub-custodians may hold the Custody Assets at your risk and on suchterms and conditions as the sub-custodian may require. In addition, sub-custodians shall hold Custody2

Assets subject to Applicable Regulations and usages including, without limitation, any Applicable
Regulations applicable to the sub-custodian. Subject to paragraph 4, we shall be entitled to grant to
sub-custodians, and sub-custodians may have, liens and/or other security interests over the Custody
Assets.
3.3

Custody Assets held by Third Parties: Your Custody Assets may be held overseas by a Third Party on
our behalf. Furthermore:(a) Your Custody Assets may be held in an omnibus account by the Third Party, and there is a risk thatyour Custody Assets could be withdrawn or used to meet obligations of other persons, or that thebalance of assets held by the Third Party does not reconcile with the quantity which the Third Party
is required to hold, and you may not in such circumstances receive your full entitlement of Custody
Assets;(b) In some jurisdictions it may not be possible to identify separately the Custody Assets which a Third
Party holds for clients from those which it holds for itself or for us, and there is a risk that your Custody
Assets could be withdrawn or used to meet the obligations of the Third Party, or lost altogether if theThird Party becomes insolvent;(c) An account containing your Custody Assets may be subject to the laws of a non-EEA jurisdiction,and in such case your rights in relation to those Custody Assets may be different from your rights to
Custody Assets held in an account subject to the laws of an EEA jurisdiction ; and(d) We may use a Third Party in a country which is not an EEA state and where the holding andsafekeeping of financial instruments is not regulated. We will only do so when the nature of the
Custody Assets or of the services provided to you connected with those Custody Assets requires them
to be deposited with such a Third Party or where you have requested us in writing to deposit Custody
Assets with a Third Party in the relevant non-EEA state.

4

LIENS AND SET-OFF RIGHTS:

4.1

Third Party security interests: Where any of your Custody Assets are held with a Third Party (including
a depository), such Third Party may have a security interest, lien or similar rights over your Custody
Assets. We may create (or allow to be created) a security interest, lien or right of set-off in favour of a
Third Party (a "Third Party Security Interest") over or in respect of your Custody Assets where thecreation of such Third Party Security Interest is permitted by CASS 6 of the FCA's Client/Counterparty
Assets Sourcebook.

4.2

Default risk: Where Third Party Security Interests are created there is the risk that where we (or any
other person whose obligations are secured by, or set-off against pursuant to, such Third Party Security
Interests) defaults on our obligations towards the relevant Third Party, or in other circumstances,including without limitation, where the Third Party anticipates that such obligor may default on its
obligations (including, for example, due to the onset or potential onset of insolvency proceedings), thensuch Third Party may enforce its rights over (or set-off its obligations against) your Custody Assets
and, as a consequence, you may lose and not be able to recover such assets from us or from the Third
Party, regardless of whether you are in actual or potential default of your obligations to us or any otherperson.

4.3

Consent: You agree that a Third Party Security Interest may be created (or may already have beencreated) and that a person, entity or undertaking other than us may therefore have a security interest,3

lien or (if applicable) right of set-off over your Custody Assets where allowed under Applicable
Regulation.
5

INSTRUCTIONS

5.1

Authorised Persons: You shall provide us with a list of the officers, employees or agents who haveauthorised, either alone or with others, to act on your behalf in the giving of Instructions (as defined
below) and performance of any other acts, discretions or duties under these custody terms ("Authorised
Person(s)") together with specimens of their signatures if written instructions are to be given. We shallbe entitled to rely upon the continued authority of an Authorised Person for those purposes until we
receive notice from you to the contrary.

5.2

Instructions: Notwithstanding any agreement between you and us, we may act upon instructions("Instructions") in respect of the safe custody service provided by us to you under these custody terms
from an Authorised Person received by us via telephone, telex, facsimile transmission or otherteleprocess or electronic instruction system acceptable to us and transmitted with such testing or
authentication as we may specify. Instructions shall continue in full force and effect until cancelled orsuperseded. If any instructions are received by us by telephone you shall confirm them before the closeof business on the same day by another method acceptable to us. We shall be authorised to follow
Instructions notwithstanding your failure to confirm them in writing.

5.3

Acting on Instructions: We may in our absolute discretion refuse to act on Instructions. If any
Instructions are incomplete, unclear, ambiguous, and/or in conflict with others we may in our absolute
discretion and without any liability on our part, act upon what we believe in good faith then to be or
refuse to act on them until a ny incompleteness, unclarity, ambiguity or conflict has been resolved toour satisfaction. Any Instruction shall be conclusively deemed to be a valid Instruction from you to us
if we believe it to be genuine. You are responsible for any loss, claim or expense incurred by us forfollowing or attempting to follow any Instructions.

5.4

Actions not requiring Instructions: You agree that we may without any further Instructions from you
carry out the following actions relating to the Custody Assets:(a) to collect and receive, for your account, any payments (whether income or capital) and distributions
in respect of the Custody Assets, and to take any action necessary and proper in connection with them,including (without limitation) the presentation of coupons and other interest items and theendorsement for collection of cheques, drafts and other negotiable instruments and the deduction orwithholding of any sum on account of any tax (i) required or which in our view is required to be so
deducted or withheld or (ii) for which it is or is in our view liable or accountable by law or practiceof any relevant revenue authority of any jurisdiction;(b) to execute in your name such ownership and other certificates as may be required to obtain payment
in respect of the Custody Assets; and(c) to exchange interim or temporary documents of title to Custody Assets for definitive ones.

6

SCOPE OF OUR RESPONSIBILITY

6.1

Dividends and other income: We shall as soon as reasonably practicable pay to you all dividends,
interest payments or other entitlements accruing to you in relation to the Custody Assets, subject todeductions and the exercise of any of our rights under these custody terms.

4

6.2

Corporate actions: Provided we receive the relevant information, we will use reasonable endeavours
to notify you of all matters in respect of which you have voting rights and of all calls for redemption,
grants or expirations of conversion rights, takeovers, grants or expirations of subscription rights,
mergers, offers, consolidations, reorganisations and capitalisations or such other corporate actions or
any other administrative or supervisory matters affecting the Custody Assets. Unless otherwise agreed
with you in writing, we will not take any action in relation to such matters except in accordance with
Instructions.

7

LIEN

7.1

General lien over Custody Assets: In addition to any general lien or other rights to which we may beentitled under any applicable law, we shall have a general lien over the Custody Assets until thesatisfaction of all liabilities and obligations (whether actual or contingent) owed by you to us (whether
under these custody terms or otherwise). The lien is a continuing security regardless of any intermediatepayment or settlement of account.

7.2

Realising Custody Assets: If you fail to pay any sum or liability you owe to us, we are entitled at any
time, without notice to you and without prejudice to any other right or remedy which we may have, tosell all or any of the Custody Assets in such manner and at such price as we may deem expedient
without being responsible for any loss and to apply the net proceeds thereof in or towards payment ordischarge of any sum or liability as we may think fit. The restrictions contained in Sections 93 and 103of the Law of Property Act 1925 shall not apply to these custody terms or to any exercise by us of ourpower of sale.

7.3

Further Assurance: You agree to execute such further documents and to take such further steps as we
may reasonably require to perfect our security interest over, be registered as owner of or obtain legal
title to Custody Assets, secure further liabilities and obligations (whether actual or contingent) owed
by you to us, enable us to exercise our rights.

8

SECURITIES LENDING AND OTHER USE OF CUSTODY ASSETS

8.1

Authority to lend: You agree that we may use your Custody Assets for the purposes of any Securities
Loan to us, an Affiliated Company, to another client of ours, or to a third party. Where we arrange a
Securities Loan in respect of your Custody Assets, title to the assets lent will be transferred to theborrower, and the assets returned to you will be equivalent but not identical to the assets lent.

8.2

Authority to use: You also agree that we may use your Custody Assets for other purposes, but in eachcase we shall do so on terms equivalent to a Securities Loan where we are the borrower.

8.3

Borrowers: Securities Loans shall be entered into with any of a list of borrowers selected by you. We
do not accept liability for the default of any borrower.

8.4

Terms and conditions: Securities Loans shall be documented on market standard documentation. You
authorise us to negotiate and execute such documentation on your behalf. We shall require that cash or
securities collateral is provided to us, for your benefit, in respect of each Securities Loan, including
where we ourselves act as borrower. You do not require us to provide collateral from our own resources
where the value of collateral provided to us falls below that of the lent Custody Assets, except where
we ourselves are borrower.

8.5

Measures to prevent unauthorised use: In order to prevent the unauthorised use of your Custody Assets
for our own account or the account of any other person: (a) we shall closely monitor all deliveries of
Custody Assets requiring settlement by us on your behalf, and promptly request delivery to us for your5

account of any securities where we are aware that delivery is due but not yet made; and (b) if under thisAgreement we are required to settle a delivery of Custody Assets on your behalf but on the relevant
settlement date there are, or we consider that there will be, insufficient Custody Assets available fordelivery, we shall, at your expense: (i) if it is reasonably practicable to do so, delay settlement until
sufficient Custody Assets are available for delivery; and/or (ii) arrange for a loan (by us or a third party)
to you of appropriate securities to enable such settlement to occur. Any loan of securities for t his
purpose shall be documented on market standard documentation, shall involve the transfer of collateralon your behalf to the lender, and you authorise us to negotiate and execute such documentation on yourbehalf.
8.6

Definition: "Securities Loan" means a loan or borrower of securities, and includes sale-and-repurchase(repo) transactions, a reverse repo, a buy/sell-back and a sell/buy back.

9

DVP EXEMPTION

9.1

DVP exemption: You agree that assets will not be treated as Custody Assets in respect of any delivery
versus payment transactions where we settle through (in our capacity as a direct member or participant
or where we are sponsored by such a direct member or participant) a system commercially available tofirms that are members or participants, a purpose of which is to facilitate the settlement of transactions
using assets held on one or more settlement accounts, if:(a) in respect of a purchase, we intend the asset in question to be due to you within one business day
following the fulfilment of your payment obligation to us; or(b) in respect of a sale, we intend the asset in question to be due to us within one business day following
the fulfilment of our payment obligation to you,(the “DVP exemption”),
provided that we will stop using the DVP exemption in respect of any particular Transaction if therelevant payment or delivery by us to you has not occurred by the close of business on the third business
day following the date on which we make use of the DVP exemption in respect of that Transaction.

6

AGENCY ANNEX
1

APPLICATION AND SCOPE

1.1

Scope of these terms: These terms set out the basis on which we will provide the services referred to in
the Agreement to you where you are acting as agent for each Counterparty. Where yo u are acting foryour own account the supplemental terms set out in this Annex shall not apply.

1.2

Notification: You will notify us before placing any order on behalf a Counterparty that you are acting
as agent for that Counterparty and inform us of the identity, address and any other details which we
require in respect of each Counterparty to enable us to form a credit and counterparty risk assessment
in respect of any Transaction.

1.3

Instructions: You may give us oral and written instructions and orders. We shall not accept nor act
upon any instructions received by anyone other than persons duly authorised by you ("Authorised
Persons"). Authorised Persons shall be those identified by you to us in writing from time to time. If werefuse to act on any instruction or order, we shall notify you as soon as practicable of our refusal.

1.4

Capacity: Each Transaction will be entered into by you as agent for and on behalf of the Counterparty
specified by you (whether by code name or otherwise) in accordance with term 1.5 b elow. Unless weagree otherwise in writing, we shall treat you alone as our customer and we shall not treat any
Counterparty as our customer for the purposes of the Rules of the Relevant Regulators.

1.5

Nature of Counterparties: You represent, warrant and undertake on your own behalf and as agent for
the Counterparties that no Counterparty will be a state or a separate entity within the meaning of theState Immunity Act 1978 and that a Counterparty shall, at the time an instruction is given in respect ofit, ha ve the characteristics and conform to any criteria agreed between us from time to time.

1.6

Counterparty accounts: We shall, in respect of each Counterparty, establish and maintain one or more
separate sub-accounts (each a "Counterparty Account"). You undertake, as agent or the relevantCounterparty and on your own behalf, in respect of each instruction given, to specify within two hours
of giving an instruction (or such other time as we may reasonably specify) the Counterparty Accountto which the relevant instruction relates. Until you specify a specific Counterparty Account you shallbe personally liable, as principal, in respect of the relevant Transaction. You further undertake, as agent
for each Counterparty and on your own behalf, to notify us immediately if any two or moreCounterparty Accounts relate to the same Counterparty.

1.7

Separate administration: We shall, subject to these terms, administer Counterparty Accounts which
we reasonably believe relate to different Counterparties separately, including for the purposes ofcalculating any margin requirement. We shall not exercise any power to consolidate accounts or set off
amounts owing between Counterparty Accounts relating to different Counterparties.

1.8

Documentation: You agree to forward to a Counterparty a ny documentation in relation to such
Counterparty that we are required to provide under the Rules of the Relevant Regulators and which we
make ava ilable to you for that purpose.

2

ADVICE

2.1

Limitations: You, as agent for the Counterparties and on your own behalf, retain full responsibility formaking all investment decisions with respect to any Counterparty. We will not be responsible for
judging the merits or suitability of any Transaction to be entered into on behalf of a Counterparty.
Unless otherwise required under Applicable Regulations, we shall have no responsibility for your or7

any Counterparty's compliance with any laws or rules governing or affecting your conduct or that of
any Counterparty, or for your or any Counterparty's compliance with any laws or rules governing or
affecting Transactions.
3

REPRESENTATIONS, WARRANTIES AND COVENANTS

3.1

The Agreement: Clause 11 of the Terms of Business shall not apply to you.

3.2

Representations and warranties: As agent for each Counterparty and on your own behalf, you represent
and warrant to us as of the date these terms come into effect and as of the date of each Transaction that:(a) you and the Counterparty each have all necessary authority, powers, consents, licences andauthorisations and have taken all necessary action to enable you lawfully to enter into and perform theseterms, the Agreement and each Transaction and to grant the security interests and powers referred to in
the margin arrangements annex and elsewhere in these terms and the Agreement;(b) the person(s) entering into these terms, the Agreement and each Transaction have been duly
authorised to do so;(c) these terms, the Agreement, each Transaction and the obligations created under each of them arebinding upon, and are enforceable against, you and/or the Counterparty (as applicable) in accordancewith their terms (subject to applicable principles of equity) and do not and will not violate the terms of
any regulation, order, charge or agreement by which you or the Counterparty is bound;(d) no Event of Default or Potential Event of Default has occurred and is continuing with respect to youor the Counterparty;(e) each of you and the Counterparty is permitted under its constitution and any applicable law or
regulation and is financially able to sustain any loss which may result from Transactions, and thatentering into Transactions is a suitable investment vehicle for the Counterparty;(f) the relevant Counterparty owns, with full title guarantee, all investments, margin (or collateral)deposited with, transferred to us or charged in our favour, by you acting as agent for the Counterparty
and such investments, margin (or collateral) are free from any prior mortgage, charge, lien or otherencumbrance whatsoever and neither you acting as agent for the relevant Counterparty, nor theCounterparty itself, will further pledge or charge such investments, margin (or collateral) or grant any
lien over them while it is pledged or charged to us except with our prior written consent; and(g) any information which you provide or have provided to us in respect of your or the Counterparty's
financial position, domicile, or other matters is accurate and not misleading in any material respect.

3.3

Covenants: You, as agent for each Counterparty and on your own behalf, covenant to us that you will:(a) ensure at all times that you and the Counterparty obtain and comply with the terms of and do all thatis necessary to maintain in full force and effect all authority, powers, consents, licences andauthorisations referred to above;(b) promptly notify us of the occurrence of any Event of Default or Potential Event of Default withrespect to yourself or the Counterparty;8

(c) provide to us on request such information regarding your and the Counterparty's financial or
business affairs as we may reasonably require to evidence the authority, powers, consents, licenses andauthorisations referred to above or to comply with any Applicable Regulations;(d) provide to us on request copies of the relevant sections of the Counterparty's constitutive documents
relating to its capacity to enter into Transactions and appoint an agent to act on its behalf and that any
such extract will, to the best of your knowledge, be true and accurate in all material respects and you
will not omit or withhold any information which would render the information so supplied to be false
or inaccurate in any material respect;(e) either: (i) execute as agent for the Counterparty where you are duly authorised to do so, or, in eachother case: (ii) procure that the Counterparty executes, as applicable, on our request all such transfers,
powers of attorney and other documents as we may require to vest any assets or otherwise grant any
security interest or other interest referred to in the Agreement in us, our nom inee, a purchaser ortransferee; and(f) immediately notify us if you cease to act for any Counterparty or if the basis upon which you act onbehalf of the counterparty alters to an extent which would affect this Agreement or any Transaction
made thereunder; and immediately notify us in writing if at any time any of the warranties,
representations or undertakings in this annex are or become or are found to be incorrect or misleadingin any material respect.
4

ANTI- MONEY LAUNDERING

4.1

Anti-money laundering: You represent, wa rrant and undertake that you are now and will be at allmaterial times in the future in compliance with all Applicable Regulations concerning moneylaundering. We are required to follow the Applicable Regulations concerning money-laundering
relating to the identification of the Counterparty unless clause 4.2 applies, and if satisfactory evidenceof identity has not been obtained by us within a reasonable time period, we reserve the right to cease todeal with you.

4.2

If you are: a UK or EU regulated credit or financial institution, or a regulated financial sector firm froma FATF country (i.e. a member of the Financial Action Task Force), we shall deal with you on theunderstanding that you are complying with EU regulations (or the local equivalent) concerning moneylaundering and that evidence of the identification of any Counterparty will have been obtained andrecorded under procedures maintained by you.

5

MARGINING ARRANGEMENTS AND DISCHARGE

5.1

Margin: References to "you" in the Agreement shall all be deemed to be references to you acting as
agent on behalf of each Counterparty in respect of which you provide margin to us from time to time.

5.2

Discharge: Where under any term any payment or other performance (including the delivery of
securities or any other property) is due from us, it shall be a discharge of our obligation to make suchpayment or performance to you notwithstanding that any Counterparty shall be interested (whether
beneficially or otherwise) in such payment or performance.

6

NETTING

6.1

Events of Default: References to "Party" in the Agreement shall be deemed to be references to you
acting on your own behalf and to each Counterparty. If any Event of Default occurs in respect of you
or a Counterparty we shall be entitled to exercise our rights under the Agreement in accordance with9

the following sentences of this term and the expression "Defaulting Party" shall be construed
accordingly. In respect of an Event of Default which occurs in respect of you (as opposed to any
Counterparty), our rights under the Agreement shall apply separately in respect of each Counterparty
Account. If an Event of Default occurs in respect of a Counterparty, our rights under the Agreement
shall be limited to the relevant Counterparty Account(s).
7

INDEMNITY

7.1

Indemnification: Notwithstanding that you may act as agent you undertake as principal to indemnify
us in respect of any liabilities, costs, damages and losses incurred in relation to any Transaction effectedby you as agent on behalf of any Counterparty.

8

INTERPRETATION
Definitions: In this Annex, the following terms have the following meanings:"Counterparty" means any counterparty agreed to in writing by us from time to time on behalf of which
you are to enter as agent into Transactions with us; and where a counterparty does not constitute a single
legal person, means the trustees, individuals or other persons who are the primary representatives of theorganisation, trust or fund on whose behalf they are dealing.

10

MARGINING ARRANGEMENTS ANNEX

1.

Application: The provisions of this Annex are subject to any specific terms agreed separately between
us relating to margin payments contemplated by this Agreement.

2.

Margin call: You agree to pay us on demand such sums by way of margin as are required from time totime under the Rules of any relevant Exchange or Market (if applicable) or as we may in our discretion
reasonably require for the purpose of protecting ourselves against loss or risk of loss on present, future
or contemplated Transactions under this Agreement.

3.

Form of margin: Unless otherwise agreed, margin must be paid in cash. The currency of the cash
margin you pay to us shall be specified in the Individually Agreed Terms Schedule. Cash margin is
paid to us as an outright transfer of title and you will not retain any interest in it. Cash margin received
by us will be recorded by us as a cash repayment obligation owed by us to you.

4.

Non-cash margin: Where we agree to accept non-cash collateral, it must be in a form acceptable to us
as specified in the Individually Agreed Terms Schedule. The value of the non-cash collateral and the
proportion of that value to be taken into account for margin purposes shall be determined by us in ourabsolute discretion and specified in the Individually Agreed Terms Schedule.

5.

Right of retention: If there is an Event of Default or this Agreement terminates, we will not be obliged
to repay any cash margin for so long as it is required under the Rules of any relevant Exchange orMarket or to the extent that you owe, or may owe, obligations to us. In determining the amounts ofcash margin, your obligations, and our obligation to you, we may apply such methodology (including
judgements as to the future movement of markets and values) as we consider appropriate, consistent
with Applicable Regulations.

6.

Set-off on default: If there is an Event of Default or this Agreement terminates, we may set off thebalance of cash margin owed by us to you against your obligations (as reasonably valued by us) as they
become due and payable to us and we shall be obliged to pay to you (or entitled to claim from you, asappropriate) only the new balance after all obligations have been taken into account. The net balance,
if any, shall take into account the Liquidation Amount payable under the netting provisions in clause
12 of this Agreement ("Events of Default, Termination of Agreement, and Netting").

7.

Transfer of non-cash collateral: This paragraph 7 and paragraphs 8 to 11 shall not apply if we havesent you a notification contemplated under paragraph 12. You agree that all right, title and interest inand to any non-cash collateral shall vest in us free and clear of any liens, claims, charges orencumbrances or any other interest of you or of any third party. Neither this paragraph, nor paragraphs
8 or 9 create a security interest in the non-cash collateral.

8.

Use of non-cash collateral: On the basis that we are the owner of the non-cash collateral as set out inparagraph 7 above, you agree and acknowledge that until such time as the conditions in paragraph 9
are met, we shall have full right, title and interest in the non-cash collateral including, without
limitation, the right to use at any time and from time to time, the non-cash collateral in the conduct of
our own business, including, in particular but without limitation, the right to:(a)sell, pledge, rehypothecate, assign, invest, use, commingle, or otherwise dispose of, or otherwise
use in our business any non-cash collateral, free from any claim or right of any nature whatsoeverof yours;

11

(b)

register any non-cash collateral in our name or in the name of our custodian or nominee (which
may be one of our affiliates);(c)

combine any of the non-cash collateral with our other property or that of any of our customers
or both, as the case may be from time to time so long as a record is kept of the non-cash collateral
which has been so combined;(d)pledge any of the non-cash collateral as security for our indebtedness to any other person or
persons;(e)loan any of the non-cash collateral in the form of securities to ourselves or any of our affiliates
for use by us or them for our/their own business purposes on the basis that such loan would
constitute a securities lending arrangement and would be effected in a manner which is consistent
with such an arrangement in the relevant market for similar securities to the non-cash collateral;(f)use any of the non-cash collateral for making delivery against a sale, whether a short sale orotherwise.

9.

Obligation to transfer equivalent collateral: You shall be entitled to have equivalent non-cash
collateral transferred to you or at your direction in accordance with this paragraph 9 and paragraphs 10
and 11 if (1) you have discharged in full the Secured Obligations relating to any such non -cash
collateral or to which such non-cash collateral relates, and (2) have requested that any equivalent noncash collateral be transferred by us for any reason. Upon meeting these two conditions you shall beentitled to have all right, title and interest in the non-cash collateral transferred to you or to a third party
on your behalf.

10.

Transfer of securities collateral: Where the non-cash collateral comprises securities, we may fulfil our
obligation under paragraph 9 to transfer such non-cash collateral by delivering Fungible Securities, it
being understood and agreed that the Fungible Securities may not be and do not need to be identicalinvestments to the original securities and need only meet the definition of Fungible Securities set out
in paragraph 24.

11.

Transfer of Commodity Securities: Where the non-cash collateral comprises Commodity Securities("Commodity Securities Collateral"), we may fulfil our obligation under paragraph 9 to transfer suchnon-cash collateral by delivering Equivalent Collateral having a Value as of the date of the transfer
equal to that of the Commodity Securities Collateral. Where, on the date of a transfer of EquivalentCollateral, the Value of a Commodity Security transferred by us as Equivalent Collateral is greater thanthe mean per lot Value (as calculated by us at the date of transfer of Equivalent Collateral) of theCommodity Securities Collateral provided to us (the "Mean Value"), we shall on that day pay to you
the difference in Value; where the Value of a Commodity Security so transferred is less than the Mean
Value, you shall on that day pay to us the difference in Value; and all such differences shall beaggregated so that only the balance is payable by the party with the greater net payment obligation
under this paragraph.

12.

Security interest: We may notify you in writing (either in the Individually Agreed Terms Schedule orotherwise) at any time that paragraphs 7 to 11 above are not applicable and that the provisions of thisparagraph 12 shall apply in their place. If we give you such notification, as a continuing security forthe performance of the Secured Obligations under or pursuant to this Agreement, you grant to us, withfull title guarantee, a first fixed security interest in all non-cash margin now or in the future provided
by you to us or to our order or under our direction or control or that of an Exchange or Market or12otherwise standing to the credit of your account under this Agreement or otherwise held by us or our
Associates or our nominees on your behalf.
13.

Commodity Securities represented by Warrants: The transfer of any Commodity Security represented
by a Warrant held within SWORD under the provisions of this Annex shall be effected by delivery to
the recipient's account within SWORD or to that of the recipient's duly appointed bailee being an
Account Holder within the meaning of SWORD Regulations; and in any other case, physical deliveryof the Warrant representing the Commodity Security to the recipient or to its order.

14.

Further assurance: You agree to execute such further documents and to take such further steps as we
may reasonably require to perfect our security interest over, be registered as owner of or obtain legal
title to the margin, secure further the Secured Obligations, enable us to exercise our rights or to satisfy
any market requirement.

15.

Power to charge: You agree that we may, to the extent that any of the margin constitutes "financial
collateral" and this Agreement and your obligations hereunder constitute a "security financial collateralarrangement" (in each case as defined in, and for the purposes of, the Financial Collateral Arrangements(No. 2) Regulations 2003 (SI 2003 No. 3226) (the "Regulations"), free of any adverse interest of yours
or any other person, grant a security interest over margin provided by you to cover any of ourobligations to an intermediate broker, Exchange or Market, including obligations owed by virtue of thepositions held by us or other of our clients.

16.

Power of sale: If an Event of Default occurs, we may exercise the power to sell all or any part of themargin. The restrictions contained in Sections 93 and 103 of the Law of Property Act 1925 shall not
apply to this Agreement or to any exercise by us of our rights to consolidate mortgages or our powerof sale. We shall be entitled to apply the proceeds of sale or other disposal in paying the costs of such
sale or other disposal and in or towards satisfaction of the Secured Obligations.

17.

Power of appropriation: To the extent that any of the margin constitutes "financial collateral" and thisAgreement and your obligations hereunder constitute a "security financial collateral arrangement"
under the Regulations, we shall have the right to appropriate all or any part of such financial collateralin or towards discharge of the Secured Obligations. For this purpose, you agree that the value of suchfinancial collateral so appropriated shall be the amount of the margin, together with any accrued but
unposted interest, at the time the right of appropriation is exercised. The parties further agree that themethod of valuation provided for in this Agreement shall constitute a commercially reasonable methodof valuation for the purposes of the Regulations.

18.

Substitution: You may on any Business Day by notice inform us that you wish to transfer to us noncash collateral specified in that notice ("New Collateral") in exchange for certain non-cash collateralspecified in that notice and which has either been transferred to us under paragraph 7 or over which
you have granted us a security interest under paragraph 12 ("Original Collateral"). If we notify you that
we consent to the proposed exchange, such consent not to be unreasonably withheld, (a) you will beobliged to transfer the New Collateral to us on the second Settlement Day following the date on which
you receive notice (which may be by telephone) from us of our consent and (b) we will be obliged totransfer to you the Original Collateral (or Fungible Securities where the Original Collateral comprises
securities or Equivalent Collateral where the Original Collateral comprises Commodity Securities
Collateral) not later than the Settlement Day following the date on which we receive the New Collateral,provided that we will only be obliged to transfer equivalent collateral with a value as of the date oftransfer as close as practicable to, but in any event not more than, the value of the New Collateral as ofthat date.

13

19.

Distributions: We shall transfer to you no later than the Settlement Day following each Distribution
Date cash, securities or other property of the same type, nominal value, descriptio n and amount as therelevant Distributions received by us or such amount after any additional deductions required by any
applicable law.

20.

Negative pledge: You undertake neither to create nor to have outstanding any security interest
whatsoever over, nor to agree to assign or transfer, any of the cash or non-cash margin transferred tous, except a lien routinely imposed on all securities in a clearing system in which such securities may
be held.

21.

General lien: In addition and without prejudice to any rights to which we may be entitled under thisAgreement or any Applicable Regulations, we shall have a general lien on all property held by us on
your behalf, whether directly or indirectly through our Associates, nominees or other Third Parties,
until the satisfaction of the Secured Obligations.

22.

Effect of title transfer collateral arrangements: Where you provide cash margin to us under a title
transfer collateral arrangement (such as the arrangement pursuant to paragraph 3):(a) you will not have a proprietary claim over such cash margin (even where we act as your agent) andwill have an unsecured contractual claim against us for repayment of an equivalent amount subject
to the terms of the relevant agreement;(b) such cash margin will not be held by us as banker or in accordance with the Client Money Rules(and among other things, will not be segregated from our assets or held subject to a trust);(c) in the event of our insolvency, you will have an unsecured claim against us in respect of such cash
margin and, you may not recover the full value thereof if there is insufficient cash to satisfy yourclaims and those of all other clients with claims against the relevant cash; and(d) you will not be entitled to receive any interest that may have otherwise been payable in respect ofsuch cash (subject to any contractual rights that you may have otherwise agreed with us to thecontrary).
This information set out in paragraph 22 is provided for your information only, as required by
Applicable Regulation, and is not intended to constitute a contractually binding part of thisAgreement, not intended to be relied upon as legal, tax or other advice.

23.

Taxes and tax forms: You shall at all times be fully responsible for the payment of any taxes arisingfrom this Annex, including but not limited to any stamp, registration, documentation or similar taxes
levied or imposed or any other deduction or withholding taxes or any additional amounts required byany applicable law. Upon reasonable demand, you will deliver any form or document that may berequired or reasonably requested in writing in order to make any payment under this Annex without
any deduction for or on account of any tax or with such deduction or withholding at a reduced rate.

24.

Dispute resolution

24.1

Disputed valuation: If you reasonably dispute any Value calculated under this Annex, then:a.

you will notify us not later than the close of business on the Business Day following the dateon which the disputed calculation was received by you;b.

the parties will consult with each other in an attempt to resolve the dispute expeditiously;
and

14

c.

if they fail to resolve the dispute by the end of the Business Day following the Business Day
mentioned in a. then we will re-calculate the Value of any Commodity Security Collateral or
Equivalent Collateral as of the date of the transfer of the relevant collateral.

24.2

Re-notification: The appropriate party will upon demand following notification by us of any
recalculations under this paragraph make the appropriate transfer.

24.3

Recalculation fee: We may charge you a fee for recalculations carried out under this paragraph.

24.4

No Event of Default: The failure by a party to make a transfer of any amount which is the subject of
a dispute to which this paragraph applies will not constitute an Event of Default so long as theprocedures set out in this paragraph are being carried out.

25.

Definitions:"Commodity Security" means at any time one unit of commodity, being the minimum amount tradable
under Exchange Rules, which (alone or together with other Commodity Securities):(i)is the subject of a Warrant;(ii)
is of tenderable quality under Exchange Rules and for which (where applicable) a
current grading certificate exists; and(iii)
is free from encumbrances.
"Distributions" means, with respect to any non-cash collateral consisting of securities, all principal,
interest and other payments a nd distributions of cash or other property to which a holder of securitiesof the same type, nominal value, description and amount would be entitled from time to time.
"Distribution Date" means, with respect to any non-cash collateral consisting of securities, each dateon which a holder of such securities is entitled to receive Distributions or, if that date is not a local
Business Day, the next following local Business Day.
"Equivalent Collateral" means Commodity Securities of the same type, description and amount (subject
to variations in quality and weight as is permitted under Exchange Rules) as the non-cash collateralcomprising Commodities Securities transferred to us under paragraph 7 or over which you have granted
us a security interest under paragraph 12.
"Exchange Rules" means, in relation to any commodity, rules of the Exchange applicable to contracts
for the sale and purchase of that commodity;"Fungible Securities" means securities of equivalent value (in the aggregate) (i) of which any unit is,by nature or usage of trade, the equivalent of any other like unit of securities, or (ii) of the kind which
would qualify as margin pursuant to this Agreement.
"Individually Agreed Terms Schedule" means any specific terms agreed separately between us andevidenced in writing which shall be treated as being additional provisions of this Agreement.
"Obligations" means obligations present or future, actual or contingent or prospective, owing or which
may become owing by you to us under any Transaction or designated by us for these purposes inwriting.
"Secured Obligations" means all Obligations owed by you to us after the application of any rights of
set-off arising under this Agreement or by operation of law.

15

"Settlement Day" means, in relation to a date, (i) with respect to a transfer of cash or other property(other than securities) the next local Business Day and (ii) with respect to a transfer of securities, thefirst local Business Day after such date on which settlement of a trade in the relevant securit ies, if
effected on such date, would have been settled in accordance with customary practice when settling
through the clearance system agreed between the parties for delivery of such securities or, otherwise,on the market in which such securities are principally traded (or, in either case, if there is no customary
practice, on the first local Business Day after such date on which it is reasonably practicable to deliver
such securities).
"SWORD" means the system by that name for electronic transfer of entitlement to LME Warrants.
"Value" means, in respect to Equivalent Collateral, for any date for which Value is calculated, anamount expressed in our Base Currency and reasonably determined by us by reference where
reasonably practicable to independent price sources, as reflecting the value of such EquivalentCollateral.
"Warrant" means a warehouse warrant issued in circumstances regulated by an Exchange whichevidences entitlement to a commodity, and "LME Warrant" means such a Warrant where the Exchange
is the London Metal Exchange.

16

EQUITIES SECURITIES ANNEX
1

SCOPE

1.1

Transactions: The clauses in this Annex apply to Transactions in Equity Securities. For these purposes,"Transaction" means a transaction relating to an Equity Security under which delivery of an Equity
Security is contemplated upon its formation falling within paragraphs (i) to (iv) of the definition of"Transaction" in the Interpretation Annex of the Terms of Business.

2

DEALING AS PRINCIPAL

2.1

Execution and capacity: Unless we agree otherwise in which case Clause 3 shall apply, every orderwhich we may take is accepted and executed on the basis that we act on our own account as principal
and not as agent for you.

3

DEALING AS AGENT

3.1

Application: This clause 3 shall apply only where we have expressly agreed to act as your agent, inwhich case clause 2 above shall not apply.

3.2

Execution and capacity: We may in certain circumstances agree to act as your agent in relation to a
Transaction in Equity Securities. In such circumstances orders will, subject to Applicable Regulations,be executed by us as your Agent.

3.3

Settlement of agency trades:(a) Where we act as your agent, we accept no responsibility to you for settlement of your obligations in
respect of Transactions in Equity Securities. You will notify us of your clearing agent or other person
who will procure settlement of your Transaction in Equity Securities. The provisions of Clause 14 ofthis Agreement shall apply in respect of any liability of ours where, notwithstanding this clause, under
Applicable Regulations we assume a responsibility to any other person for performance of yourTransactions.
(b) Delivery or payment (as the case may be) by the other party to the Transaction shall be entirely at
your own risk and our obligations to pay or deliver investments to you or to your order on account of aTransaction shall be conditional upon receipt by us of Equity Securities or sale proceeds (as the casemay be) from the other party or parties to the Transaction.
(c) Any cash received by us in respect of a Transaction shall be a debt owed by us to you until paid by
us to you or otherwise discharged, and we shall owe you no fiduciary duty in relation thereto.

4

TRADING PROCEDURES

4.1

Our quotes: You acknowledge that any prices displayed by us are, or may be, indicative only.
Therefore in certain market conditions the market price may have moved between the sen ding and theactual execution of a Transaction. Such movement may be in your favour or against you.

4.2

Cut-off times: We may establish cut-off times for instructions which may be earlier than the times
established by the particular Exchange and/or any clearing house involved in any Transaction, and you
shall have no claims against us arising out of the fact that an order was not placed by you ahead of our
cut-off time.

17

4.3

Corporate Actions: Where an order is given to us in respect of any Equity Security for which a
Corporate Action is imminent we may decline to accept your instructions.

4.4

Our duty in respect of Corporate Actions: If, where, in respect of any Equity Securities held by us foryour account or deliverable to us for your account, any Corporate Actions occur, we shall not be obliged
to undertake any action, even if you specifically instruct us, unless we expressly consent in writing.

5

OFF-EXCHANGE AND GREY MARKET INVESTMENTS

5.1

Off Exchange Transactions: If we sell you any securities which are not quoted on an investment
exchange recognised or designated by the Relevant Regulators or an EEA Exchange, then, unless we
specify a longer period, we shall, to the extent required by law, ensure the availability to you of areasonable repurchase price for such securities for three months after the original sale to you. You may
find it difficult to sell such securities after the end of such period due to their nature and possible
illiquidity.

5.2

Suspended and grey market investments, etc: We may enter into Transactions for or with you in:(a) an investment whose listing on an Exchange is suspended, or the listing of or dealings in which havebeen discontinued, or which is subject to an Exchange announcement suspending or prohibiting
dealings; or(b) a grey market investment, which is an investment for which application has been made for listingor admission to dealings on an Exchange where the investment's listing or admission has not yet takenplace (otherwise than because the application has been rejected) and the investment is not already listed
or admitted to dealings on another investment exchange.

5.3

Transparency: It is possible that there may be insufficient published information on which to base adecision to buy or sell such Equity Securities as referred to in the two preceding clauses.

6

SHORT-SELLING

6.1

Sales presumed not to be Short Sales: Unless your instructions specify to the contrary, all sale
instructions are accepted by us on the understanding that you own the Equity Securities sold. We shallnot accept any instruction for a Short Sale Transaction if no satisfactory arrangements for making
available the relevant Equity Securities for delivery have been agreed with us (which may include yourentering into a securities lending arrangement with us or a third party or your agreement to our doing
so on your behalf).

6.2

Short Sale Instructions: Upon our acceptance of a Short Sale instruction, we shall record the position
as if you had sold the Equity Securities to us as principal. We shall in respect of any Short Sale
Transaction effect delivery of the Equity Securities on or before the settlement date. To do so we may
borrow Equity Securities from a third party or lend them to you ourselves. Unless you advise us thatyou have arranged for us to borrow the Equity Securities from a particular lender (in which case weshall, subject to whatever conditions have been previously agreed between us and you, seek to confirm
such arrangements), we shall have absolute discretion in the selection of lenders.

6.3

Rolled Transactions: Where Equity Securities have been borrowed by you or on your behalf to coversettlement obligations, each Short Sale will be closed out upon notice, by you or us, of not less than thestandard settlement period for the relevant Market or clearing organisation. When a Short Sale is closed
out, you shall deliver or procure delivery of the relevant Equity Securities in accordance with ourdirections. Notice shall be deemed to have been given by you under this sub-clause, specifying delivery

18

after expiry of such standard settlement period, if an Event of Default occurs or this Agreement isterminated.
6.4

Income: If we are required to pay income in respect of any Equity Securities subject to a Short Sale toany person from which such Equity Securities have been borrowed on your behalf, we shall debit a sumof money from your account equivalent to the amount necessary to enable us to make an equivalent
payment to such person in relation to the applicable loan of the Equity Securities together with such
expenses or fees as may apply.

7

LIMIT ORDERS

7.1

Sufficient Funds: If you instruct us in respect of a Limit Order for the purchase of any Equity
Securities, you will ensure that there are sufficient funds in your account to meet that Limit Order. We
will not restrict you from subsequently entering further instructions which may result in insufficient
funds for a Limit Order to be executed.

7.2

Our role as principal: Any Limit Order in respect of an Equity Security in which we act as marketmaker or otherwise as principal will be given by you on the understanding that:(a) the order will not be executed unless and until we bid for the Equity Security at the same or a higher
price than that specified in the order (in the case of a sell order) or offer it at the same or a lower pricethan that specified in the order (in the case of a buy order) with a view to purchasing or selling (as thecase may be) the Equity Security concerned in the amount of the order; and(b) until execution, you may buy the Equity Security (where the order you gave was to buy) at a priceequal to or lower than stated in the order, or sell it (where the order was to sell) at a price equal to or
higher than that stated in the order. Any such purchase or sale may be from or to any third party andfor our own account or for that of any Affiliated Company.

7.3

Cancellation: If you wish to cancel a Limit Order before its execution or expiry, subject to Applicable
Regulations the order remains valid until you receive a confirmation of cancellation of that order from
us.

7.4

Partial fills: No partial fill of a Limit Order will be executed. We accept no responsibility if the order
is not filled.

7.5

Publication: Unless you expressly instruct us to the contrary, we shall not immediately make public
any Limit Order in respect of shares admitted to trading on a regulated market or traded on a Trading
Venue which is not immediately executed under prevailing market conditions.

8

SETTLEMENT AND OWNERSHIP

8.1

Purchases: You shall pay for any Equity Securities purchased for you on or before the settlement date.
If, by the time due for settlement of a Transaction (as determined by us), there is insufficient cash inyour account to enable us to meet the settlement obligations, we shall not be obliged to settle theTransaction. Where there is insufficient cash in your account and we do proceed to settlement, we may
accept delivery of the Equity Securities, charge your account for the payment to satisfy your ob ligation,sell the Equity Securities at a price we believe to be reasonable, and credit your account with the net
proceeds thereof (after deduction of commission and other costs).

8.2

Trust: If in any Transaction we deliver securities or pay money to you or to your order when you are
obliged to pay money or transfer securities to us at that time or subsequently and your obligations are19not performed simultaneously with or prior to our obligations, then you shall hold on trust for us any
securities or money received from us until your own obligations to us are fully performed.
8.3

Sales: You shall make Equity Securities sold by you available for settlement on or before the settlement
date. If, by the time due for settlement of a Transaction (as determined by us), th ere are insufficient
Equity Securities held for your account, we shall not be obliged to settle the Transaction. Where there
are insufficient Equity Securities in your account and we do proceed to settlement, we may buy the
Equity Securities required for delivery at a price we believe to be reasonable, charge your account forthe cost thereof, deliver the Equity Securities to satisfy the delivery obligation, and credit your accountwith the net proceeds thereof (after deduction of commission and other cost s).

8.4

Title: If in any Transaction we deliver Equity Securities or pay money on your behalf, but yourobligations in respect of that Transaction are not performed simultaneously with or prior to our own
delivery or payment, then we shall not be obliged to credit your account with any Equity Securities ormoney received by us from any third party until your own obligations to us are fully performed; andany such Equity Securities or money received by us shall be our property not yours.

8.5

Finality: We shall owe no payment or delivery obligation and shall not be deemed to hold any property
belonging to you as a result of settlement of a Transaction until we have received, with finality, thecash or Equity Securities to which you are entitled.

8.6

Contractual Settlement: We may, in our discretion, provisionally credit and debit your account on thedue date of settlement as if the Transaction had settled on that date even where, under Applicable
Regulations, the Transaction has not settled in your favour or our favour with finality. We may,
however, in our absolute discretion reverse any such provisional debits and credits at any time until we
receive payment (on sale) or delivery (on purchase) on your behalf with finality. We shall not be liable
to you in respect of income or any other rights relating to the Equity Securities which would haveaccrued on the monies or investments if settlement had taken place on the contractual settlement date.

8.7

CREST: Where you instruct us to effect settlement by accepting the transfer of Equity Securities toour nominated CREST account you accept that payment obligations upon settlement will be dealt withthrough a settlement bank and that the creation of a settlement bank payment obligation will to theextent of such obligation discharge payment due from us.

8.8

Non-DvP Markets: In some securities markets, delivery of Equity Securities and payment may not bemade simultaneously. In such markets we may make payment or delivery of Equity Securities at suchtime and in such manner as is in accordance with relevant local law and practice or with the customs
prevailing in the relevant market. You shall bear the risk that the counterparty to the Transaction may
not pay or perform on time or at all.

8.9

Aggregation for settlement: Settlements in respect of executed Transactions may, in our discretion, be
netted to the lowest number of movements for each type of Equity Security reasonably possible, subject
to Applicable Regulations.

9

STABILISATION

9.1

Stabilisation Activity: We may effect Transactions in Equity Securities that may be the subject ofstabilisation, a price supporting process that may take place in the context of new issues. The effect ofstabilisation can be to make the market price of the new issue temporarily higher than it would otherwise
be. We shall owe you no duties in respect of legitimate stabilisation activities which we undertake.

20

10

DEFINITIONSDefinitions: In this Annex, the following terms have the following meanings:"Account" means an external or internal facility by which securities and cash may be credited, debitedor transferred.
"Corporate Action" means any step taken by an issuer of Equity Securities with reference to holders of
its Equity Securities, and includes: capital reorganisation; capitalisation; change in listing; consolidation;
conversion; delisting; de-merger; alteration in ranking; redemption; rights issue; scheme of arrangement;
takeover; or any equivalent or analogous step under the law of any relevant jurisdiction.
"Limit Order" means an order to buy or sell an Equity Security at its specified price limit or better andfor a specified size.
"Short Sale" means a Transaction for the sale of equities not owned by you at the time scheduled forsettlement of the Sale Transaction.

21

FIXED INCOME SECURITIES ANNEX
1

SCOPE

1.1

Transactions: The clauses in this Annex apply to Transactions in Fixed Income Securities. For these
purposes, "Transaction" means a transaction relating to a Fixed Income Security under which delivery
of a Fixed Income Security is contempla ted upon its formation.

2

DEALING AS PRINCIPAL

2.1

Execution and capacity: Every order which we may take is accepted and executed on the basis that
we act on our own account as principal and not as agent for you.

3

TRADING ARRANGEMENTS

3.1

Bond market liquidity: You acknowledge that fixed income instruments may be illiquid and that themarket price of any particular instrument may be difficult to ascertain. In accordance with our Best
Execution Policy you accept that price may not be the primary factor in determining whether best
execution has been achieved for orders we execute on your behalf.

3.2

ICMA Rules and Recommendations: All Transactions in "international securities" as that term isdefined in the Rules and Recommendations of the International Capital Market Association and unlessagreed otherwise at the time of trade in non-US debt or convertible instruments shall be subject to such
Rules and Recommendations, which are included within the meaning of "Applicable Regulations" forthe purposes of this Annex.

4

SETTLEMENT AND OWNERSHIP

4.1

CREST: Where you instruct us to effect settlement by accepting the transfer of investments to ournominated CREST account you accept that payment obligations upon settlement will be dealt withthrough a settlement bank and that the creation of a settlement bank payment obligation will to theextent of such obligation discharge payment due from us or any company which is a member of our
group

4.2

Purchases: You shall pay for any Fixed Income Securities purchased for you on or before the settlement
date. If, by the time due for settlement of a Transaction (as determined by us), there is insufficient cash
in your account to enable us to meet the settlement obligations, we shall not be obliged to settle theTransaction. Where there is insufficient cash in your account and we do proceed to settlement, we may
accept delivery of the Fixed Income Securities, charge your account for the payment to satisfy yourobligation, sell the Fixed Income Securities at a price we believe to be reasonable, and credit youraccount with the net proceeds thereof (after deduction of commission and other costs).

4.3

Trust: If in any Transaction we deliver securities or pay money to you or to your order when you are
obliged to pay money or transfer securities to us at that time or subsequently and your obligations are
not performed simultaneously with or prior to our obligations, then you shall hold on t rust for us any
securities or money received from us until your own obligations to us are fully performed.

4.4

Sales: You shall make Fixed Income Securities sold by you available for settlement on or before thesettlement date. If, by the time due for settlement of a Transaction (as determined by us), there areinsufficient Fixed Income Securities held for your account, we shall not be obliged to settle theTransaction. Where there are insufficient Fixed Income Securities in your account and we do proceed
to settlement, we may buy the Fixed Income Securities required for delivery at a price we believe to bereasonable, charge your account for the cost thereof, deliver the Fixed Income Securities to satisfy the22delivery obligation, and credit your account with the net proceeds thereof (after deduction ofcommission and other costs).
4.5

Title: If in any Transaction we deliver Fixed Income Securities or pay money on your behalf, but yourobligations in respect of that Transaction are not performed simultaneously with or prior to our own
delivery or payment, then we shall not be obliged to credit your account with any Fixed Income
Securities or money received by us from any third party until your own obligations to us are fully
performed; and any such Fixed Income Securities or money received by us shall be our property not
yours.

4.6

Finality: We shall owe no payment or delivery obligation and shall not be deemed to hold any property
belonging to you as a result of settlement of a Transaction until we have received, with finality, thecash or Fixed Income Securities to which you are entitled.

4.7

Non-DvP Markets: In some securities markets, delivery of Fixed Income Securities and payment may
not be made simultaneously. In such markets we may make payment or delivery of Fixed Income
Securities at such time and in such manner as is in accordance with relevant local law and practice orwith the customs prevailing in the relevant market. You shall bear the risk that the counterparty to theTransaction may not pay or perform on time or at all.

5

OFF-EXCHANGE AND GREY MARKET INVESTMENTS

5.1

Suspended and grey market investments, etc: We may enter into Transactions for or with you in:(a) an investment whose listing on an Exchange is suspended, or the listing of or dealings in which havebeen discontinued, or which is subject to an Exchange announcement suspending or prohibiting
dealings; or(b) a grey market investment, which is an investment for which application has been made for listingor admission to dealings on an Exchange where the investment's listing or admission has not yet takenplace (otherwise than because the application has been rejected) and the investment is not already listed
or admitted to dealings on another investment exchange.

5.2

Restrictions: It is possible that there may be insufficient published information on which to base adecision to buy or sell such investments as are referred to in the two preceding clauses.

6

DEFINITIONSDefinition: In this Annex securities terms, "securities" means investments within articles 76 to 80 of the
Financial Services and Markets Act 2000 (regulated activities) order 2001.
"Account" means an external or internal facility by which securities and cash may be credited, debitedor transferred.

23

FUTURES AND OPTIONS ANNEX
1

SCOPE

1.1

Transactions: The clauses in this Annex apply to transactions in futures, and options. In this Annex,"Transaction" means a transaction listed in sub-clauses (i)-(iv) of the definition of Transaction in theInterpretation annex of the Terms of Business, which constitutes a "Future" or an "Option" (as definedin articles 83 and 84 respectively of The Financial Services and Markets Act 2000 (Regulated
Activities) Order (2001) and traded on a n Exchange.

2

MARKET DISRUPTION

2.1

In the event of severe market disruption and/or price volatilities which may result or may have resulted
in the current market value of a product which is the subject-matter of any outstanding Transaction
moving to an unusual level, we reserve the right to take one or more of the following courses of action:(a) to close out any Transaction where significant loss has occurred or is expected by us;(b) to require an immediate delivery of additional product;(c) to decline to renew maturing, or enter into new, Transactions.

2.2

Business on a Market: Trading may from time to time be suspended or restricted in the interests of,inter alia, maintaining a fair and orderly market. In such circumstances we may be unable to enter intoor close out Transactions.

3

TRADING ARRANGEMENTS

3.1

Matching trades: In respect of every Transaction made between us subject to the Rules of an Exchange
or Market, we shall, unless otherwise agreed in writing in relation to a particular Exchange or Market,
act as principal in any Transaction with you. We shall have make (or arranged to make through anintermediate broker who may be an associate) on a principal-to-principal basis a matching Transaction
on the relevant Exchange or Market or accept the allocation to us of such a Transaction.

3.2

LME Contracts: We agree to act as your agent in respect of Transactions to be effected for youraccount in respect of LME Contracts.

3.3

Give-up: In respect of every Transaction made between us and given up to be cleared by another broker
or dealer as specified by you:(a) if such broker or dealer accepts the give-up, we shall (without prejudice to any claim we may havefor commission or other payment) upon such acceptance cease to be a party to the Transaction and shallhave no obligation to you for its performance;(b) if such other broker or dealer declines to accept the give-up, we shall be entitled at our option either
to confirm the Transaction with you or to liquidate it by such sale, purchase, disposal or otherTransaction or cancellation as we may in our discretion determine, whether on the relevant Exchange
or Market or by private contract or any other feasible method (including taking it over ourselves ortransferring it to an associate); and any balance resulting from such liquidation shall be promptly settled
between us but without prejudicing our rights under this Agreement or otherwise.

24

3.4

International Uniform Give-up Agreement: You authorise us to enter into and execute any
International Uniform Give-up Agreement on your behalf. Where you and we are party to an
International Uniform Give-up Agreement, in the event of any inconsistency the provisions of thisagreement shall prevail over such Agreement.

3.5

Allocation on delivery or exercise: Where the relevant Exchange or intermediate broker does not
specify a particular Transaction when making a delivery or exercising an option, we may allocate
randomly or in a way which seems to us to be most equitable

3.6

Transaction given up to us for clearing: Subject to the Rules of any relevant Exchange or Market, thisclause applies where there is a give-up agreement between you, us and a third party executing broker,
and the reference number or mnemonic applicable to you is quoted by such executing broker when aTransaction is submitted to us for clearing. In a cting as your clearing broker we shall accept aTransaction given up to us for clearing only if we have agreed with you to clear Transactions of such a
description and the acceptance thereof would not breach any position or other limits applicable to youraccount with us. Notwithstanding any provision contained in the relevant give-up agreement, if we
accept such Transaction for clearing, such Transaction shall be binding and conclusive on you
immediately on its acceptance for clearing by us whether or not the details of such Transaction havepreviously been confirmed to us by you. We shall not be liable to you for any losses, costs, expenses
or damages arising from any discrepancy between details in your instructions to such executing broker
and details of Transactions submitted to us for clearing. Any dispute relating to a Transaction given up
or attempted to be given up to us for clearing shall be determined under applicable arbitration rules of
the relevant Exchange or Market.

3.7

Fees paid to executing broker: Subject to the Rules of any relevant Exchange or Market, if a give-up
agreement between you, us and a third party executing broker provides that the executing broker will
invoice us directly for its commissions in relation to the execution of an order, then we shall be entitled
to rely on the details specified in any invoice presented to us by such executing broker and,notwithstanding that the amounts specified in the invoice may be incorrect, you shall fully reimburse
us for any sum paid to the executing broker in respect of that invoice. We shall have no liability to you
for any losses, costs, expenses or damages incurred or suffered by you as a result of an incorrect amountbeing specified in an invoice.

3.8

Exercise of options: You understand that Exchange or Markets have established exercise cut-off times
for the tender of instructions in relation to exercise of options and that options will become worthlessin the event that you do not deliver instructions by such expiration time. You also acknowledge that
we may establish exercise cut-off times which may be earlier than the exercise cut-off times establishedby the relevant Exchange or Market, and you shall have no claims against us arising out of the fact thatan option was not exercised, save in circumstances where the option was not exercised as a direct resultof our negligent failure to inform you of our own exercise cut-off time in respect of the particular option.

3.9

Deemed exercise of options: Where by virtue of Exchange Rules an option is exercised automaticallyunder a back-to-back Transaction which has been entered into by us on your instructions, thecorresponding Transaction to which you and we are both party will be deemed to have been
automatically exercised at the same time.

3.10

Correction of order: You understand that Exchange or Markets may from time to time sanction themaking of contracts by us off-exchange in order to satisfy your order, where there has been an error in
the execution of your order on-exchange. Where a better price (an improvement) can be obtained, we
may seek to secure and offer that improvement to you. Where, in response to your order, we havebought or sold in accordance with the instruction in your order to buy or, as the case may be, to sell but

25

have traded the wrong delivery/expiry month or wrong exercise price of the relevant contract, then we
may in accordance with the Rules of any relevant Exchange offset any loss arising from that tradeagainst any improvement achieved for you in the course of correctly satisfying your order, thus offering
you only the net improvement, if any.
3.11

Market intervention: You understand that business on a market operated by an Exchange may fromtime to time be suspended or restricted or the market may from time to time be closed for a temporary
period or for such longer period as may be determined in accordance with the rules of any relevant
Exchange or Market on the occurrence of one or more events which require such action to be taken in
the interests of, maintaining a fair and orderly market. Any such action may result in our being unable,
and through us, you being unable to enter into Transactions in accordance with the rules of the relevant
Exchange or Market. Furthermore we, and through us, you may from time to time be prevented fromor hindered in entering into contracts in accordance with the rules of the relevant Exchange or Market
as a result of a failure of some or all market facilities. We shall have no liability to you for any losses,
costs, expenses or damages incurred or suffered by you as a result of any of the circumstances or
occurrences referred to above.

4

FINANCIAL FUTURES REQUIRING NON-CASH SETTLEMENT

4.1

Sales: You shall make securities deliverable by you available for settlement on or before the settlement
date. Where there are insufficient securities in your account and we do proceed to settlement, we may
buy the securities required for delivery at a price we believe to be reasonable, charge your account forthe cost thereof, deliver the securities to satisfy the delivery obligation, and credit your account with
the net proceeds thereof (after deduction of commission and other costs).

4.2

Settlement Agent: You will notify us of all relevant details required by us of your settlement agent inrespect of Transactions which may be subject to securities delivery obligations. You will procure thatyour settlement agent enters into such other documentation as may be necessary to ensure that theclearing and settlement of such Transactions takes effect without liability to us.

5

EXCHANGE FOR PHYSICAL (EFP) TRANSACTIONS

5.1

EFPs: Subject to the terms of any particular EFP Transaction, in relation to each EFP Transaction,
upon our becoming bound to Futures Contracts entered into in replication of the Physical Contract, thePhysical Contract shall be automatically discharged.

5.2

Reverse EFPs: Subject to the terms of any particular Reverse EFP Transaction, in relation to each
Reverse EFP Transaction, the Physical Contract with you shall arise automatically upon the closing out(including by creation of opposite positions, on the relevant Exchange or Market) of the Futures
Contracts which the Physical Contract is intended to replace.

5.3

Existence of Transactions: The existence of an EFP Transaction or Reverse EFP Transaction isconditional on registration of the Futures Contracts (or, as the case may be, contracts effecting closeout) occurring on the date specified in the confirmation relating to the Transaction.

5.4

Payment: We will notify you of the amount of any payment due between us as a result of entering into
an EFP Transaction or Reverse EFP Transaction, to whom it is payable and when.

6

DEFINITIONSDefinitions: In this Annex:

26

"EFP Transaction" means a transaction between us which comprises a Physical Contract which isintended to be replaced by Futures Contracts.
"Futures Contract" means a contract on terms prescribed by a n Exchange.
"Physical Contract" means a Transaction the terms of which are comparable with the terms of Futures
Contract, which is not entered into on or back-to-back with a transaction entered into by us on a Exchange.
"Reverse EFP Transaction" means a transaction between us which comprises a Physical Contract whichis intended to replace Futures Contracts.

27

METALS AND SOFT COMMODITIES ANNEX
1

SCOPE

1.1

Transactions: The clauses in this Annex apply to Transactions in commodities. For these purposes,"Transaction" means a transaction relating to, or under the terms of which delivery is contemplated of,any base metal, precious metal or physical commodity.

2

MARKET DISRUPTION

2.1

In the event of severe market disruption and/or price volatilities which may result or may have resulted
in the current market value of a commodity which is the subject-matter of any outstanding Transaction
moving to an unusual level, we reserve the right to take one or more of the following courses of action:(a) to close out any Transaction where significant loss has occurred or is expected by us;(b) to require an immediate delivery of additional commodity;(c) to decline to renew maturing, or enter into new, Transactions.

2.2

Business on a Market: Trading may from time to time be suspended or restricted in the interests of,inter alia, maintaining a fair and orderly market. In such circumstances we may be unable to enter intoor close out Transactions.

3

TITLE AND QUALITY

3.1

Title Guarantee: You covenant that you will deliver all commodities with full title guarantee. Without
limitation any transfer of a commodity pursuant to a Transaction shall be free of any right of retention,
pledge, lien, other encumbrance or any other third party right including a warehouse's lien. As an
exception we agree that commodities held in a warehouse may be transferred to us subject to thewarehouse's general lien, without prejudice to your obligation to pay rent and other charges or liabilities
due to the warehouse which accrue up to and including the date of delivery.

3.2

Representation: You represent and covenant that there is no encumbrance, nor will you create or permit
to exist any encumbrance in respect of any commodity which is in our possession or delivered to us by
you under any Transaction. You repeat this representation as of the time of entry into any Transaction
relating to any commodity.

3.3

Passing of title: Property in any Warrant-based Commodity shall pass at the time the Warrant isdelivered. In any other case, unless otherwise agreed in writing, property shall pass upon delivery of
the commodity. Notwithstanding the foregoing, in any Transaction under which we sell a commodity
to you, property in the commodity shall remain with us until we have received full payment for it.

3.4

Quality: Unless otherwise agreed, any commodity to be delivered under a Transaction shall bedelivered in accordance with the requirements of applicable Market rules or the market by reference towhich such commodity is described.

3.5

Statutory conditions: When we transfer a commodity to you all statutory and implied conditions andwarranties as to title, correspondence to description, quality and fitness for purpose are excluded.

28

4

DELIVERY

4.1

Delivery: Delivery of any Warrant-based Commodity shall be effected by transfer of Warrants. Where
we hold Warrants in our physical possession for you, delivery by you to us shall be effected by ourappropriating the requisite number and amount of Warrants. Delivery by us to you of any Warrantbased Commodity where we hold Warrants in our physical possession shall be effected by us
immediately segregating the requisite number and amount of Warrants held by us, after which we shallhold them and (insofar as within our control) the commodity to which they relate to your order.

4.2

SWORD deliveries: Where Warrants are capable of being held in SWORD, transfer of Warrants shallbe effected by transfer to or from our SWORD account. If you do not have a SWORD account, and we
hold your Warrants in our client account in SWORD, transfer of appropriate Warrants from our client
account shall constitute delivery. In any other case where we hold your Warrants in SWORD, andsubject to contrary written agreement between you and us, transfer to us shall be deemed to occur at
10am London time on the prompt date applicable to the Transaction.

4.3

Risk: The risk in any commodity bought by you will pass to you on delivery. Where a commodity is
in your possession before the property in it has passed to you, you agree fully to preserve, or procure
the full preservation of, its condition and make good any damage or deterioration that may occur, or
fully compensate us for any such damage or deterioration

4.4

Delivery Costs: Unless otherwise agreed in writing between us, any costs incurred by us in effecting
physical delivery of any commodity (including, without limitation, costs in respect of collection,
packaging, shipment, storage, warehousing or insurance) shall be borne by you.

4.5

Place of Delivery: Any commodity which is required to be delivered physically by you to us will bedelivered by you at your expense to such location as we may specify.

5

CUSTODIANSHIP

5.1

Commodities purchased by you: We may, from time to time, at your request but in our discretion,agree to hold on your behalf any commodity or documents of title to commodities which you haveacquired from us pursuant to a Transaction. Such commodity or documents will be segregated fromany like commodity or documents in our ownership but otherwise will be subject to the same custodyand insurance arrangements as our own property. We shall owe you no fiduciary duty in respect of any
such commodity or documents and our responsibility shall be limited to taking reasonable care to
restore such commodity or documents to you upon your giving us reasonable notice. We reserve theright to make a reasonable charge for this service.

5.2

SWORD Warrants: Where a Warrant is capable of being held in SWORD we shall hold such a Warrant
physically for you only for temporary periods. We may give you reasonable notice to collect any such
Warrants or to cause them to be lodged in SWORD in accorda nce with the SWORD Regulations.

5.3

Collection of Warrants: Where you have Warrants which are in our physical possession and haveauthorised a person to collect Warrants from us, we shall not verify the identity of any person claiming
to be so authorised, and we owe you no duties to operate any specific security procedures unlessseparately agreed in writing between you and us.

5.4

Rent: You will in due time pay rent and other charges applicable to any commodity represented by any
Warrant held by us for you.

5.5

Liability: Our liability to you in respect of any Warrant held by us for you is limited as follows: weshall have no liability for any damage, loss, expenses or liability of any nature which you may suffer as29

a result of any act or omission by us except to the extent of direct losses or expenses attributable to our
fraud or wilful default or negligence. In the event of such direct losses or expenses our liability islimited to issuing an indemnity in respect of the market value of the Warrant at the time of discoveryof the loss.
5.6

Storage and Insurance: If you deposit commodities, documents of title to commodities, or othertangible assets with us as margin or otherwise, we reserve the right (but have no obligation) to insure
them, to charge you and debit your account with the costs of storage and insurance either periodicallyor when we return the assets to you, and to refuse withdrawal until such costs have been paid. If wecollect, deliver or hold commodities or other tangible assets on your behalf, we do so at your risk.

6

HOLDING YOUR WARRANTS IN SWORD

6.1

Bailment: Where you do not have a SWORD Account we may hold Warrants on your behalf in
SWORD. If we do so we act as bailee and owe you no fiduciary duty, and we do not undertake theresponsibilities of a trustee or any other duties in relation to such Warrants not implied by the law ofbailment.

6.2

Warrant lodgment: You consent for the purposes of the SWORD Regulations to us lodging Warrants
with the Depository and to our dealing with the Warrants on the terms of the SWORD Regulations.
Where we have lodged a Warrant on your behalf, you represent and warrant to us that the Warrant andthe commodity to which it relates are beneficially owned by you and free of encumbrances and that all
requirements of the SWORD Regulations for lodgment are satisfied.

6.3

Warrant withdrawal: If you wish to withdraw Warrants which we are holding for you in SWORD,
you will give us reasonable notice to enable us to comply with the SWORD Operating Procedures, andwe shall not be responsible other than to take reasonable steps to comply with your request insofar as
it is practicable.

7

BULLION

7.1

VAT: Where we are treated by applicable law or fiscal practice to make a supply for VAT purposes toany person by virtue of our or any custodian for us relinquishing control of any precious metal, and
VAT is or becomes chargeable on such supply, you shall on demand pay to us a sum equal to theamount of such VAT.

7.2

Delivery: Bullion to be delivered to us shall be delivered to or account. Bullion to be delivered by us
to you shall be delivered as soon as reasonably practicable to an account at a custodian specified by you
in writing, and any bullion held by us for you shall be held on an unallocated basis. Delivery to us or
by us shall be deemed effective at the moment when we confirm receipt or despatch to you.

7.3

Title: In relation to all deliveries of bullion to an unallocated account, all covenants and warranties as
to title (including those specified elsewhere in these terms) are excluded, save that it is warranted by
the party effecting delivery that, as of the moment when delivery is effected, the person with whom theaccount is held owes an obligation to the recipient to deliver the relevant amount of bullion, subject tothe terms and conditions of the account and any rights of set-off exercisable by that person

7.4

Quality: All deliveries of bullion by you to us shall as a minimum meet the specifications andrequirements of London good delivery or equivalent market standard laid down from time to time by
the London Bullion Market Association or the London Platinum and Palladium Market
Definition: In this clause, "bullion" means gold, silver, palladium or platinum30

8

INTERPRETATIONIn this Annex:"SWORD"" means the system for electronic transfer of entitlement to Warrants of certain descriptions
regulated by the LME;
"SWORD Regulations" means the LME's regulations governing the operation of SWORD, and unlessotherwise expressly defined, any term defined in the SWORD Regulations has the same meaning;"Warrant" means a warehouse warrant issued in circumstances regulated by a Market which evidences
entitlement to a commodity;"Warrant-based Commodity" means a commodity which, under the rules of a Market, is capable of being
delivered by transfer of a Warrant.

31

OTC DERIVATIVES ANNEX

1

SCOPE

1.1

Transactions: The clauses in this Annex, except to the extent inconsistent with Applicable Regulations,apply to OTC Transactions. OTC Transactions shall be deemed to be included in the definition of"Transaction" as set out in the Terms of Business.

2

MASTER CONTRACT

2.1

Netting: Clause 12 of the Terms of Business does not apply to Master Transactions.

2.2

Conflict: If there is a conflict between the terms of the Master Contract and terms of the Agreement,
the terms of the Master Contract will prevail.

3

INTERPRETATIONIn this Annex:"Master Contract" means an ISDA Master Agreement, FEOMA, IFEMA or any other contract (including but
not limited to confirmations) between the parties, apart from this Agreement, the effect of which is to close out
or accelerate transactions or obligations upon the occurrence of an event of default and cause that only a net
sum is payable in respect of them by one party to the other;"FEOMA" means Foreign Exchange and Options Master Agreement;"IFEMA" means International Foreign Exchange Master Agreement;"ISDA" means the International Swaps and Derivatives Association, Inc.;"Master Transaction" means an OTC Transaction subject to the terms of a Master Contract; and"OTC Transaction" means any over the counter derivative transaction, any Master Transaction, and any otherover the counter transaction we agree in the applicable confirmation to treat as an OTC Transaction for the
purposes of this Annex.

32

ELECTRONIC TRADING ANNEX

1

SCOPE

1.1

These clauses apply to your use of any Electronic Services. They are supplemental to and subject toany separate terms agreed between us or as notified to you in connection with any specified service.

2

DIRECT ELECTRONIC ACCESS

2.1

This Annex details the essential rights and obligations of you and us in relation to the provision by us
of DEA Services. We retain responsibility for our obligations arising pursuant to the Applicable
Regulations implementing MiFID2 in connection with the DEA Services. We are responsible for
ensuring that you comply with MAR and with the rules of any applicable Trading Venue in connection
with the DEA Activities.

2.2

You shall, in relation to the DEA Activities:

2.3

(a)

comply with (and shall not cause us to fail to comply with) all Applicable Regulations and suchrules, regulations and procedures of a Trading Venue as may be applicable from time to time.
Links to such Trading Venue rules may be found at https://www.rbccm.com/en/policiesdisclaimers.page; and(b)

not exceed (or cause us to exceed) any credit, trading and position limits or thresholds as may be
set or otherwise imposed by the Trading Venue from time to time (whether or not such limits or
thresholds are specified as applying directly to you, us or any other person).

We may:(a)cancel or modify (or procure the cancellation or modification of) any Transaction, or order for a
Transaction, submitted by or on behalf of you pursuant to the DEA Activities;(b)

impose and modify such restrictions (including, without limitation, price collars, order blocking
mechanisms, throttles, circuit breakers, access withdrawals and suspensions) upon or in respectof the DEA Activities and any Transactions, or orders for Transactions, effected or proposed tobe effected by or for you through or pursuant to such DEA Activities;(c)

procure that any Trading Venue performs or imposes, or take any action that shall or may resultin a Trading Venue performing or imposing, any of the measures referred to in the foregoing
Clauses 2.3(a) and 2.3(b); and(d)conduct monitoring and surveillance activities in respect of the DEA Activities,

in each case as we in our absolute discretion deem appropriate or reasonably require for the purposesof ensuring that we and you comply with any Applicable Regulations (including, without limitation,
MiFID2 RTS 6) and the rules, regulations and procedures of any applicable Trading Venue with any
credit, trading and position limits or thresholds as may be set or otherwise imposed thereby.
2.4

Due diligence measures in respect of DEA Services(a)

We shall conduct such due diligence assessments of you and your systems and trading activities
as we consider appropriate for the purposes of ensuring you comply with Applicable Regulation

33

(including, without limitation, MiFID2 RTS 6) or the rules, regulations and procedures of any
applicable Trading Venue ("DEA Due Diligence").
(b)

You shall commence, as soon as reasonably practicable following a request, providing to us suchinformation and access to information as we may reasonably require to conduct such DEA Due
Diligence.

(c)

You shall from time to time (and as soon as practicable following such time as you becomeawareof the relevant developments or facts) notify us of any material developments or facts that may
occur or arise and which may reasonably be expected to impact our DEA Due Diligenceassessment.

(d)

We may refuse to provide, cease or suspend your access to the DEA Services or block, cancel
or refuse to execute any Transaction or order for Transaction in connection therewith, where you
have failed to satisfy such DEA Due Diligence, or have not provided such information as we
may reasonably require to conduct such DEA Due Diligence.

2.5

Delegated access for DEA Services: You may not sub-delegate access to any direct market accessfacilities (or other electronic access facilities) provided or sponsored by us or otherwise allow any otherperson (other than your employees and agents, in the course of acting for you).

3

ACCESS

3.1

Once you have gone through the security and client on-boarding procedures associated with an
Electronic Service provided by us, you will get access to such service, unless agreed otherwise or statedon our website. We may change our security procedures at any time and we will tell you of any newprocedures that apply to you as soon as possible.

4

RESTRICTIONS ON SERVICES PROVIDED

4.1

There may be restrictions on the number of Transactions that you can enter into on any one day andalso in terms of the total value of those Transactions when using an Electronic Service. You
acknowledge that some Markets place restrictions on the types of orders that can be directly transmitted
to their electronic trading systems. These types of orders are sometimes described on synthetic orders.
The transmission of synthetic orders to the Market is dependent upon the accurate and timely receipt ofprices or quotes from the relevant Market or market data provider. You acknowledge that a Market
may cancel a synthetic order when upgrading its systems, trading screens may drop the record of suchan order, and you enter such orders at your own risk. You also acknowledge that we have the right (butnot the obligation) to set other limits and/or parameters to control your ability to use an ElectronicService at our absolute discretion. Such limits and/or parameters may be amended, increased,
decreased, removed or added to by us at our absolute discretion and may include (without limitation):(i) controls over maximum order amounts and maximum order sizes; (ii) controls over our total
exposure to you; (iii) controls over prices at which orders may be submitted (to include (without
limitation) controls over orders which are at a price which differs greatly from the market price at thetime the order is submitted to the order book); (iv) controls over the System (to include (without
limitation) any verification procedures to ensure that any particular order or orders has come from you);or (v) any other limits, parameters or controls which we may be required to implement in accordancewith Applicable Regulations.

5

RIGHT OF ACCESS

5.1

In respect of any Market: to which we allow you to submit orders or receive information or data using
the Electronic Services, we may at any time or times, on reasonable notice (which, in certain34

circumstances, may be immediate) enter (or to instruct our or the Market's subcontractors to enter) yourpremises and inspect your System to ensure that it complies with the requirements notified by us to you
from time to time and that you are using the Electronic Services in accordance with this Agreement andany requirements of any relevant Market or Applicable Regulations.
5.2

Access requirements: You will be responsible for providing the system to enable you to use an
Electronic Service. You will use each Electronic Service solely at your business premises for your own
internal business and commercial purposes;

5.3

Virus detection: You will be responsible for the installation and proper use of any virus
detection/scanning program we require from time to time.

5.4

Use of information, data and software: In the event that you receive any data, information or software
via an Electronic Service other than that which you are entitled to receive pursuant to this Agreement,
you will immediately notify us and will not use, in any way whatsoever, such data, information orsoftware.

6

MAINTAINING STANDARDS:
When using an Electronic Service you must:i.

ensure that your System is maintained in good order and is suitable for use with such ElectronicService;ii.

run such tests and provide such information to us as we shall reasonably consider necessary toestablish that your System satisfies the requirements notified by us to you from time to time;iii.

carry out virus checks on a regular basis;iv.

inform us immediately of any unauthorised access to such Electronic Service or any unauthorised
Transaction or instruction which you know of or suspect and, if within your control, cause such
unauthorised use to cease; andv.

not at any time leave the terminal from which you have accessed such Electronic Service or letanyone else use the terminal until you have logged off such Electronic Service.

6.1

System defects: In the event you become aware of a material defect, malfunction or virus in the System
or in an Electronic Service, you will immediately notify us of such defect, malfunction or virus andcease all use of such Electronic Service until you have received permission from us to resume use.

6.2Intellectual Property: All rights in patents, copyrights, design rights, trade marks and any otherintellectual property rights (whether registered or unregistered) relating to the Electronic Services
remain vested in us or our licensors. You will not copy, interfere with, tamper with, alter, amend or
modify the Electronic Services or any part or parts thereof unless expressly permitted by us in writing;reverse compile or disassemble the Electronic Services; nor purport to do any of the same or permit anyof the same to be done, except in so far as such acts are expressly permitted by law. Any copies of theElectronic Services made in accordance with law are subject to the terms and conditions of thisAgreement. You shall ensure that all the licensors' trademarks and copyright and restricted rights
notices are reproduced on these copies. You shall maintain an up-to-date written record of the numberof copies of the Electronic Services made by you. If we so request, you shall as soon as reasonably
practical, provide to us a statement of the number and whereabouts of copies of the Electronic Services.

35

7

LIABILITY AND INDEMNITY:

7.1

Without prejudice to any other terms of this Agreement, relating to the limitation of liability andprovision of indemnities, the following clauses shall apply to our Electronic Services.

7.2

Responsibility: You will be responsible for all orders entered on your behalf via the System and you
will be fully liable to us for the settlement of any Transaction arising therefrom.

7.3

Proof of receipt of order: We shall only be responsible for the execution of orders in circumstanceswhere you have received a notification generated by us or the relevant Market (as appropriate) to theeffect that your order has been received by that Market. You will bear the risk of any order which has
been inaccurately or erroneously transmitted or which has been lost during transmission, for any reason
whatsoever (including, but not limited to malfunctions of the System).

7.4

System errors: We shall have no liability to you for damage which you may suffer as a result oftransmission errors, technical faults, malfunctions, illegal intervention in network equipment, network
overloads, malicious blocking of access by third parties, internet malfunctions, interruptions or otherdeficiencies on the part of internet service providers. You acknowledge that access to ElectronicServices may be limited or unavailable due to such system errors, and that we reserve the right upon
notice to suspend access to Electronic Services for this reason.

7.5

Delays: Neither we nor any third party software provider accepts any liability in respect of any delays,
inaccuracies, errors or omissions in any data provided to you in connection with an Electronic Service.

7.6

Viruses from an Electronic Service: We shall have no liability to you (whether in contract or in tort,
including negligence) in the event that any viruses, worms, software bombs or similar items are
introduced into your System via an Electronic Service or any software provided by us to you in orderto enable you to use such Electronic Service, provided that we have taken reasonable steps to prevent
any such introduction.

7.7

Viruses from your System: You will ensure that no computer viruses, worms, software bombs orsimilar items are introduced into our computer system or network and will indemnify us on demand forany loss that we suffer arising as a result of any such introduction.

7.8

Unauthorised use: We shall not be liable for any loss, liability or cost whatsoever arising from any
unauthorised use of the Electronic Service. You shall on demand indemnify, protect and hold us
harmless from and against all losses, liabilities, judgements, suits, actions, proceedings, claims,
damages and costs resulting from or arising out of any act or omission by any person using an ElectronicService by using your designated passwords, whether or not you authorised such use.

7.9

Markets: We shall not be liable for any act taken by or on the instruction of a Market, clearing houseor regulatory body.

7.10

Exclusions: To the fullest extent legally permissible, except as otherwise expressly stated in thisAgreement, all conditions, warranties and representations expressed or implied by statute, common law
or otherwise in relation to any Electronic Service are excluded. This clause shall not be affected by thetermination of this Agreement.

7.11

Suspension or permanent withdrawal with notice: We may suspend or permanently withdraw an
Electronic Service, by giving you 10 days' written notice.

7.12

Immediate suspension or permanent withdrawal: We have the right, unilaterally and with immediate
effect, to suspend or withdraw permanently your ability to use any Electronic Service, or any part36

thereof, without notice, where we consider it necessary or advisable to do so, for example due to yournon-compliance with the Applicable Regulations, breach of any provisions of this Agreement, on theoccurrence of an Event of Default, network problems, failure of power supply, for maintenance, or toprotect you when there has been a breach of security. In addition, the use of an Electronic Service may
be terminated automatically, upon the termination (for whatever reason) of (i) any licence granted to us
which relates to the Electronic Service; or (ii) this Agreement. The use of an Electronic Service may
be terminated immediately if an Electronic Service is withdrawn by any Market or we are required towithdraw the facility to comply with Applicable Regulations.
7.13

Effects of termination: In the event of a termination of the use of an Electronic Service for any reason,
upon request by us, you shall, at our option, return to us or destroy all hardware, software anddocumentation we may have provided you in connection with such Electronic Service and any copies
thereof.

37

Version: 25 May 2022

A GUIDE TO THE STRUCTURE, MARKET TERMINOLOGY AND ORDER EXECUTION OF THE
LONDON METAL EXCHANGE

INTRODUCTION AND PURPOSE
1.

This Guide is designed to provide market participants on the London Metal Exchange (the“LME”), and particularly Clients of Members, with an overview of the structure of the LME, market
terminology, and order execution. It is also intended as guidance to help participants interpret
the Rules and Regulations of the LME (the “LME Rulebook”) and any Notice issued pursuant toRegulation 2 of Part 1 of the LME Rulebook (together the “LME Rules”) (and also in certain
circumstances the Rules and Procedures of LME Clear Limited (the “LME Clear Rules”)) and tooutline certain behaviours the LME expects of its market participants. It is not a comprehensive
trading guide, nor a complete guide to market terminology. Market participants should always
ensure that their requirements are explained in detail to the Member responsible for order
execution.

2.

This Guide is not a substitute for reading the LME Rules, the LME Clear Rules or the terms ofbusiness agreed between Clients and Members. In the event of any conflict between this Guideand either the LME Rules or the LME Clear Rules, the LME Rules and the LME Clear Rules
shall prevail.

3.

Capitalised terms not otherwise defined herein shall have the meaning ascribed to them in the
LME Rulebook, as amended from time to time.

THE LME
Execution Venues
4.

Trades on the LME may be agreed on any of the LME’s three trading venues (defined as
Execution Venues in the LME Rulebook): by open outcry in the Ring (during ring and kerb
sessions), between Members in the inter-office market, and over the LME’s electronic trading
system, LMEselect. LME trading times are available on the LME website athttps://www.lme.com/en-GB/Trading/Trading-venues/Trading-times#tabIndex=0.

5.

Depending on the time of day, it is possible for Members to deal in the inter-office market, byLMEselect, or in the Ring. Clients should specify which mechanism their broker should use toeffect an order, where they have a preference.

The Ring
6.

Only Category 1 Members may trade in the Ring.

7.

Clients can follow the Ring market activity by monitoring quoted and traded prices disseminated
via the LME market data dissemination system, or by listening to the simultaneous floor
commentary provided by Member(s). The LME market data dissemination system publishes

THE LONDON METAL EXCHANGE
10 Finsbury Square, London EC2A 1AJ | Tel +44 (0)20 7113 8888
Registered in England no 2128666. Registered office as above.

LME.COM

quotes and trades during Ring and kerb sessions to market data vendor information services,and via its own market data platforms.
8.

Members can continue to “make a market” when requested by a Client during the Ring and kerb
sessions, although this is entirely at the Member’s discretion. Alternatively, the Client can decide
whether to place an order.

9.

Certain Contracts1 are not available for trading in the Ring.

Inter-office
10.

Inter-office trading is conducted between Members, or between Members and their Clients, by
telephone or by electronic means. On contacting a Member for a quote, Clients will usually beprovided with the Member’s current bid and offer. The Client may trade on this quote, call anotherMember in an attempt to improve the quote, leave a resting order with a Member, or wait andmonitor prices on the LME market data dissemination system.

11.

To ensure adequate transparency in this market (as required by MiFIR), the LME operates a
Systematic Fixed Price Auction (“SFPA”). For those in scope orders, the auction process will
start at the point the LMEsmart matches the PTT Orders and last for a period of 30 seconds.
During this period, any Member (other than a RIB) is able to enter their own bids/offers into that
auction in LMEsmart, at the same price as the originating orders. Upon the completion of theSFPA, the bids and offers remaining in LMEsmart will be matched on a time priority basis.

LMEselect
12.

Category 1, 2, 3 and 4 Members may be LMEselect Participants and enter into Contracts on
LMEselect. In addition, Category 1, 2 and 4 Members may make available to a Client the orderrouting facility of the LMEselect API.

13.

LMEselect allows LMEselect Participants to trade Contracts, including (but not limited to)Futures Contracts, Metal Options, Traded Average Price Options, Monthly Average Price
Futures, Ferrous Cash Settled Futures, Non-Ferrous Cash Settled Futures and LMEminiContracts. As explained above, some brokers offer their Clients an order-routing facility via an
API where they can place orders, and execute trades.

14.

Subject to relevant licensing requirements, market data vendors may display, amongst otherthings, bid and offer prices available on LMEselect, the total volumes available at these prices(subject to iceberg orders – see paragraph 62 below), and the price and volume of each trade.

15.

Where a Member permits a Client to use the order-routing facility of the LMEselect API, and, asa result, (a) one or more Cleared Contracts comes into effect, and (b) one or more Client

1

Metal Options, Traded Average Price Options, Monthly Average Futures, LMEmini Contracts, Steel
Scrap, Steel Rebar, Steel HRC FOB China, Steel HRC N. America, Cash Settled Cobalt, Molybdenum
and Alumina.

2

Contracts come into effect, then the Client Contract must be on the same commercial terms as
the relevant Cleared Contract (save that it may be marked up or down to reflect a commission
payable by the Client). The Member must ensure that the Client Contract and the relevant
Cleared Contracts are inputted into the Matching System, and that Client orders are not offset
against each other (for further information, see the section entitled “Transacting on behalf ofClients” below).
16.

The LME understands that Members may offer over-the-counter (“OTC”) contracts to theirclients on the basis of electronic orders sent to the Member (for example through the Member’s
own dealing system). The Member may directly hedge such OTC contracts on LMEselect (byentering into a Cleared Contract, but without giving rise to a back-to-back Client Contract),
provided that the OTC contracts will be considered Relevant OTC Contracts for the purpose of
the LME’s Financial OTC Booking Fee Policy (for further information on this Policy, see thesection entitled “OTC Contracts and Use of LME IP” below).

Contract Formation and Clearing
17.

Trades agreed on the LME shall give rise either to (a) Cleared Contracts, or (b) Cleared
Contracts and back-to-back Client Contracts. Each Trading Member is responsible for the input
into the LME’s Matching System, LMEsmart, of all Agreed Trades by it in relation to Contracts.

18.

Cleared Contracts are cleared by the LME’s appointed clearing house, LME Clear. LME Clear
clears Contracts on an open offer basis. LME Clear will make an offer to each party to the trade:it will offer to act as the buyer to the party who wishes to be the seller, and it will offer to act as
the seller to the party who wishes to be the buyer. On acceptance of LME Clear’s offer by eachparty, two Cleared Contracts will be formed: one between LME Clear and the seller; anotherbetween LME Clear and the buyer. The time of execution will depend on the Execution Venue:
 transactions (i.e. Agreed Trades) agreed in the Ring – the Cleared Contracts will ariseat the time the trade is agreed in the Ring; Agreed Trades arising in LMEselect – the execution time of the Cleared Contracts willbe the point at which LMEselect confirms that the Agreed Trade has been matched andthat all pre-execution checks have been satisfied; and Agreed Trades in the inter-office telephone market – these will initially form aContingent Agreement to Trade, the particulars of which the parties must then submit to
the Matching System. The time of execution of the Cleared Contracts will be at the pointthat the Matching System confirms that the trades have been matched and that all preexecution checks have been satisfied. This remains the case for trades that arise from a
SFPA (save in the case of trades between RIBs and their clients, which shall initially giverise to an obligation on the RIB to submit the particulars of the initiating auction pair to the
Matching System, rather than giving rise to a Contingent Agreement to Trade – see further
Part 3 of the LME Rules.)

3

19.

Where an Agreed Trade is made with a Client, upon execution of the Agreed Trade, Cleared
Contracts shall be formed between the responsible Clearing Member and LME Clear and a backto-back Client Contract shall automatically and immediately come into effect between the Client
and the Member on the same terms as the Cleared Contract2. Where the Clearing Member
facilitates Indirect Clearing arrangements, i) a further Client Contract will arise between the Client
and the Indirect Client (where the Client is a Category 4 Member) or ii) a back-to-back exchange
traded derivatives contract will be formed between the Client and the Indirect Client (where the
Client is not a Category 4 Member).

20.

In order to maintain the smooth and orderly operation of the market, the LME and LME Clear
will carry out a number of pre-trade and post-trade checks. Further, Members must haveadequate processes in place to ensure both they and their Clients have sufficient collateral inplace before entering into trades.

LME Base
21.

The LME offers contracts in base and ferrous metals (described in the LME Rules as “LME BaseContracts”). The LME has seven different categories of membership for the LME Base Service.

22.

Where an Agreed Trade relates to an LME Base Contract, it shall be booked in LMEsmart in amanner to ensure the following allocation:a.

an Agreed Trade between two Clearing Members shall be allocated to each Clearing
Member's house account at LME Clear;b.

an Agreed Trade between a Client and the Clearing Member responsible for clearing theAgreed Trade shall result in the allocation of Cleared Contracts to both the Clearing
Member's house account and the Clearing Member's appropriate client account at LME
Clear; andc.

an Agreed Trade between a Client and any other person shall result in the allocation ofCleared Contracts to both the house account of the Clearing Member responsible forclearing the Agreed Trade and the client account of the Clearing Member responsible forclearing the Agreed Trade.

23.

This is sometimes referred to as a “T4” model. In cases (b) and (c) above, the trade will initiallybe entered into the house account, and the Clearing Member responsible for clearing the Client’s
trades must cross the trade out of the house account into the client account.

24.

Most LME Base Contracts are physically deliverable (with the exception of certain Contracts,
including Ferrous and Non-Ferrous Cash Settled Futures, and so certain categories of Members
must be LMEsword Account Holders for the LME Base Service.

2

There are specific arrangements where the Client is a Category 4 Member. These are covered by
LME Notice 17/184 dated 25 May 2017.

4

Principal Nature
25.

All Contracts are between parties acting as principals. This prevents any party entering into aContract as agent for someone else but does not prevent an agent arranging a Contract between
two parties if the resulting Contract is between disclosed parties, each acting as a principal. It isan essential requirement of a Client Contract that one party must be a Category 1, 2 or 4
Member. A list of Members is on the LME website: www.lme.com. A principal relationship does
not mean that Members do not take on quasi-fiduciary responsibilities when they execute trades
for Clients. In particular, if a Member undertakes to deliver a particular service, for example, todeal a specific number of lots in the Ring, then it should take care to ensure that it complies withall the terms of such an order.

26.

In respect of Agreed Trades between Members, an LME broker buying futures or options
Contracts from another Member cannot do so as agent for its Client. Where a Member buys
metal from another Member with a view to selling that metal to its Client, this is achieved byentering into a back-to-back Client Contract with the Client. Members and Clients can agree theconditions that apply to their Client Contracts. For example, a Client may make it a condition toits entry of a Client Contract that the Member must enter into a back-to-back Agreed Trade withanother Member for the metal being bought or sold. This does not make the Client a party to theAgreed Trade with the other Member (or the resulting Cleared Contract with LME Clear) but
does create additional duties and obligations owed by the Member under the Client Contract.

27.

Open position statements issued to Clients or Indirect Clients3 of a Category 1 or 2 Member
must state clearly “THIS IS AN LME REGISTERED CLIENT CONTRACT”. Open position
statements issued by Clients who are not Category 1, 2 or 4 Members to their own clients4should not state that the contracts are LME Registered Client Contracts, but may state that they
are LME exchange-traded derivatives (or similar) to distinguish them from OTC trades provided
that they have entered into Indirect Clearing Arrangements in accordance with the LME Rules.
Contract criteria relating to Contracts, including metal specifications, acceptable currencies,
prompt dates, option strike prices for metals etc. are detailed in the LME Rules.

OTC Contracts and Use of LME IP
28.

Instead of entering into Contracts governed by the LME Rules, Members and other third parties
may enter into OTC contracts either in respect of LME Warrants, or utilising LME reference
prices. Where this is the case, the contract should clearly state that “THIS IS NOT AN LMEREGISTERED CLIENT CONTRACT”. OTC contracts are not governed by the LME Rules andare not registered with, and/or cleared by, LME Clear. OTC contracts result in a bilateral credit
exposure between the two parties. In the case of a party’s default, the general law of insolvency
would apply and neither party would benefit from any protection under the LME’s and LME
Clear’s purpose-designed default rules. Also, contracts that are opened and closed at the same

An “Indirect Client” of a Clearing Member pursuant to the LME Rules may include a Client of a
Category 4 Member.
4
Such Clients being indirect clients of the Category 1, 2 or 4 Member but not “Indirect Clients” pursuant
to the LME Rulebook.
3

5

broker do not benefit from the transparent global pool of competitive offers which the LME
facilitates. Members providing their clients with OTC contracts should explain to their clients thedifference between OTC contracts and the LME’s Contracts, and the different levels of protection
afforded by each.
29.

The LME applies a Financial OTC Booking Fee Policy on Members and other third party financial
intermediaries who reference LME prices or other proprietary information in their OTC contracts.
Such entities must register with the LME, report relevant OTC trades, and pay the relevant fees5.
Members and other third parties who reference LME prices or other LME proprietary information
in OTC contracts or otherwise use LME proprietary information must ensure that they haveentered into the appropriate licences with the LME.

30.

The LME Rules also contain restrictions on: (a) the use of LME Data, Product Specifications orother Intellectual Property Rights for the purpose of trading, clearing or settling Non-LME
Platform Contracts; (b) using LME Warrants to settle Non-LME Platform Contracts or the ExCleared functionality of LMEsword to facilitate the settlement of Non-LME Platform Contracts;(c) using the inter-office market to route Non-LME Platform Contracts through the systems of
the LME; and (d) bringing onto the LME Non-LME Platform Contracts.

31.

Any Member operating electronic dealer-to-client platforms for OTC contracts will also need toconsider the relevant provisions of MiFID II relating to systematic internalisers, pre- and posttrade transparency, etc.

Transacting on Behalf of Clients
32.

When transacting on the LME’s Execution Venues, Members may transact both for their own
account (i.e. on a proprietary basis, including where they are making prices on the LME) and on
behalf of other market participants (i.e. as broker).

Dual Capacity
33.

The LME's market model operates such that Members are able to operate on both a proprietarybasis and on behalf of its Clients at the same time, and by the same traders. This means thatwhen trading with a Client, the Member can fill the Client directly from their own proprietary
trading book, rather than going to the central market, and thus act both on behalf of the Client
and their proprietary interest at the same time. In this context, the Member is acting in so-called“dual capacity”. As such, the nature of the contracts traded by the Member with the Client, andthe Member with the market, may be different. This differs from so-called “agency execution”,
whereby the Member solely acts on behalf of the Client in the central market. It should be notedthat some execution on the LME market (generally in respect of more liquid prompt dates) may
be undertaken under an agency execution model. The complexity of the LME prompt datestructure, and the lack of liquidity in the central market for parts of the structure mean that thisdual capacity model is advantageous, as it allows Members to directly provide their Clients with5

For further information, see https://www.lme.com/Trading/New-initiatives/Financial-OTC-BookingFee.

6

liquidity. The dual capacity model does however give rise to specific risks of ensuring a duty ofcare to the Client. The LME expects Members who are permitted to transact both on their own
account and on behalf of other market participants to understand the specific compliance risksof each respective transaction model and have adequate systems in place to mitigate against
these risks.
34.

Members may act in a particular manner depending on a number of circumstances, including
the size of the order, the liquidity of the market at the time the order was placed, and (in relation
to Client business), not least, the Client’s instructions. Client orders may be filled directly from a
Member’s “book”, or following the purchase/sale of Contracts in the LME market, or a
combination of the two.

35.

The validity and desirability of this market structure was confirmed during the LME's 2017
Discussion Paper, and the LME is committed to its maintenance for as long as it remains
consistent with both the needs of its users and the LME's regulatory obligations.

Considerations Around Dual Capacity Execution
36.

Clearly, the dual capacity model places a greater onus on Members to demonstrate that they
act in the best interests of their Client. While it is for Members to satisfy themselves and their
Clients of the sufficiency of their arrangements, the LME would make certain observations as tothe behaviours which it would expect to observe in a dual capacity market. This represents a
non-exhaustive list.

37.

At the heart of such a model must be a clear understanding between Member and Client as tothe basis on which execution is being undertaken - in particular, whether a particular Client order
is to be executed under a dual capacity or an agency model. It is expected that Members areclear with their Clients in respect of the execution model.

38.

Furthermore, Clients should be made aware of the fact that - as a natural corollary of the dual
capacity model - the Member may eventually be able to hedge the risk at a more attractive pricethan that offered to the Client. The LME understands that Clients are, in general, satisfied withsuch a model (given that the Member is, in effect, being compensated for accepting the risk
associated with the trade).

39.

The dual capacity model also places responsibilities on Clients – for example, Clients withspecific order requirements must make these known to the Member at the time the order isplaced.

40.

The LME further recognises that certain Client execution scenarios may be more complex. For
example, a Member may seek to trade a Client order in the market, while guaranteeing the Clienta particular price for their order. In such a case, it would again clearly be necessary for the Client
to be fully aware of the Member's execution approach - and, in particular, the impact on the
Client's economic terms, were the Member to subsequently obtain a price better than thatguaranteed to the Client.

7

41.

Clearly, the broader rules of market conduct (arising from, without limitation, the European
Market Abuse Regulation, as onshored into UK law pursuant to the European Union(Withdrawal) Act 2018 following Brexit, and as amended from time to time) apply to firms tradingon the LME market, whether such firms are operating in an agency execution or dual capacity
model. Restrictions on activities such as front-running apply when operating in a dual capacity
market and also when acting in agency execution - and, in particular, the LME would differentiate
between (i) Member trades made purely for the purposes of offsetting risk from a Client position,and (ii) Member proprietary trading. The latter activity, in particular, must be appropriately
segregated from Client execution (whether such Client execution is under a dual capacity oragency execution model).

42.

Clients should be clear about the conditions that apply to the terms on which their Client
Contracts are traded and about the obligations and duties that the Member owes as a result of
those conditions. Members should be clear about the duties and obligations they owe as a resultof the conditions attaching to the terms on which their Client Contracts are traded.

Rules Preventing Netting Up
43.

The LME is concerned to ensure that the market can view a transparent post-trade record of
market activity and that financial advantage is not extracted by the systematic “netting up” oftrading designed to reduce the fee burden. Consequently, Members must ensure that, in respectof trades arranged in the inter-office market or on LMEselect, the details of each Agreed Tradeentered into the Matching System constitute the details of a single transaction, without theapplication of any prior netting, compression or aggregation of multiple transactions. However,prompt date adjustments are permissible. Furthermore, Members must ensure that, in respectof both Client and Members’ house orders normally intended to be entered into LMEselect,
Members must not cross-up any such trades in their own systems before they are executed as
Agreed Trades in LMEselect.

Conduct of Business Rules
44.

Members are reminded that they may be subject to certain conduct of business rules, and otherregulatory obligations, pursuant to MiFID II and the rules and regulations of the FCA and otherrelevant regulators. The LME also reminds Members that from time to time regulators, including
but not limited to the FCA, issue notices, updates and guidance to the market, which the LME
expects its Members to review, consider and, where appropriate, implement into their policies,
procedures and systems.

45.

Members may also be subject to additional regulatory obligations in the jurisdictions in which
they are incorporated or otherwise operate. The extent to and way in which these obligations
may apply will depend on a range of factors including, amongst others, the nature of therelationship between the relevant Member and its Client, the Execution Venue in question, theterms of business between the Member and its Client, the Member’s regulatory status, and any
internal compliance policies and procedures to which the Member is subject.

8

46.

Compliance with all applicable rules and regulations is (where applicable) the sole responsibilityof the Member and Members must seek their own advice in this regard.

47.

Whilst by no means an exhaustive list, and of particular interest in the context of Client business,
the LME wishes to draw Members’ attention to the following:
Conflicts of interest – Members must take all appropriate steps to identify and to prevent ormanage conflicts of interest. This requires Members to actively identify circumstances in which
potential and actual conflicts of interest may arise, and to establish arrangements to prevent ormanage them effectively. Members should have regard to relevant regulatory requirements andguidance on conflicts of interest, including in relation to Payment for Order Flow or “PFOF”6.
PFOF is described as occurring when an investment firm (typically a broker who both sources
liquidity and executes orders for its client) receives a fee or commission from both the client thatoriginates the order and the counterparty the trade is then executed with (typically a market
maker or other liquidity provider). The LME is aware that some Members and authorised
representatives of Members do act as agents for their clients (for example, when a Member isacting purely in a broking capacity) and Members are therefore reminded of the requirement tocomply at all times with their regulatory obligations. In particular, where a Member is sourcing
exclusive liquidity (and executing orders) for a specific client, charging the counterparty to theclient’s transaction creates a conflict the firm cannot manage effectively and so should prevent(i.e. by ceasing to charge PFOF), regardless of the client’s categorisation. Even where a Member
is sourcing non-exclusive liquidity for eligible counterparties (as defined in the FCA COBS), a
conflict of interest is likely to arise and must, at a minimum, be subject to appropriate controls. It
is therefore important that firms correctly identify the nature of their activities, on a transactionby-transaction basis, to ensure the appropriate prevention or management of conflicts of interest
from charging both sides of transactions.
Fees and inducements – Members must disclose certain information to Clients in relation to
the services to be provided to them. This information includes, amongst other things, information
regarding all the costs and related charges that apply to the relevant service(s). In an LME
context, this is likely to include any commission or mark-up on LME fees that may be applied bya Member to the fees charged to their Client. Members are expected to periodically review theirpricing structures to ensure that when acting in an agency role for their Client, they are notinappropriately charging commission (or however otherwise characterised) to the counterparty
that their Client’s trade was executed with. Members should also not pay or accept any
inducement (i.e. payment and receipt of fees, commissions and non-monetary benefits) in
relation to an investment service unless it falls within a “safe harbour” (e.g. where a payment
received by the Member is paid to the Client).
Best execution – Members within the scope of the best execution rules are required to take all
sufficient steps to obtain the best possible result for their Clients when executing Client orders

6

See particular 2019 FCA guidance at https://www.fca.org.uk/publication/multi-firm-reviews/paymentfor-order-flow-pfof.pdf.

9

(or passing them on to other firms for execution). To the extent that firms follow specificinstructions from their clients relating to the order, the firm should satisfy its best execution
obligations. Members should be aware that in an LME context, the best execution obligation
may apply differently depending on whether a Member is acting in a proprietary capacity givinga Client a firm quote, or acting on an agency basis working an order for a Client. Members should
ensure that their Clients are aware of the capacity in which the Member is acting, and thus
understands the best execution rules that apply.
Client order handling – Members that execute orders on behalf of Clients must implement
procedures and arrangements to provide for the prompt, fair and expeditious execution of Client
orders relative to other orders or the trading interests of the Member. In accordance with MiFID
II and the FCA conduct of business requirements, Members must also satisfy certain conditions
when carrying out Client orders, and when carrying out a Client order or a transaction for theirown account in aggregation with another Client order.
Risk Management Systems and Controls to Detect, Deter and Deal with Potentially Abusive
Trading Activity
48.

Members are reminded, pursuant to their obligations under Regulation 12.6(b) of Part 2 of the
LME Rulebook, of the importance of having in place appropriate and adequate systems andcontrols to detect, deter and deal with trading activity that is indicative of market abuse7. Thissection is intended to give guidance as to how the LME would assess the adequacy of a
Member’s systems and controls during a Member audit or investigation. Members should note
disciplinary proceedings brought by the LME against Members for systems and controls failings,
resulting in financial penalties for the Members concerned.

49.

When undertaking an assessment into the adequacy of their systems and controls, the LME
considers it prudent for Members to produce a market abuse risk assessment in order to assess
the potential market abuse risks to which they are exposed. Failure to have produced a market
abuse risk assessment may constitute evidence of poor systems and controls.

50.

Members should also have regard to the following non-exhaustive list of factors when
considering their compliance with their obligations pursuant to Regulation 12.6(b) of Part 2 of
the LME Rulebook:a.

the extent to which the systems and controls (including but not limited to electronic
surveillance system(s)) are appropriately calibrated considering and taking into accountthe nature, size and complexity of the business that a Member conducts on the LME
market (whether such business is conducted by a Member, a Member’s Clients, or the7

For the avoidance of doubt, the obligations of a Member under Regulation 12.6(b) of Part 2 of the
LME Rulebook apply not only to the obligation to have in place appropriate and adequate risk
management systems in order to detect, deter and deal with trading activity that is indicative of market
abuse, but also to the obligation to have in place appropriate and adequate risk management systems
that enable a Member to comply with all of its obligations under the LME Rulebook.

10

underlying clients of a Member’s Clients). Members who choose to offer Direct Electronic
Access (“DEA”) to their Clients are reminded that they retain responsibility for the tradingof those Clients8. Such Members should consider putting in place policies and proceduresthat consider the suitability of DEA Clients in order to ensure that DEA Clients comply with
the LME Rulebook at all times;b.

the extent to which the Member has suitable arrangements to identify suspicious trading
activity and undertakes appropriate action when such activity is identified (such as, but
not limited to, investigating such activity in a timely manner);c.

the extent to which the Member has control over its surveillance activity and has
appropriate oversight of any outsourced arrangements;d.

the frequency with which assessments are performed into the adequacy of a Member’srisk management systems and controls;e.

the records that are maintained with regard to surveillance arrangements. This would
include, without limitation, records of how systems, such as surveillance systems, arecalibrated, and how decisions are made as to calibration amendments, as well as e.g.
records of risk assessments undertaken;f.

the policies, procedures and processes that are in place to detect, deter and deal withpotential instances of market abuse, including the frequency with which these policies,
procedures and processes are reviewed and updated where necessary and how they arecommunicated to relevant staff;g.

the extent to which staff are appropriately qualified to detect, deter and deal with potential
instances of market abuse;h.

the extent to which arrangements for staff involved in surveillance activities (e.g.
responsibilities, reporting lines etc.) are appropriate and ensure freedom from conflicts ofinterest;i.

the extent to which staff receive appropriate and regular training regarding, amongst otherthings, activity constituting market abuse, and an understanding of the obligations of a
Member under the EU Market Abuse Regulation;j.

the extent to which senior management have appropriate oversight of the surveillance
function, including but not limited to, undertaking quality assurance checks of the work

Regulation 12.9, Part 3 of the LME Rulebook states that: “LME Select Participants may offer orderrouting facilities (also known as direct electronic access under MiFID II) to a Client, but in such cases
the LME Select Participant retains responsibility for, and remains liable for, all trading activity
conducted by such Client, including all orders submitted and trades executed using the order-routing
facility.”811performed by surveillance staff in relation to the detection of potential instances of market
abuse, the availability of management information with regard to potential instances ofmarket abuse, and documented escalation procedures; andk.

the adequacy of pre-trade controls that are in place to assist in the prevention of disorderly
trading on the LME.

ORDER STYLES
51.

The principal order styles for Client orders are summarised below. These order styles do not
represent all possible methods of order execution on the LME. Members and Clients should
ensure that orders are communicated in meaningful terms that deliver the required execution inaccordance with LME Rules.

Ring
52.

Client orders are not traded in the Ring, so an order using the term “in/on the Ring or during the
Ring/kerb” will be executed on the basis of the prices traded/quoted in the Ring or during theparticular Ring or kerb session. If a Client requires their order to be “shown” or traded across the
Ring then they should make this requirement known to their executor, who may or may notaccept this as a term of the order. The equivalent Member-to-Member Agreed Trade for a Client
order might not replicate its terms. As the Client is not a party to any Cleared Contracts whicharise from Agreed Trades made in the Ring, in specifying Ring/kerb, the Client is merely
identifying a pricing mechanism. A Member which undertakes to match a price traded in the
Ring/kerb is not necessarily undertaking that it will trade during that Ring/kerb, only that it may
do so. However, a Client may place an order with the specific request that the Member concludes
an Agreed Trade in the Ring, replicating its order. In such circumstance, the Category 1 Member
can only trade this order by open outcry in the Ring.

53.

If a Client trades at the prevailing market quote proffered in the Ring/kerb, their executor is notnecessarily obliged to effect an Agreed Trade in the Ring at the same price. This can lead tosituations where the Client has traded at the prevailing market quote, without that same pricetrading in open outcry across the Ring. However, if the instructions from the Client are to achievea specific price i.e. close of Ring 2, then this is the price that should be given, if that specificorder is accepted.

54.

The timings for the acceptance of orders from a Client to a Member which are executed “on theclose” of the relevant Ring/Kerb should be agreed between the two parties. The timings may be
dependent on the nature of the order (for example large in size orders may have different timings
from smaller orders). However, the instructions should be clearly understood so there is no doubt
how and when the order may be executed by the Member. If an ‘on the close’ order is not placedin sufficient time before the close of the relevant Ring/Kerb, the Member may reserve the rightto decline acceptance of any such order.

Market12

55.

In normal circumstances a market order is one executed on a timely basis at the prevailingmarket price. As mentioned above, at certain times of the business day, trading is taking place
simultaneously in the Ring or kerb, on LMEselect, and in the inter-office market. Traditionally,
when open outcry trading is in session, the market tends to be led by activity within the Ring/kerb.
At other times, the market is split between inter-office trading and trading on LMEselect. During
LMEselect trading periods, firm prices are available on LMEselect and the LMEselect page on
information vendors’ systems. Members should ensure they consider their best execution
obligations as defined by prevailing regulations when executing an “at market” order on behalfof a Client.

Best
56.

“At best” orders may be executed on any of the Ring, inter-office market and on LMEselect.
Inter-office trades rely upon the Members’ skill in determining the level of the market at any
particular time. Best orders received during Ring/kerb times may not result in the Client receiving
the “best” price achieved during the session if the price improves after the Member has filled theClient order. At any given time, the best price on LMEselect will be displayed on the system andby the market data vendors. Clients should be aware that depending on market conditions, thebest price may move during the period from when the order was placed and when it was
executed. Members should ensure they consider their best execution obligations as defined byprevailing regulations when executing an at best order on behalf of a Client.

Close
57.

Most orders placed “on the close”, or “market on close” (“MOC”) are for either the close of thesecond Ring (i.e. the Official Price) or the final kerb (i.e. the Closing Price). Both of these prices
are published. Closing prices for other sessions are harder to determine, although the LME does
publish the Unofficial Closing Prices which are established at the close of the third Ring. In all
circumstances, Clients and Members need to agree the style of execution i.e. bid/offer, mean ortraded price. Members may not always be able to guarantee execution (price or volume) due toprevailing market conditions.

Open
58.

Clients placing orders to trade on the opening of a market session must provide clear instructions
to the Member which indicate how this order should be activated i.e. basis the opening bid/offer
or basis the first trade in the session. Clients will also need to inform their executor of theirrequirements if the executor is unable to fill the order basis the opening price in its entirety, due
to market constraints such as insufficient liquidity. Clients may place orders with Members for
LMEselect that can be placed into the system for activation when the market opens.

Resting Orders
59.

When placing resting orders such as “good ‘til cancelled” (“GTC”, or any derivations thereof) or
stop loss orders, Clients should ensure that they are in agreement with their executor’s definitionof the trigger point of the order. Usually, this is interpreted as being the point when the order13

price is seen to be trading in the market, but it is possible to request the order be activated when
the order level is either bid or offered as appropriate, via the prevailing market quote.
60.

It is possible for a Client not to receive a fill on a resting order despite the order price trading in
the market. This could be due to a number of circumstances such as order priority etc. Whatever
the reason, the executor should be able to provide the Client with a full explanation of why it was
unable to fill the order.

61.

Clients should be aware that resting orders might be activated during periods of illiquidity in themarket. As previously mentioned, this could result in the trade not being filled, or for “stop”
orders, a worse fill than anticipated (known as “slippage”). Clients should ensure the executor isfully aware of their requirements regarding the execution of an order, and adheres to any
limitations, especially if the Client is not in contact with the market / Member when the trigger
point is reached.

LMEselect
62.

It is possible for Clients to route orders to LMEselect, or to ask Members to place resting orders
in LMEselect, on their behalf. LMEselect has multiple available order types and validity
conditions, including but not limited to: GTC (for Cash and 3 month prompt dates only), “Goodfor day”, “Iceberg”9, “Scaling”10 and “Fill or Kill” orders11. Further information on available ordertypes, their characteristics and any restrictions on their use, is set out in the LMEselect User
Guide, the current version of which is available on the LME website. Members are encouraged
to read the LMEselect User Guide carefully to ensure compliance with any restrictions12.

SEGREGATION & PORTABILITY
Segregation
63.

When registering Agreed Trades in the Matching System, a Clearing Member must specify towhich account at the Clearing House the resulting Cleared Contracts should be allocated. Where

9

Iceberg orders allow a trader to place an order without disclosing the full order quantity to the market.
The trader specifies the open quantity amount seen by the market and the subsequent open orderamounts at the time of the order placement. Any subsequent amendments to open quantity amount
only take affect with the next order quantity to be placed; the current open quantity seen by the market
does not change.
10
A scaling order allows the user to automatically place repeat orders for an outright valid prompt datewith a scaled order price. i.e. scaled down buying or scaled up selling; although the user is not forced
to change the order price and therefore can enter repeat order at the same price level. This function
will place an order with the same quantity and prompt date with an adjusted order price if desired, oncethe previous order has traded in the LMEselect system.
11
A Fill and Kill Order is entered at a specific price with the intention to execute immediately andtherefore fill all or part of, the order and immediately cancel any unfulfilled balance.
12
By way of example, whilst it is technologically possible for Members to submit discretionary orders
in relation to LME Contracts, use of this order type (whether submitted via the LMEselect trading GUI,for example, or via any third party software application that utilises native LMEselect functionality forthe discretionary order type) was prohibited by LME Notice 20/283. Similarly, Notice 20/283 also
prohibits the use of native iceberg functionality in relation to Cash-Settled Futures Contracts.

14

any Cleared Contract is to be allocated to a client account (because the trade has been executedfor a Client) the registration must align the Contract to a specific omnibus (which may be net or
gross for Direct Clients or net for Indirect Clients) or individually segregated account at LME
Clear. Members are required to offer Clients a choice of accounts. The distinguishing factor
between the two is: either (i) an omnibus account which has assets and positions allocated to it
for multiple Clients, or multiple Clients with Indirect Clients; or (ii) an individually segregatedaccount which has assets and positions allocated to it for a single Client, or a single Client with
Indirect Client/s. Clearing Members, Clients and Indirect Clients wishing to know more about
segregation options may review LME Clear’s EMIR Article 39(7) disclosure on the LME Clear
website.
Portability
64.

Where LME Clear has declared an Event of Default in relation to a Clearing Member and a Client
wishes to transfer its positions from an account maintained with the defaulting Clearing Member
to another Clearing Member, it must notify13 LME Clear in accordance with the procedures set
out by LME Clear from time to time. LME Clear will effect the transfer of positions and, where
possible, assets subject to and in accordance with the LME Clear Rules14. Where the Client fails
to submit its request in accordance with the LME Clear procedures or porting is not possible inaccordance with the LME Clear Rules, the positions in the relevant account may be closed out
by LME Clear and assets in the account used to offset any losses in the account. Members,
Clients and Indirect Clients wishing to know more about default porting may review LME Clear’s
Article 39(7) disclosure on the LME Clear website.

13

It is not possible to accept such notifications from Indirect Clients, and the request must always be
made by the Client.
14
The LME Rules contain provisions to ensure that, where any Cleared Contract is ported inaccordance with LME Clear Rules, the back-to-back Client Contracts shall also port.

15

Information Statement in accordance with Article 15 of the Securities Financing
Transactions Regulation

This Information Statement is provided for information purposes only and does not amend or supersede theexpress terms of any Transaction, Collateral Arrangement or any rights or obligations you may have underapplicable law, create any rights or obligations, or otherwise affect your or our liabilities and obligations.
The Information Statement with Appendices 1 and 2 has been prepared by the International Swaps andDerivatives Association, Inc., the Association for Financial Markets in Europe, the Futures Industry
Association, Inc., the International Capital Market Association and the International Securities Lending
Association. Appendix 3 by the International Swaps and Derivatives Association, Inc., the Association for
Financial Markets in Europe, the Futures Industry Association, Inc. and SIFMA.
The information Statement with all its Appendices has been drafted in English language and can be used bymarket participants, who can amend it, including removing the trade association logos, as long as thefollowing copyright notice remains unchanged and is included in the final version used.
In case of translation of the Information Statement and its Appendices in other languages and in the event of
any inconsistencies between the English version and the translated version, the English version shall always
prevail and the International Swaps and Derivatives Association, Inc., the Association for Financial Markets
in Europe, the Futures Industry Association, Inc., the International Capital Market Association and theInternational Securities Lending Association and SIFMA do not accept any liability for any translation made.

-1Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

1. Introduction
You have received this Information Statement because you have entered into or may
hereafter enter into one or more title transfer collateral arrangements or security collateralarrangements containing a right of use (together, "Collateral Arrangements") with us.
This Information Statement has been prepared to comply with Article 15 of the Securities
Financing Transactions Regulation by informing you of the general risks and consequencesthat may be involved in consenting to a right of use of collateral provided under a security
collateral arrangement or of concluding a title transfer collateral arrangement ("Re-use Risks
and Consequences"). The information required to be provided to you pursuant to Article 15of the Securities Financing Transactions Regulation relates only to Re-use Risks andConsequences, and so this Information Statement does not address any other risks orconsequences that may arise as a result of your particular circumstances or as a result of theterms of particular Transactions.1
This Information Statement is not intended to be, and should not be relied upon as, legal,financial, tax, accounting or other advice. Unless otherwise expressly agreed in writing, weare not providing you with any such legal, financial, tax, accounting or other advice and you
should consult your own advisors for advice on consenting to a right of use of collateralprovided under a security collateral arrangement or on concluding a title transfer collateralarrangement, including the impact on your business and the requirements of, and results of,entering into any Transaction.
Appendix 2 sets out an indicative (but not exhaustive) list of types of agreement that may
constitute Collateral Arrangements.
Appendix 3 sets out alternative disclosures that are applicable if we are (1) a U.S. brokerdealer or futures commission merchant or (2) a U.S. bank or U.S. branch or agency office ofa non-U.S. bank.
In this Information Statement2:

1

Note: Firms that have given other disclosures in relation to Collateral Arrangements (e.g., under Art 39 EMIR)
may wish to cross-refer to those disclosures here.

2

Note: Defined terms will need to be modified where the disclosure statement is included as an annex to anagreement.

-2Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

"we", "our", "ours" and "us" refer to the provider of this Information Statement that
may conduct Transactions with you (or, where we are acting on behalf of anotherperson, including where that person is an affiliate, that person);"you", "your" and "yours" refer to each of the persons to which this Information
Statement is delivered or addressed in connection with entering into, continuing,
executing or agreeing upon the terms of Transactions with us (or, where you areacting on behalf of other persons, each of those persons);"right of use" means any right we have to use, in our own name and on our own
account or the account of another counterparty, financial instruments received by us
by way of collateral under a security collateral arrangement between you and us;"Securities Financing Transactions Regulation" means Regulation (EU) 2015/2365 of
the European Parliament and of the Council of 25 November 2015 on transparency of
securities financing transactions and of reuse and amending Regulation (EU) No
648/2012 (as amended from time to time);"Transaction" means a transaction entered into, executed or agreed between you andus under which you agree to provide financial instruments as collateral, either under asecurity collateral arrangement or under a title transfer collateral arrangement;

"financial instruments", "security collateral arrangement" and "title transfer collateralarrangement" have the meaning given to those terms in the Securities Financing
Transactions Regulation. These are set out in Appendix 1 for reference.

2. Re-use Risks and Consequencesa) Where you provide financial instruments to us under a title transfer collateralarrangement or if we exercise a right of use in relation to any financial instrumentsthat you have provided to us by way of collateral under a security collateralarrangement containing a right of use, we draw your attention to the following Reuse Risks and Consequences:3
i. your rights, including any proprietary rights that you may have had, in
those financial instruments will be replaced by an unsecured contractual
claim for delivery of equivalent financial instruments subject to the termsof the relevant Collateral Arrangement;
3

As noted above, Appendix 3 sets forth the risks and consequences that may arise in connection with re-use offinancial instruments by a U.S. broker-dealer, U.S. futures commission merchant, or U.S. bank or U.S.
branch or agency office of a non-U.S. bank.

-3Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

ii. those financial instruments will not be held by us in accordance with client
asset rules, and, if they had benefited from any client asset protection
rights, those protection rights will not apply (for example, the financial
instruments will not be segregated from our assets and will not be held
subject to a trust);
iii. in the event of our insolvency or default under the relevant agreement yourclaim against us for delivery of equivalent financial instruments will not be
secured and will be subject to the terms of the relevant Collateral
Arrangement and applicable law and, accordingly, you may not receive
such equivalent financial instruments or recover the full value of thefinancial instruments (although your exposure may be reduced to theextent that you have liabilities to us which can be set off or netted against
or discharged by reference to our obligation to deliver equivalent financial
instruments to you);iv. in the event that a resolution authority exercises its powers under any
relevant resolution regime in relation to us any rights you may have to takeany action against us, such as to terminate our agreement, may be subject
to a stay by the relevant resolution authority and:a) your claim for delivery of equivalent financial instruments may be
reduced (in part or in full) or converted into equity; orb) a transfer of assets or liabilities may result in your claim on us, or
our claim on you, being transferred to different entities
although you may be protected to the extent that the exercise of resolution
powers is restricted by the availability of set-off or netting rights;
v. as a result of your ceasing to have a proprietary interest in those financial
instruments you will not be entitled to exercise any voting, consent orsimilar rights attached to the financial instruments, and even if we haveagreed to exercise voting, consent or similar rights attached to any
equivalent financial instruments in accordance with your instructions or
the relevant Collateral Arrangement entitles you to notify us that theequivalent financial instruments to be delivered by us to you should reflect
your instructions with respect to the subject matter of such vote, consent or
exercise of rights, in the event that we do not hold and are not able toreadily obtain equivalent financial instruments, we may not be able tocomply (subject to any other solution that may have been agreed between
the parties);-4Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

vi. in the event that we are not able to readily obtain equivalent financial
instruments to deliver to you at the time required: you may be unable tofulfil your settlement obligations under a hedging or other transaction you
have entered into in relation to those financial instruments; a counterparty,
exchange or other person may exercise a right to buy-in the relevant
financial instruments; and you may be unable to exercise rights or takeother action in relation to those financial instruments;
vii. subject to any express agreement between you and us, we will have no
obligation to inform you of any corporate events or actions in relation to
those financial instruments;
viii. you will not be entitled to receive any dividends, coupon or otherpayments, interests or rights (including securities or property accruing oroffered at any time) payable in relation to those financial instruments,
although the express written terms of the relevant Collateral Arrangement
or Transaction may provide for you to receive or be credited with apayment by reference to such dividend, coupon or other payment (a"manufactured payment");
ix. the provision of title transfer collateral to us, our exercise of a right of use
in respect of any financial collateral provided to us by you and the delivery
by us to you of equivalent financial instruments may give rise to tax
consequences that differ from the tax consequences that would haveotherwise applied in relation to the holding by you or by us for youraccount of those financial instruments;
x. where you receive or are credited with a manufactured payment, your tax
treatment may differ from your tax treatment in respect of the original
dividend, coupon or other payment in relation to those financial
instruments.
b. Where we provide you with clearing services (whether directly as a clearing
member or otherwise), we draw your attention to the following additional Re-use
Risks and Consequences4:
i. if we are declared to be in default by an EU central counterparty ("EUCCP") the EU CCP will try to transfer ("port") your transactions and4

Note: Firms which have provided separate disclosure on these risks (e.g., under Article 39 EMIR) may wish to
cross refer to that disclosure or indicate where that disclosure can be found.

-5Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

assets to another clearing broker or, if this cannot be achieved, the EU
CCP will terminate your transactions;ii. in the event that other parties in the clearing structure default (e.g., acentral counterparty, a custodian, settlement agent or any clearing broker
that we may instruct) you may not receive all of your assets back and yourrights may differ depending on the law of the country in which the party isincorporated (which may not necessarily be English law) and the specificprotections that that party has put in place;iii. in some cases a central counterparty may benefit from legislation which
protects actions it may take under its default rules in relation to adefaulting clearing member (e.g., to port transactions and related assets)from being challenged under relevant insolvency law.

-6Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

Appendix 1
Defined terms for the purposes of the Securities Financing Transactions Regulation:"financial instrument" means the instruments set out in Section C of Annex I to Directive
2014/65/EU on markets in financial instruments, and includes without limitation:
1) Transferable securities;2) Money-market instruments;
3) Units in collective investment undertakings.
"title transfer collateral arrangement" means an arrangement, including repurchaseagreements, under which a collateral provider transfers full ownership of financial collateral
to a collateral taker for the purpose of securing or otherwise covering the performance of
relevant financial obligations.
"security collateral arrangement" means an arrangement under which a collateral provider
provides financial collateral by way of security in favour of, or to, a collateral taker, andwhere the full ownership of the financial collateral remains with the collateral provider when
the security right is established.

-7Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

Appendix 2
We have set out below examples of the types of agreements to which this Information
Statement applies. These examples are for illustrative purposes only and should not be relied
upon as a legal determination of the characterisation of each agreement. The fact that anagreement is grouped with Title Transfer Collateral Agreements below does not preclude its
characterisation as a Security Collateral Arrangement with a right of use and vice versa.
Moreover, the characterization of an agreement may be different under U.S. and European
law.
Title Transfer Collateral Arrangement

Such arrangements may include without limitation:Overseas Securities Lender's Agreement

Global Master Securities Lending Agreement

Global Master Repurchase Agreement



SIFMA Master Repurchase Agreement

An ISDA Master Agreement incorporating an English Law ISDA Credit Support
Annex



An ISDA/FIA Client Cleared OTC Derivatives Addendum which provides for title
transfer collateral arrangements and in particular where entered into in connection
with an English law governed ISDA Master Agreement which includes the English
law CSA Collateral Terms as set out in Appendix 1 thereto, or when entered into inconnection with a relevant FIA client clearing agreement



Master Gilt Edged Stock Lending Agreement



Master Equity and Fixed Interest Stock Lending Agreement

Prime brokerage agreements which provide for title transfer collateral arrangements

FIA client clearing agreements for exchange traded and other cleared derivatives
which provide for title transfer collateral arrangements



FIA Clearing Module which provides for title transfer collateral arrangementsAny bespoke agreements granting security by way of transfer of title to the secured
party

Security Collateral Arrangement containing a right of use-8Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

Such arrangements may include without limitation:
An ISDA Master Agreement incorporating a New York Law ISDA Credit Support
Annex



An ISDA/FIA Client Cleared OTC Derivatives Addendum which provides forsecurity collateral arrangements and in particular where entered into in connection a
New York law governed ISDA Master Agreement including the New York law CSA
Collateral Terms as set out in Appendix 2 thereto, or when entered into in connection
with a relevant FIA client clearing agreement

An ISDA Master Agreement in respect of which an English Law ISDA Credit
Support Deed incorporating a right of use is a credit support document

Prime brokerage agreements which provide for the creation of security over financial
instruments

FIA client clearing agreements for exchange traded and other cleared derivatives
which provide for a creation of security over financial instruments



FIA Clearing Module which provides for a creation of security over financial
instruments

Security arrangements in relation to margin loan documentation and associatedcustody agreements



SIFMA Master Securities Lending Agreement (this agreement is generally a security
collateral arrangement with respect to collateral delivered to the lender; the borrower
takes title to the borrowed securities)

Any bespoke security agreements creating security in respect of financial instrumentswith rehypothecation rights or a right of use over the financial instruments in favourof the secured party-9Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

Appendix 3
U.S. BROKER-DEALER, U.S. FUTURES COMMISSION MERCHANT,
or U.S. BANK:This Appendix describes the Re-use Risks and Consequences that may arise under Collateral
Arrangements with a bank chartered under U.S. federal or state law, a U.S. branch or agency
office of a non-U.S. bank (any such bank, branch, or agency office, a “U.S. banking
organization”), a U.S. entity that is registered as a broker-dealer with the U.S. Securities andExchange Commission (“broker-dealer”), or a U.S. entity that is registered as a futurescommission merchant with the Commodity Futures Trading Commission (“FCM”). A single
U.S. entity can operate, and be regulated, as both a broker-dealer and an FCM, but it remains
subject to separate regulatory requirements with respect to its separate activities.
U.S. law draws a distinction between financial instruments delivered to a broker-dealer or
FCM and treated as customer assets (“Customer Assets”), financial instruments held by a
U.S. banking organization in a trust or custodial capacity (“Custodial Assets”), and financial
instruments delivered or pledged to a U.S. banking organization, broker-dealer, or FCM in a
principal (non-customer) capacity (“Non-Customer Assets”). Customer Assets held by abroker-dealer or FCM are subject to mandatory segregation requirements under the rules of
the SEC and CFTC, respectively, and special-purpose insolvency regimes under which
segregated assets, i.e., Customer Assets and cash required to be held in segregated accounts,
are distributed to customers. Custodial Assets held by a U.S. banking organization are
generally segregated on an account- or customer-specific basis, while in some circumstances
broker-dealers and FCMs are permitted to segregate Customer Assets on an omnibus basis
for all customers.
Financial instruments held in a securities account at a broker-dealer or delivered to an FCM
as margin (or “performance bond”) for a cleared derivative generally constitute Customer
Assets. On the other hand, securities delivered to us under a repurchase or securities lending
agreement generally do not constitute Customer Assets. If, with respect to Customer Assets
received by us as a broker-dealer, you separately agree to lend financial instruments to us
under a securities lending agreement, or agree to sell financial instruments to us under arepurchase agreement, then the financial instruments are removed from your account and are
no longer eligible for customer protection. Any financial instruments delivered to us undersuch transactions are Non-Customer Assets. If you are uncertain whether a financial
instrument pledged or delivered to us is a Customer Asset, please obtain legal advice.
With respect to Customer Assets received by us as an FCM in connection with your CFTCregulated transactions, we generally cannot use such Customer Assets other than to margin,
guarantee or secure those transactions. That is, we may transfer such assets to segregated or
secured accounts established by us with banks, clearing houses and clearing brokers, which- 10 Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

acknowledge, via rules or written agreements, that such Customer Assets are the property of
the FCM’s customers and can be utilized solely to margin, guarantee or secure customertransactions. In addition, an FCM may, pursuant to repurchase agreements, substitute suchsegregated Customer Assets, subject to very strict CFTC regulations, including therequirement that such substitution is made on a “delivery versus delivery” basis, and themarket value of the substituted securities is at least equal to that of the Customer Assets being
substituted. To the extent segregated assets were found to be insufficient to satisfy customer
claims in full, customers would continue to have a claim against the proprietary assets of the
FCM.
With respect to Customer Assets received by us as a broker-dealer in connection with yourSEC-regulated transactions, we generally can use such Customer Assets only with yourconsent and subject to regulatory usage limits that are imposed both at the account level (byreference to the amount of your obligations to us) and across all customers (by reference tothe amount of all customer obligations to us). The SEC requires that broker-dealers perform adaily valuation of Customer Assets (including related customer obligations) and maintain insegregation either Customer Assets or cash or other high-grade assets such that the value ofsegregated assets will at all times exceed the value of all Customer Assets net of customer
obligations to the broker-dealer. Further, to the extent segregated assets were to be
insufficient to satisfy customer claims in full, customers would continue to have a claim
against the proprietary assets of the broker-dealer.
Notwithstanding point (b) of paragraph 2 of Article 15 of the Securities Financing
Transactions Regulation, when we use your Customer Assets, they continue to be included onyour account statement reflecting their status as Customer Assets, and we may not identify to
you the financial instruments that we have used.
If we are a broker-dealer or FCM, our exercise of our right to use Customer Assets has noeffect on the nature of your property interest in the financial instruments or on your rights asa customer in the event of our insolvency. The amount of your customer claim in a brokerdealer or FCM insolvency proceeding is a function of the value of assets held in your accountand the amount of your obligations to us, if any. In a broker-dealer or FCM insolvency
proceeding, all customers generally receive the same pro rata share of their claims based on
Customer Assets (and customer cash), regardless of whether their financial instruments were
subject to use or were used by the broker-dealer or FCM. (In the case of an FCM insolvency,
customers are separated into several account classes based on product type, and recoveries
may vary across account classes. Customers within the same account class receive the samepro rata share of all customer claims within that class.)
In the insolvency of a U.S. banking organization, Custodial Assets are generally returned totheir owners to the extent such assets are available for distribution. Your consent to our use of- 11 Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

your financial instruments may prevent them from being treated as Custodial Assets, and it
may jeopardize your right to obtain their return in the event of our insolvency.
Collateral Arrangements with respect to Non-Customer Assets can take a variety of forms
with differing legal characterizations and practical consequences. Generally, a title transfer
collateral arrangement entitles you only to a creditor claim for the return of your financial
instruments. Under a security collateral arrangement, in some cases you may retain a property
interest in the financial instruments delivered to us as collateral, but your property right (ifany) may be subject to superior rights of our creditors or of a party to which we havetransferred the financial instruments. Additionally, in the event of our insolvency, you may
lose your property interest if you are unable to identify your property as distinct from ourother assets, and our use of your financial instruments may impair your ability to do so.
This Appendix is not intended to provide a complete description of the treatment of Collateral
Arrangements under U.S. law or the U.S. customer protection system, and you should not
rely on it for that purpose.
If we are a U.S. broker-dealer, U.S. FCM, or U.S. banking organization, Sections 2(a)(i)through (v) of the Information Statement do not apply. Instead, where you provide financial
instruments to us under a title transfer collateral arrangement or if we exercise a right of use
in relation to any financial instruments that you have provided to us by way of collateral
under a security collateral arrangement containing a right of use, we draw your attention to
the following Re-use Risks and Consequences:
Risks in Connection with Financial Instruments That Are Customer Assets
If we are a U.S. broker-dealer or FCM and your financial instruments are Customer Assets,then we are permitted to use your financial instruments (i) to post as margin in respect of
CFTC-regulated products with a clearing organization or other intermediary, and (ii) as
otherwise permitted within the limits imposed by U.S. customer protection rules. When weuse your Customer Assets, we may not hold them in segregation or trust, depending on theapplicable U.S. regulation, but we continue to report them on your account statement
reflecting their status as Customer Assets. As a result of our use of your Customer Assets,
those assets are subject to the Re-use Risks and Consequences listed in Sections 2(a)(vi)
through (x) of the Information Statement. In addition, if we provide you with clearing
services (whether directly as a clearing member or otherwise), Customer Assets are subject to
the Re-use Risks and Consequences listed in Section 2(b) of the Information Statement.
Moreover, as a result of our use of those financial instruments (including, in some cases, yourceasing to have a proprietary interest in those financial instruments), or the failure of a third
party to deliver to us financial instruments, you may not be entitled to exercise any voting,consent or similar rights attached to the financial instruments, and even if we have agreed to- 12 Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

exercise voting, consent or similar rights attached to any equivalent financial instruments inaccordance with your instructions or the relevant Collateral Arrangement entitles you tonotify us that the equivalent financial instruments to be delivered by us to you should reflect
your instructions with respect to the subject matter of such vote, consent or exercise of rights,
in the event that we do not hold and are not able to readily obtain equivalent financial
instruments, we may not be able to comply (subject to any other solution that may have been
agreed between the parties).
However, our right to use Customer Assets and our actual use of Customer Assets do notpresent any insolvency-related Re-use Risks and Consequences. This is because, as describedabove, in the event of our insolvency your claim for Customer Assets would be calculated
according to a formula that does not take our use of assets into account.
In the event that a receiver, conservator or other insolvency official exercises its powers
under an insolvency regime in relation to us, any rights you may have to take any action
against us, such as to terminate our agreement, may be subject to a stay by the relevant
authority and a transfer of assets or liabilities may result in your claim on us, or our claim onyou, being transferred to different entities. However, this risk exists regardless of whether wehave used your financial instruments or you have consented to their use.
Risks in Connection with Financial Instruments That Are Non-Customer Assets
Non-Customer Assets are not protected by the U.S. customer protection rules that apply to
Customer Assets. If we are a U.S. broker-dealer or FCM and your financial instruments are
Non-Customer Assets, or we are a U.S. banking organization, and you have granted us a rightto use your financial instruments, then we will not hold such financial instruments insegregation or trust. Your rights, including any proprietary rights that you may have had, in
those financial instruments may be replaced by a contractual claim (which would be
unsecured unless otherwise agreed) for the delivery of equivalent financial instruments
subject to the terms of the relevant Collateral Arrangement. As a result of our use of yourNon-Customer Assets, those assets are subject to the Re-use Risks and Consequences listed
in Sections 2(a)(vi) through (x) of the Information Statement.
If we are a U.S. banking organization, as a result of your consent to our use of your financial
instruments, those financial instruments may not be held by us in accordance with the rulesthat apply to Custodial Assets, and, if they had benefited from any protections as Custodial
Assets, those protection rights may not apply (for example, the financial instruments will not
be segregated from our assets and will not be held subject to a trust).
Moreover, as a result of our use of financial instruments (including, in some cases, yourceasing to have a proprietary interest in those financial instruments), or the failure of a third
party to deliver to us financial instruments, you may not be entitled to exercise any voting,- 13 Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.

consent or similar rights attached to the financial instruments, and even if we have agreed toexercise voting, consent or similar rights attached to any equivalent financial instruments inaccordance with your instructions or the relevant Collateral Arrangement entitles you tonotify us that the equivalent financial instruments to be delivered by us to you should reflect
your instructions with respect to the subject matter of such vote, consent or exercise of rights,
in the event that we do not hold and are not able to readily obtain equivalent financial
instruments, we may not be able to comply (subject to any other solution that may have been
agreed between the parties).
In the event of our insolvency your rights in financial instruments that we have used may bereplaced by a general claim (which would be unsecured unless otherwise agreed) against us
for equivalent financial instruments or the value of those financial instruments, and you may
not receive such equivalent financial instruments or recover the full value of the financial
instruments (although your exposure may be reduced to the extent that we have provided
collateral to you or you have liabilities to us which can be set off or netted against ordischarged by reference to our obligation to deliver equivalent financial instruments to you).
To the extent you retain a property interest in financial assets we have used, our use of thefinancial instruments may give other parties superior rights in them and may interfere withyour ability to identify the financial instruments for the purpose of obtaining their return.
In the event that a receiver, conservator or other insolvency official exercises its powers
under an insolvency regime in relation to us, any rights you may have to take any action
against us, such as to terminate our agreement, may be subject to a stay by the relevant
authority and a transfer of assets or liabilities may result in your claim on us, or our claim onyou, being transferred to different entities. However, this risk exists regardless of whether wehave used your financial instruments or you have consented to their use.

- 14 Copyright © 2016 by the International Swaps and Derivatives Association, Inc., the Association for Financial Markets in Europe,
the Futures Industry Association, Inc., the International Capital Market Association, the International Securities Lending
Association and SIFMA. Neither the International Swaps and Derivatives Association, Inc., the Association for Financial
Markets in Europe, the Futures Industry Association, Inc., the International Capital Market Association and the International
Securities Lending Association nor SIFMA, has reviewed or endorsed any modifications that may have been made to thisdocument.