CLSA EUROPE BVORDER EXECUTION and ORDER HANDLING POLICY
1

General Information about this Policy

1.1

Background
CLSA Europe BV (“CLSA”) provides general broker dealer and other ancillary
services to clients in the European Economic Area (EEA). CLSA is subject to therequirements of the rules as set out in the Markets in Financial Instruments
Directive 2014/65/EU ("MiFID II" and/or “Rules”).
CLSA executes orders in relation to financial instruments on behalf of its clients.
There are two methods that the Company can use to execute orders:(A)

CLSA can place an order as agent with a third party (e.g., another broker orinvestment bank) and/or any of its affiliates for that third party or affiliate
to execute on behalf of the client. Such entities are referred to in this policy
as “Brokers”.

(B)

CLSA can execute the relevant transaction directly on a venue (“Execution
Venue”). In accordance with the Rules, an Execution Venue can include an
EEA regulated market, or other exchange, a multilateral trading facility,
organised trading facility, a systematic internaliser, a market maker or otherliquidity provider or non-EEA entity performing similar functions to the
Execution Venues listed above.

CLSA will execute orders on behalf of its clients on the Execution Venues or via its
Brokers by dealing as agent for its clients.
1.2

CLSA’s Core Best Execution Obligations
In accordance with the Rules, CLSA is required to take all reasonable measures toachieve reasonable measures to achieve the best possible result for its clients when
executing orders for its clients (i.e., to obtain best execution). NB the obligation totake all reasonable measures to achieve reasonable measures to achieve the best
possible result for clients does not apply to counterparties classified by CLSA as“eligible counterparties” for the purposes of the AFM Rules (except where CLSA
has agreed with an eligible counterparty that it will take all reasonable measuresto achieve the best possible result). In relation to its dealings with eligible
counterparties, however, CLSA will strive to act in such clients’ best interests andwill take reasonable steps to prevent or manage any conflicts of interest that it may
have in accordance with its obligations under the AFM Rules.

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In seeking to obtain best execution, CLSA is required:(A)

to take all reasonable measures to achieve the best possible result for its
clients, taking into account certain "execution factors" - price; costs;
speed; likelihood of execution and settlement; size of the transaction;
nature of the transaction; or any other consideration relevant to execution.
Under CLSA's policy, such other considerations can include (without
limitation) the overall cost of the transaction (including any commissions
received by CLSA and/or its affiliates or any costs for executing the orderon an execution venue); timely execution availability of price improvement;
the potential impact of the transaction on price; importance of retaining
commercial confidentiality in relation to trading activities or intentions;liquidity of the market (which may make it difficult to execute an order);order information leakage; trading conflict; market conduct; market impact;
venue liquidity and counterparty risk.

The relative importance of these factors shall be determined by reference to the"execution factors" being:

(B)

(1)

the characteristics of the client including the categorisation of theclient as a professional client;(2)

the characteristics of the client order;(3)

the characteristics of the financial instrument that is subject to theorder; and(4)

the characteristics of the Brokers and/or Execution Venues to whichthat order can be directed;

to establish and implement a policy (set out in section 3 below) to enable it
to comply with the obligation to take all reasonable measures to achieve thebest possible result for its clients. The policy must identify, in respect ofeach relevant class of instruments:(1)

in the case of orders that CLSA places with a Broker for execution,
each such Broker. The Brokers identified must have execution
arrangements that will enable CLSA to comply with its obligations inrelation to best execution;(2)in the case of transactions that CLSA itself executes directly onbehalf of its clients, the Execution Venues on or with which it
executes those transactions. The Execution Venues identified must atleast include those that enable CLSA to obtain on a consistent basis
the best possible result for the execution of client orders; and(3)

the factors affecting CLSA's choice of Brokers and Execution Venues;(C)

to provide appropriate information (some of which is prescribed by the AFM
Rules) to its clients on the policy and to obtain clients’ consent to the policy;(D)

to monitor on a regular basis the effectiveness of the policy and, inparticular, the execution quality of the Brokers and Execution Venues

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identified in that policy and, where appropriate, correct any deficiencies;
and
(E)

1.3

to review the policy at least annually and whenever a material change occursthat affects the firm's ability to continue to obtain the best possible resultfor its clients; and to notify the client of any material changes to our order
execution arrangements or this policy.

Order handling
CLSA ensures that orders executed on behalf of clients are promptly and accurately
recorded and allocated. Comparable orders are executed sequentially and promptly
in accordance with their time of receipt unless the characteristics of an order or theprevailing market conditions make this impossible or impractical or the interests ofthe client require otherwise. CLSA shall not misuse information relating to pending
client orders, and shall take all reasonable steps to prevent the misuse of suchinformation by any of its staff.

2

Responsibility

2.1

The Board, or a designated member thereof, has overall responsibility for brokerage
activities including all aspects of order execution. This responsibility has beendelegated to the Order Execution Committee.

2.2

All CLSA employees who are responsible for placing orders with Brokers for
execution by those Brokers and/or for directly executing transactions on behalf ofclients must ensure that any such activities are conducted in accordance with therequirements and guidance set out in this Policy.

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3Best Execution Policy

3.1This policy will not apply to the extent that CLSA:

3.2

(A)

follows specific instructions from a client when executing client orders or
placing an order with, or transmitting an order to, another entity forexecution. CLSA will execute in accordance with those instructions. Clientsshould be aware that following specific client instructions may
prevent CLSA from taking steps it has designed and implemented inthis Policy to obtain the best possible execution result for thoseorders. Where a client’s specific instructions only relate to part of an order,
this policy will apply to those aspects of the order not covered by the specificinstructions. CLSA may be in receipt of specific instructions from clientswhere it receives orders from clients via a direct market access system which
specify the Execution Venue on which such orders are to be executed. In
following specific instructions, CLSA shall be deemed to have taken all
reasonable measures to achieve the best possible result in respect of anorder for its client;(B)

only provides prices to its clients at which it would be willing to buy or sell(without dealing); or(C)deals with its clients on a ‘request for quote’ (“RFQ”) basis and the quote
would meet the firm’s obligations to take all reasonable measures to achieve
the best possible result if the firm executed that quote at the time it wasprovided (unless the quote is manifestly out of date).

CLSA does not, and does not have permission to, deal with non-professional
investors (as defined in the AFM Rules). This means that CLSA is entitled to assess
the best possible result for its clients in terms of the various execution factors andnot simply on the basis of the total consideration (price and cost). As explained
above, CLSA shall not owe an obligation to obtain best execution when it deals withclients whom it has categorised as eligible counterparties for the purposes of the
AFM Rules (except where CLSA has agreed with an eligible counterparty that it willtake all reasonable measures to achieve the best possible result).
Fixed Income

3.3

CLSA’s Fixed Income department operates on a purely RFQ basis whereby clientsare not legitimately relying on CLSA in relation to the execution of transaction on
the basis that the nature of the market is that a client will generally request quotes
from a number of different dealers from which the client will have transparency andchoice of the prices at which transactions can be effected in the market. In
accordance with the AFM Rules, RFQ markets are not subject to the generalprovisions of the Best Execution requirements and therefore do not apply.
Execution Venues

3.4

CLSA may use one or more of the types of Execution Venue as set out in section
1.1(A) above.

3.5

CLSA may execute orders on behalf of clients directly on exchanges, multilateral
trading facilities or organised trading facilities.

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3.6

Schedule 1 to this policy lists the particular Venues, Regional Affiliates and Third
Party Brokers by financial instrument used by CLSA to execute orders.

3.7

If the client has consented thereto and where AFM rules allow this, CLSA may
execute orders outside of trading venues, which is called Over-The-Counter (OTC)
trading. CLSA will decide to trade OTC, when it is believed to be in the client’s bestinterest to do so. Please be aware that counterparty risk may occur. CLSA will
provide additional information about the consequences of this means of execution
upon request of the client.
Order Handling and Placing Orders with Brokers

3.8

In choosing the Brokers that appear in Schedule 1, CLSA has taken care to selectthose Brokers that, in CLSA’s view, consistently provide a high quality execution
service, taking account of the relevant execution factors for the relevant Instrument
Class. CLSA only selects Brokers that execute orders in compliance with the MIFID
II requirements, including MIFID II best execution and client money rules. In
general CLSA will select affiliates as Brokers where possible. When it is not possible
to select an affiliate, CLSA will enter into arrangements with Brokers based upon
cost, their ability to execute independently, their market reputation, theirtechnology and their competitive positioning. Where CLSA places an order with a
Broker for execution by that Broker, CLSA is not responsible for controlling or
influencing the arrangements made by the Broker relating to the execution of thatorder (e.g., CLSA does not control the Broker’s choice of execution venues, suchas exchanges, multilateral trading facilities or organised trading facilities). CLSA is
not required to duplicate the efforts of the Broker to whom an order is passed inensuring the best possible result.
Direct Execution of Orders

3.9

In choosing the Execution Venues that appear in Schedule 1, CLSA has taken care
to select those Execution Venues that, in CLSA’s view, enable it to obtain on aconsistent basis the best possible results for its clients. The selection process takes
into account such factors as liquidity, integrity of marketplace and price formation.
CLSA may use direct market access facilities (e.g., trading systems provided by its
Brokers that allow it to transact (in the Broker’s name) directly on a regulated
market) to effect the execution of trades on behalf of its clients.
Choosing Between Order Placement and Direct Execution

3.10

CLSA will determine whether to place an order with a Broker or to execute an orderdirectly on an Execution Venue according to the nature of the order and the market
in which the relevant order is to be executed. In determining whether to place anorder with a Broker or to execute directly, CLSA will have regard to the relative
importance of the execution factors. In certain markets, it will only be possible toexecute client orders by placing them with a Broker in the relevant market.
Executing / Placing Orders with Execution Venues / Brokers that are notlisted in Schedule 1

3.11

CLSA employees must not directly execute orders with an Execution Venue or placeorders with a Broker that is not listed in Schedule 1 to this policy unless there are
exceptional circumstances. Exceptional circumstances might include where CLSA
wishes to trade in an unusual financial instrument that cannot be executed with orJuly 2022

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by one of the Execution Venues or Brokers already listed (either at all or in amanner that would be likely to achieve the best possible result for the client). Any
execution of a transaction with an Execution Venue or placing of an order with a
Broker that falls outside the list of Execution Venues and Brokers must be preapproved by CLSA’s Best Execution Committee. CLSA’s procedures for assessing
new Brokers and Execution Venues include a requirement for them to be assessedin terms of their ability to enable CLSA to comply with its obligations under thispolicy and to be included within Schedule 1 before trading with, or on, them cancommence.
Relative importance of execution factors for Equities
3.12

Each order is reviewed by a sales trader who will evaluate the order in the context
of the execution factors, and trade directly as appropriate or transmit the order toa Broker with specific trading instructions.

3.13

CLSA or its Broker will take into account a range of execution factors. The usual
order of priority will be as follows:(A)

price;(B)

speed;(C)

likelihood of execution;

(D)

size;

(E)

costs; and(F)

any other relevant execution factor (including those set out in paragraph
1.2(A) above).

3.14

However, various execution factors may be more or less important in certain
circumstances, and the prioritisation will be subject to any specific instructions
CLSA receives from the client.

3.15

In particular, in illiquid markets CLSA will prioritise the key execution factors in thefollowing way:(A)

likelihood of execution;(B)

price;(C)

speed;

(D)

size;

(E)

costs;(F)

any other relevant execution factors.

Relative importance of execution factors for Fixed Income
3.16

As described in paragraph 3.3 above, CLSA only operates on RFQ basis in respectof Fixed Income and so is not required to comply with the Best Execution rules.

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Execution strategies
3.17

The sales trader may consult the client to discuss the trade execution strategy
which may involve discussing various execution factors. Information provided by
the client may impact the execution strategy CLSA uses. CLSA's strategy may
include executing orders immediately, or working orders over a period of time.
Where CLSA invites clients to choose an Execution Venue, fair, clear and not
misleading information shall be provided to prevent the client from choosing one
execution venue rather than another on the sole basis of the price policy appliedby CLSA.

3.18

These considerations are part of all sufficient steps CLSA takes to obtain the best
possible execution result on a consistent basis in accordance with the Rules.
Limit orders

3.19

The client has the possibility to give a limit order to CLSA. Unless a client expressly
instructs otherwise, CLSA must, in the case of a client limit order in respect ofshares admitted to trading on a regulated market or traded on a trading venue
which is not immediately executed under prevailing market conditions, takemeasures to facilitate the earliest possible execution of that order by making public
immediately that client limit order in a manner which is easily accessible to othermarket participants. When the order is large in scale compared to normal market
size, the AFM may grant dispensation from such obligation upon request.
Aggregation of orders

3.20

CLSA will generally not aggregate any client orders with other orders, whether
belonging to other clients or to a member of the CLSA Group or its clients. However,in certain circumstances aggregation of client orders may occur when the following
conditions are met:(A)

It is unlikely that the aggregation of orders and transactions will work overall
to the disadvantage of any client whose order is to be aggregated;(B)

It is disclosed to each client whose order is to be aggregated that the effectof aggregation may work to its disadvantage in relation to a particular order;(C)

An order allocation policy is established and effectively implemented by
CLSA providing for the fair allocation of aggregated orders and transactions
including how the volume and price of orders determines allocations and thetreatment of partial executions.

The factors affecting the choice of Execution Venue or Broker
3.21

In relation to an order, an Execution Venue or Broker will be selected as isappropriate in view of the size and nature of the relevant order. CLSA will selectExecution Venues and Brokers based on their track records of achieving the best
result in terms of the execution factors taking into account, in particular, thegeographic and market coverage of the relevant Execution Venue or Broker.
Fees and commissions

3.22

Where CLSA applies different fees depending on the Execution Venue, it shall
explain these differences in sufficient detail in order to allow the client toJuly 2022

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understand the advantages and the disadvantages of the choice of a single
Execution Venue. CLSA shall only receive third-party payments that comply withthe rules regarding what type of inducements can be paid to or received from any
counterparty and shall inform clients about the inducements that it may receivefrom the Execution Venues. CLSA shall specify the fees charged by CLSA to all
counterparties involved in the transaction, and where the fees vary depending on
the client, CLSA shall indicate the maximum fees or range of the fees that may bepayable.
Where CLSA charges more than one participant in a transaction in compliance withthe rules regarding what type of inducements can be paid to or received from any
counterparty, CLSA shall inform its clients of the value of any monetary or nonmonetary benefits received by it.
Monitoring and Reviewing this Policy
3.23

CLSA has an obligation to monitor the effectiveness of its order execution
arrangements and this policy. This obligation has been incorporated into CLSA’sgeneral compliance monitoring process and business procedures and policies.

3.24

CLSA assesses, on a regular basis, whether the execution venues listed in Schedule
1 provide the best possible result for clients or whether it needs to make changes
to its execution arrangements. The assessment takes into account the information
on execution quality published by execution venues and brokers in accordance with
MiFID II. CLSA also conducts regular reviews through random sampling oftransactions to ascertain whether the best possible result was obtained in respectof those transactions.
Review of Policy

3.25

At least annually, CLSA will review this policy and its execution arrangements. The
review will focus on whether CLSA would obtain better results for its clients if it wasto:(A)

include additional or different Execution Venues or Brokers;(B)

assign a different relative importance to the execution factors; or(C)modify the process by which Execution Brokers and Venues are selected(D)

modify any other aspects of this policy and/or its execution arrangements.

CLSA will also review this policy and/or its execution arrangements whenever amaterial change occurs that could affect its ability to obtain the best possible result
for the execution of its clients' orders on a consistent basis, for example, asignificant event that could impact the parameters of best execution such as theexecution factors specified in section 3 above. CLSA will assess whether a materialchange has occurred and consider making changes to the relative importance ofthe best execution factors.
The reviews will be supervised by Compliance and this requirement has been
incorporated into CLSA’s compliance monitoring process.

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CLSA EUROPE BVClient Notification / Consent Requirements
3.26

CLSA has an obligation to provide its clients with appropriate information on thispolicy. Where CLSA executes orders on behalf of a client, it will also have an
obligation to obtain the client’s consent to this policy. By accepting our terms ofbusiness, you consent to your transactions being executed in accordance with thispolicy.

3.27

To the extent that CLSA makes any material changes to this policy (whether
pursuant to the review process or otherwise), it will notify the changes to its clientsand updated policy will be made available to client on www.clsa.com page.

3.28

Where a client makes reasonable and proportionate requests for information about
this Policy and how it is reviewed to CLSA, CLSA shall answer clearly and within areasonable time.
Annual Publication of Top 5 Execution Venues

3.29

Each year CLSA will publish data on the top five Execution Venues and the top five
Brokers CLSA has used during the previous year (RTS 28 Report). The top five
Execution Venues and Brokers will be based on trading volume (i.e. the number offinancial instruments traded times price for each transaction, cumulated for theyear) for each class of financial instrument for the preceding year.

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Schedule 1 – Execution Venues and Financial Instruments
The classes of financial instruments are set out in Annex 1 of Delegated Regulation(EU) 2017/576.
Asset Class

Region Venues, regional affiliates, or third party brokers
which may be used to execute client orders

Bonds

Global CLSA (UK)

Equities

Global CLSA (UK)

Exchange Traded
Products

Global CLSA (UK)

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