CLSA Australia Pty Ltd
Best Execution obligation Disclosure1

Best Execution obligation Disclosure

Contents
1. PURPOSE ............................................................................................................................................................... 31.1.
BACKGROUND ................................................................................................................................................... 3
1.2.
SCOPE ............................................................................................................................................................... 3
2. ACHIEVING BEST EXECUTION ................................................................................................................................ 3
2.1.
EXECUTION METHODS ....................................................................................................................................... 3
2.2.
SPECIFIC INSTRUCTIONS .................................................................................................................................... 42.3
FACTORS TO BE CONSIDERED IN DELIVERING BEST EXECUTION ......................................................................... 4
3. EXECUTION VENUES............................................................................................................................................... 5
3.1.
PRE-TRADE TRANSPARENT ORDER BOOKS AND MARKET OPERATORS’ CROSSING SYSTEMS (MANDATORYVENUES) .......................................................................................................................................................................... 53.2.
CLSA’S CROSSING SYSTEM (MANDATORY VENUE)........................................................................................... 53.3.
EXTERNAL BROKERS’ OR THIRD PARTY CROSSING SYSTEMS (OPTIONAL VENUES) .......................................... 53.4.
STANDING WHOLESALE CLIENT INSTRUCTIONS TO OPT OUT OF CLSA’S BEST EXECUTION PROTECTION ........ 54. OUTAGES ............................................................................................................................................................... 55. RESPONSIBILITIES OF EXECUTION STAFF ................................................................................................................ 66. CONTROLS AND MONITORING ............................................................................................................................... 62May 2023

Best Execution obligation Disclosure

1. Purpose
1.1. Background
This document sets out information about CLSA Australia Pty Ltd’s (“CLSA”) ‘Best Execution’arrangements as required by Part 3.8 of the ASIC Market Integrity Rules (Securities Markets) 2017 (the“Rules”), which requires CLSA to take all reasonable steps to obtain the best outcome for its clients.
CLSA is authorised to transact on behalf of Wholesale clients only.
This document covers the requirements of Part 3.8 of the Rules and associated guidance set out in ASIC
Regulatory Guide 265.
1.2. Scope
The scope of this disclosure is to outline the arrangements CLSA relies on to deliver the best outcomefor its Wholesale clients when handling and executing an Order for the client. CLSA is a Trading
participant of ASX Limited (“ASX”) and Cboe Australia Pty Ltd (“Cboe”).
2. Achieving Best Execution
CLSA’s policies and processes are designed to obtain the best outcome for each client on a consistentbasis, taking into account the obtainable prices, costs, Total Consideration, speed, likelihood of execution
and other relevant outcomes sought by a client.
2.1. Execution methods
CLSA will take all reasonable steps to achieve the best outcome for its client orders through each of thefollowing execution methods:
High Touch – traditional Limit or Market Orders being managed by a CLSA Designated Trading
Representative (“DTR”) who will use their expertise and discretion in achieving the best outcome inaccordance with the client’s order instructions, taking into account one or a combination of factors
set out in Part 2.3 of this document.

Low Touch or Direct Market Access (“DMA”) – as part of the DMA suite offered by CLSA, clients are
given optionality to execute via selected trading strategies across a number of trading venues, as setout in Part 3 of this document.

Smart Order Router (“SOR”) - CLSA’s SOR forms a key part of its algorithmic solutions suite. The
purpose of the SOR (in both high touch and low touch scenarios) is to automatically scan theapplicable execution venues for liquidity with the objective of achieving the best execution outcomefor CLSA’s clients.

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Best Execution obligation Disclosure

2.2. Specific instructions
When a client provides CLSA with a specific Order instruction that is inconsistent with CLSA obtaining
the best outcome for the client, CLSA will take reasonable steps to handle and execute that Order inaccordance with the client’s instructions and as a result, may not be consistent with the best execution
outcome arrangements that are in place. For example, if a client instructs CLSA to execute an Order
immediately on a specific lit market, when a better price may be available in the other lit market (orpotentially in a Crossing System). In this situation, where speed and likelihood of execution become theprimary considerations (and there is no material detriment to the client from acting in accordance withthe client’s instructions) CLSA will proceed accordingly.
2.3 Factors to be considered in delivering best execution
Generally, CLSA will consider price as the most important execution factor for its clients. However, there
may be circumstances where other execution considerations and factors are as important as the price(of each specific trade). For example, the primary consideration could be that the overall Total
Consideration achieved throughout the day is at or better than the volume-weighted average price(rather than necessarily best price at the time of each trade).
CLSA may also consider the following factors when determining the best outcome for the client:Price – Price is an important factor in achieving best execution outcome. However, price at any given
point in time may not necessarily deliver the best outcome. For example, the order book of theexchange that is displaying the best price may not have adequate volume or liquidity (to satisfy theclient’s order).

Price Improvement - the availability of price improvement on CLSA’s Crossing System (andpotentially other Crossing Systems) provides the opportunity for an order to execute at a better pricethan displayed on the ‘Pre- trade transparent’ Order Books. Please refer to part 3.2.

Costs – this includes implicit costs such as the possible market impact; explicit external costs such asconnection or transaction fees, venue or clearing fees. The overall Total Consideration achieved may
also be an important factor for many clients.

Speed – speed of execution is increasingly becoming an important execution factor for certainclients. In circumstances where a client instructs CLSA where it needs to transmit orders quickly oris concerned that price may move adversely, it will factor speed into the best outcome equation.

Execution certainty – the likelihood that CLSA will be able to complete a client transaction. A client
may prefer execution on the ‘Pre-trade transparent’ Order Books, where liquidity and volumes at
each price level are visible, rather than accessing Crossing Systems (and forsaking any opportunity
to obtain any opportunity for price improvement).
Other factors – In addition to the above, CLSA may also consider, among other things, the following:

the nature of the clients orders and their specific instructions;the time of receipt of the order;
the size of the order;
market liquidity, volatility and the impact the order might have in the market;
other reasonable, relevant factors.

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Best Execution obligation Disclosure

3. Execution venues
3.1. Pre-trade transparent Order Books and Market Operators’ Crossing Systems (Mandatoryvenues)
The trading venues CLSA accesses to achieve the best outcomes for its clients are:

ASX Trade Match (lit) and ASX Centre Point (dark), andCboe (lit) and Hidden (dark)

3.2. CLSA’s Crossing System (Mandatory venue)CLSA’s Crossing System - CLSA’s ASIC registered crossing system offers an additional source of hidden
liquidity for its clients. Orders executed on this venue will be given price improvement whencompared against the consolidated best bid and offer prices displayed on ASX and Cboe at the timeof execution.

The combination of the pre-trade transparent and the Crossing System/darkpool venues specified under
3.1 and 3.2 above, collectively, comprise the Mandatory, default venues offered as CLSA’s Best execution
protection (where the pre-trade transparent venues offer price and volume transparency and certainty,
and the darkpool venues offer potential price improvement with hidden liquidity).
3.3. External Brokers’ or Third Party Crossing Systems (Optional venues)
CLSA will offer access to other ASIC registered Crossing Systems operated by external Market Participants
as set out in CLSA’s Crossing System Information – Public disclosure.
3.4. Standing Wholesale Client Instructions to Opt Out of CLSA’s Best execution protection
CLSA’s clients will decide which execution venues they access and participate in.
If a client wishes to Opt-out of a Mandatory venue comprising CLSA’s Best execution protection, byproviding “Opt out” instructions to CLSA, CLSA will not connect to that Mandatory venue that has been
opted out in accordance with the client’s “Standing Instructions”.
Each Standing Instruction arrangement will be:(a) periodically reviewed to ensure it remains possible for CLSA to satisfactorily perform the instruction;and(b) acted on for a period of 12 months, before revision or renewal with that client.
The Standing Instruction records must be retained for 7 years.

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Best Execution obligation Disclosure

4. Outages
In the event of an ASX or Cboe Market Outage, CLSA is technically and operationally positioned toautomatically route client orders to the venue which remains operational, providing this would be inaccordance with each client’s execution instructions.
Whilst typically, CLSA will automatically route orders in an outage situation, there may be instanceswhere CLSA will be required to manually intervene, such as when ASX or Cboe is technically unable toreject or acknowledge order cancellations or, if market data is inaccurately reflecting the ‘state’ of theproblematic venue.

5. Responsibilities of execution staff
Sales and Trading Representatives form an important first line of defence in the trade execution
process. Reasonable diligence will be exercised when executing client instructions, monitoring
execution outcomes and, where applicable, taking steps to obtain multiple quotes. In the absence ofmultiple quotes, execution staff should obtain sufficient pricing information on a best-effort basis tovalidate quotes provided to clients.

6. Controls and monitoring
CLSA monitors the effectiveness of its best execution arrangements on a regular ongoing basis; thisincludes assessment of whether the execution venues CLSA has selected continue to provide the bestsolutions and results for orders executed on behalf of its clients.
CLSA continuously monitors its best execution arrangements utilising various analytical tools and reports
to ensure it can continually assess and achieve the best execution quality and performance for its clients.

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