CLSA ASIA-PACIFIC
SECURITIES DEALING SERVICES:TAIWAN MARKET ANNEX ( FINI )1.

Definitions and Interpretation

1.1

In this Securities Dealing Services: Taiwan Market Annex, including the
Schedule, capitalised terms have the meaning given to them in the “CLSA
Asia-Pacific Terms of Business” (the “Terms of Business”), the Securities
Dealing Services Annex and the Direct Market Access Annex. In addition,
the following capitalised terms have the following meaning:“ES” means the Emerging Stock, the secondary board for trading provided
by GTSM.
“FINI” means the status of a Foreign Institutional Investor as described in
the applicable laws of Taiwan.
“GTSM” means the GreTai Securities Market, formerly knows as the Overthe-Counter Center.
“SFB” means The Securities and Futures Bureau of Financial Supervisory
Commission of Taiwan.
“TSE” means the Taiwan Stock Exchange.

1.2This Securities Dealing Services: Taiwan Market Annex is referred to herein
as “this Annex”.

1.3

References in this Annex to “we”, “us” and “our” mean, unless the context
otherwise requires, CLSA and where the context requires will also include
any company in the CLSA Group, or persons connected with the CLSA
Group.

2.

Effect of Terms of Business; Amendment

2.1

This Annex shall apply to you if (a) you requested in your Application Formthat we provide you with Securities Dealing Services and requested thatsuch Securities Dealing Services be provided in respect of the Taiwan
Market; (b) we currently provide you with Securities Dealing Services inrespect of the Taiwan Market.

2.2

The terms and conditions set out in this Annex shall apply to all Securities
Dealing Services in the Taiwan Market provided by us to you in addition to,and supplemental to, the terms and conditions set out in the Terms ofBusiness and in the Securities Dealing Services Annex. Accordingly, theterms and conditions in this Annex are legally binding and take effect when
you signify your acceptance by placing an order for trading of Securities in
the Taiwan Market with us following your receipt of our Terms of Business,
the Securities Dealing Services Annex and this Annex.

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3.

FINI Registration

3.1

You are required to obtain the FINI status and have completed the FINI
registration with the TSE before any securities dealing in the Taiwan
Market. You represent and confirm to us that you are a registered FINI.

3.2

You undertake to immediately notify CLSA and to cease using the DMA
Service to trade Taiwan securities if its FINI registration is cancelled orsuspended.

4.

Expiration of OrderIn placing an Order, you shall state on the Order the expiry date of such
Order. In the event that for any reason the Order cannot be executed on
the trading day on which it is received, the Order shall be deemed
cancelled, unless a different expiration date is clearly indicated in theOrder.

5.

DMA Order

5.1

You acknowledge that electronic trading and DMA Order carry the samelegal effect as the order placing via other methods and you shall performthe settlement obligations in accordance with applicable regulations, and in
the event of default, you shall take full legal responsibility.

5.2

You acknowledge that the TSE or GTSM has the authority to request us tosuspend, limit or refuse certain, partial or all of CLSA customers to place
DMA Orders and in such circumstance, we will comply with such request
without any liability or any prior notice to you.

6.

Short Selling

6.1

Without limitation to your obligations under the Terms of Business and the
Securities Dealing Services Annex, for every transaction in Securities in the
Taiwan Market, you will inform us if that trade is a short selling order prior
to or at time of the order. This shall include orders placed by oral orelectronic means, or in writing by fax, direct market access (DMA) or othermeans of transmission.

6.2

You represent and confirm your understanding of the short selling
requirements in Taiwan and shall not place any uncovered short sell DMA
orders as it is unlawful to do so.

6.3

For every short selling order conducted through us by oral or electronicmeans or DMA or in writing by fax or other means of transmission, you
confirm that you will make proper arrangements to cover the trade
settlement, and if applicable, that you have confirmation from your lender
for the delivery of the trade.

6.4

You undertake to provide the relevant information and assurances
requested by CLSA, in form and substance satisfactory to CLSA prior to our
accepting the order or prior to the DMA order (as applicable), in written
form by Bloomberg or means as otherwise agreed in relation to the shortselling order and the proper arrangements for covering the trade
settlement.

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6.5

You authorize CLSA to contact your custodian bank to verify your securities
holdings and your ability to sufficiently settle the trades placed through
CLSA.

6.6

Without prejudice to any other provisions of the Terms of Businessincluding, without limitation, your obligations to at all times comply withapplicable Market Requirements, you shall at all times comply with orprovide such information or take such actions in order for us to comply
with the Operational Regulations for Securities Firm Handling Margin
Purchases and Short Securities, the Management Rules for Securities Firm
Handling Margin Purchases and Short Securities in relation to short selling
and the operating rules issued by, or for trading on, TSE, GTSM and ES.

7.

Investor Compensation FundWe have explained to you, and you understand and agree, that in theevent of a default committed by us causing you to suffer a pecuniary loss,
your right to compensation under the Investor Compensation Fundestablished under the Securities Investors and Futures Traders Protection
Law will be restricted to the extent provided for therein. You are fully
aware that the maximum compensation you may receive for your loss
caused by our default in a trading of securities in Taiwan is limited to
NT$1,000,000 or the amount stipulated in such Law as may be amended
from time to time. There can be no guarantee that your loss may berecouped from the Investor Compensation Fund in full or in part.

8.

Securities Positions and Reporting Limits
The SFB has prescribed certain trading limits and disclosure requirementson securities that may be held or controlled by a person or jointly withothers and require such person holding or controlling a reportable position
to notify the competent authorities. Furthermore, a person may berequired to report and disclose his securities trading when he holds aparticular position (e.g. being a director of board in a public company).
You may need to take legal advice regarding your obligations thereunder.
You acknowledge that it is your responsibility to observe such position
limits, to monitor your holdings and to make reports where applicable.

9.

Risk Disclosure Statement
You have confirmed (whether in the Application Form or otherwise) thatyou acknowledge and confirm that the terms and conditions applicable to
the Services and the risk disclosure statements in the “Risk DisclosureStatement Schedule” to this Annex are and have been fully explained toyou in a language that you understand and that you have read andunderstood them.
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Securities Dealing Services: Taiwan Market Annex
Risk Disclosure Statement ScheduleThis Risk Disclosure Statement Schedule does not disclose all of the risks andother significant aspects of trading in securities, futures and options. In light of
the risks, you should undertake such transactions only if you understand thenature of the contracts (and contractual relationships) into which you are enteringand the extent of your exposure to risk. You should carefully consider whether
trading is appropriate for you in light of your experience, objectives, financial
resources and other relevant circumstances. Please read this Schedule carefully,
and ask questions and take independent advice as you consider appropriate.
Securities Risk Disclosure Statement•

You acknowledge that the price of Securities can and does fluctuate,
sometimes dramatically, and that the price of any individual security may
experience downward movements, and may become valueless.
Youappreciate therefore that it is as likely that losses will be incurred rather thanprofit made as a result of buying and selling securities. This is a risk that you
are prepared to accept.

•

You acknowledge that there are risks in leaving Securities in our custody or in
authorising us to deposit securities as collateral for loans or advances madeby us or authorising us to borrow or loan Securities and you confirm that you
are prepared to accept such risk notwithstanding that in these circumstances
you face the risk of loss of such Securities.

•

You confirm that you understand the short selling requirements in Taiwan
and, in particular, that uncovered short selling on Exchanges in Taiwan isunlawful.

Electronic Communication and Trading System Risk Disclosure Statement•

You understand that the electronic communication systems (including theinternet) and electronic trading facilities are supported by computer-based
component systems for the order-routing, execution and matching oftrades. As with all facilities and systems, they are vulnerable to temporary
disruption, delay or failure and may not be a reliable medium ofcommunication due to unpredictable traffic congestion or other reasons andthat such unreliability is beyond our control. This may give rise to situations,
including delays, disruption or failure, in transmission and receipt of yourinstructions or other information, delays, disruption or failure in execution or
execution of your instructions at prices different from those prevailing at thetime your instructions were given, misunderstanding and errors in any
communication between you and us and so on. Whilst we will take every
possible step to safeguard our systems, client information, accounts andassets held for the benefit of our clients, you accept the risk of conducting
transactions via electronic communication systems.

•

You understand that your ability to recover certain losses for any failure,
disruption or delay in the electronic communication systems (including theinternet) and electronic trading facilities may be subject to limits on liability
imposed by the system provider, the market, the clearing house and/or
member or participant firms. Such limits may vary and you understand thatyou should ask us for details in this respect.

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•

Trading on an electronic trading system may differ from trading on othertrading systems. If you undertake transactions on an electronic trading
system, you understand that you will be exposed to risks associated with thesystem including the failure or malfunction of hardware and software. You
understand that the result of any system failure or malfunction may be thatyour order is either not executed according to your instructions or is not
executed at all.

•

Trading on an electronic trading system may differ from trading on otherelectronic trading systems. By familiarizing yourself with the CLSA System,
you may reduce the risk that trades will be incorrectly entered into thesystem.

•You acknowledge and agree that orders placed in electronic form through the
DMA Service may take time to transmit, and are not completed
instantaneously. Thus, where the market price changes quickly, it cannot be
guaranteed that the time which the order is executed, or the result of achange or cancellation of an order will necessarily conform with yourexpectations.

•

You understand that you need to use the encrypted code for identification
verification purpose to execute electronic order (including DMA Order) andyou are fully responsible to any trade placed with correct user’s name andcode

ES Stock Risk Disclosure Statement•

You understand that ES has been established as a market designed toaccommodate companies to which a high investment risk may be attached.
In particular, you understand that companies may list on ES with neither a
track record of profitability nor any obligation to forecast future profitability.
Furthermore, you understand that the standards adopted by ES for admissionof listing is much loose than those adopted by TSE and GTSM. ES does notconduct substantive review on the financial soundness of the companies listed
thereon. You appreciate that there may be risks arising out of the emerging
nature of companies listed on ES and the business sectors or countries inwhich the companies operate.

•

You are aware of the potential risks of investing in such companies andunderstand that you should make the decision to invest only after due andcareful consideration. You understand the greater risk profile and othercharacteristics of ES mean that it is a market more suited to professional andother sophisticated investors.

•

Given the emerging nature of companies listed on ES, you understand there isa risk that securities traded on ES may be susceptible to higher market
volatility compared to securities traded on TSE and GTSM. You understandthat the price of shares traded on ES is not subject to the daily 7% fluctuation
limit set by the SFB applicable to shares traded on TSE and GTSM andaccordingly the trading of shares on ES brings much greater exposure to loss.

•

You further understand that there are often fewer analysis reports, news
coverage or other publicly available information in relation to ES shares.
Therefore, you will need to rely on your own judgment to a greater extent
when deciding whether to conduct a trade of ES stock than in relation to

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shares traded on TSE or GTSM. You also appreciate the fact that certain
number of companies listed on ES have small capital, have been in existence
for a short period and have not generated profits yet. No assurance is giventhat there will be a liquid market in the securities traded on ES.
•

You understand that the settlement of the securities traded on ES shall be
conducted in cash or spot basis and no margin transactions are allowed.
Therefore, you need to make sure that you have sufficient resources to effectsettlement to avoid any default.

•

You acknowledge that this risk disclosure statement does not purport todisclose all the risks and other significant aspects of ES. You understand thatyou should undertake your own research and study on the trading of
securities on ES before commencing any trading activities.

•

You understand that you should seek independent professional advice if you
are uncertain of or have not understood any aspect of this risk disclosurestatement or the nature and risks involved in trading of securities on ES.

•

You understand that the signing of this risk disclosure statement is mandatory
under the rules of GTSM in relation to trading of ES stock. You understandthat we will not be able to effect your instructions to deal in securities on ES if
this statement is not signed and acknowledged by you.

•

You understand that we are required under the rules of GTSM to explain thecontents of this disclosure statement to you and to ensure that you areprovided with a signed copy of this risk disclosure statement.

Securities with Subscription Rights Risk Disclosure Statement•

You understand that securities with subscription rights give you a right topurchase the underlying shares and accordingly the value of such securities islinked with the price of the underlying shares. You understand that you
should pay attention to the effect the price of the underlying shares may haveon your securities before you decide to trade in such securities.

•

You understand that the price of securities with subscription rights will be
determined by the market based on the mechanism of supply and demandwhen they are traded on the relevant stock exchanges, and the price mayvary from their original issuance price.
Before you decide to purchasesecurities with subscription rights, you should carefully evaluate the financial
condition, credit status and other factors which relate to the issuer’s ability toperform its obligations to avoid any potential loss. You understand thatneither TSE nor us guarantee that the issuer will perform its obligations.

•

You understand that in most of the conditions, if you do not exercise yoursubscription rights before the expiration of the prescribed subscription period,
you will be deemed to have waived your exercise right.

•

You acknowledge that this risk disclosure statement does not purport todisclose all the risks and other significant aspects of trading of securities with
subscription rights. You understand that you should undertake your own
research and study on the trading of securities with subscription rights before
commencing any trading activities. Before you decide to trade such securities,

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you should plan your financial resources and evaluate the relevant risk
exposure to reduce any potential loss.
•

You understand that you should seek independent professional advice if you
are uncertain of or have not understood any aspect of this risk disclosurestatement or the nature and risks involved in trading of securities with
subscription rights.

•

You understand that the signing of this risk disclosure statement is mandatory
under the rules of TSE in relation to trading of securities with subscription
rights. You understand that we will not be able to effect your instructions todeal in securities with subscription rights if this statement is not signed andacknowledged by you.

•

You understand that we are required under the rules of TSE to explain thecontents of this disclosure statement to you and should also ensure that you
are provided with a signed copy of this risk disclosure statement.

Client Assets Received or Held Outside Taiwan Risk Disclosure Statement•

Client assets received or held by the person licensed or registered outside
Taiwan are subject to the applicable laws and regulations of the relevant
overseas jurisdictions which may be different from the Securities andExchange Law and the regulations made thereunder. Consequently, suchclient assets may not enjoy the same protection as that conferred on client
assets received or held in Taiwan.

Margin Trading Risk Disclosure Statement•

The risk of loss in financing a transaction by deposit of collateral is significant.
You understand that you may sustain losses in excess of your cash and anyother assets deposited as collateral with us. Market conditions may make it
impossible to execute contingent orders, such as “stop-loss” or “stop-limit”
orders. You understand that you may be called upon at short notice to makeadditional margin deposits or interest payments. If the required margindeposits or interest payments are not made within the prescribed time, youunderstand that your collateral may be liquidated without your consent.
Moreover, you will remain liable for any resulting deficit in your account andinterest charged on your account. You understand therefore that you shouldcarefully consider whether such a financing arrangement is suitable in light ofyour own financial position and investment objectives.

Providing an Authority to Hold Mail or to Direct Mail to Third Parties Risk
Disclosure Statement•

If you provide us with an authority to hold mail or to direct mail to third
parties, you understand that it is important for you to promptly collect inperson all contract notes and statements of your account and review them indetail to ensure that any anomalies or mistakes can be detected in a timely
fashion.

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Providing an Authority to Repledge Your Securities Collateral etc Risk
Disclosure Statement•

There is risk if you provide us with an authority that allows us to apply yoursecurities or securities collateral pursuant to a securities borrowing andlending agreement, repledge your securities collateral for financial
accommodation or deposit your securities collateral as collateral for thedischarge and satisfaction of our settlement obligations and liabilities.

•

If your securities or securities collateral are received or held by us in Taiwan,
the above arrangement is allowed only if you consent in writing. Unlessterminated or rescinded by you or us, your authority will be deemed given to
us for indefinite time. You understand that termination or rescission will beeffective to TSE only after its receipt of notice from us and you are notallowed to notify TSE of the occurrence of such incident out of your initiative.

•

You are not required by any law to sign these authorities. But an authority
may be required by us, for example to facilitate margin lending to you or toallow your securities or securities collateral to be lent to or deposited ascollateral with third parties. We should explain to you the purpose for which
one of these authorities is to be used.

•

If you sign one of these authorities and your securities or securities collateral
are lent to or deposited with third parties, those third parties will have a lienor charge on your securities or securities collateral.
Although we areresponsible to you for securities or securities collateral lent or deposited under
your authority, a default by us could result in the loss of your securities or
securities collateral.

•

A cash account not involving securities borrowing and lending is available
from most licensed or registered persons. If you do not require marginfacilities or do not wish your securities or securities collateral to be lent orpledged, you understand that you should not sign the above authorities andask to open this type of cash account.
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