BEST EXECUTION POLICY – SINGAPORE

1.

INTRODUCTION

1.1

Definitions“MAS” refers to the Monetary Authority of Singapore.
“CMSL” refers to capital markets services licence issued by the MAS.
“SFA” refer to the Securities and Futures Act (Cap. 289).
“MAS Notice” refers to Notice SFA 04-N16 on Execution of Customers’ orders“Institutional Investor” or “Accredited Investor” has the same meaning as each definedin section 4A of the SFA.
“CLSA” refers to CLSA Singapore Pte. Ltd. and/or CLSA Global Markets Pte. Ltd., which
are CMSL holders for dealing in capital markets products.
“Customer” means in relation to CLSA carrying on business in dealing in capital markets
products, a person, other than an Institutional Investor, on whose behalf, or with whom,
CLSA (either directly or through its agent) deals or will deal in capital markets products, andwhom has a contractual relationship with CLSA for such transactions.
“Best Execution” means to place and execute orders from Customers on the best available
terms.
“Execution Venues” refer to exchanges or alternative venues where the execution of tradestake place, such as dark pools, liquidity providers and market makers.

1.2

Background
CLSA carries on business in dealing in capital markets products on behalf of or withcustomers who are Institutional Investors or Accredited Investors only.
In respect of Customers of CLSA who are not Institutional Investors (i.e. Accredited
Investors), CLSA is required under the MAS Notice to establish and implement written Best
Execution policies and procedures; and to place and execute comparable Customers’
orders in accordance with the time of receipt of such orders. Such written policies andprocedures must be commensurate with the nature, scale and complexity of its business.

BEST EXECUTION POLICY – SINGAPORE

1.3

Applicable Entities and Business Lines
CLSA operates the following capital markets businesses in Singapore, which the Best
Execution requirements may apply (please refer to Section 2.3 below for the applicability
for each business line and product):i) Institutional Equitiesii) Equity Derivativesiii) FICCiv) Wealth Management
This policy does not apply to other CLSA entities in Singapore, which are CMSL holders forfund management, as the business activities of such entities do not involve any placement
or execution of Customers’ order for purchase or sale of any capital markets products.
All sales traders, traders and dealers who handles orders of a Customer of CLSA are subject
to this policy. In circumstances where Best Execution obligation is not owed to theCustomer, CLSA will act honestly, fairly and professionally when executing such Customers’
orders and adopt the requirements set out in this policy where possible as a best practice.

2.

APPLICATION OF BEST EXECUTION

2.1

Determining Factors on Applicability of Best Execution Obligations
CLSA deals in capital markets products with Customers who are Accredited Investors only,
and not retail investors. Accredited Investors are generally deemed to be more sophisticatedand it is legitimate/reasonable under certain circumstances that Customers who are
Accredited Investor do not rely on the CMSL holder for Best Execution.
Under the MAS Notice, the CMSL holder is required to assess and document its
assessment to determine, the circumstances under which a Customer who is an Accredited
Investor does not rely on the CMSL holder for Best Execution.
CLSA will consider the following factors to determine whether it has Best Execution
obligations to the Customer:i)

Trading discretion – whether CLSA is required to exercise discretion in relation to
the execution of such Customer’s order and the Customer reasonably/legitimately
relies on CLSA in relation to the exercise of such discretion.

BEST EXECUTION POLICY – SINGAPOREii) Instructions of the Customer - whether the Customer specifies the venue, priceand/or the manner at which the order should be executed.
iii) The party who initiates the transaction – where CLSA approaches a Customer andadvises a Customer on a transaction, it is more likely that the Customer will be
placing reliance on CLSA. Where a Customer initiates the transaction, it is less likelythat the Customer will be placing reliance on CLSA.
iv) Trading capacity, market practice and the existence of a convention to “shop around”– in particular for principal to principal transactions, where the practice in the market
in which a business area operates suggests a Customer takes responsibility for thepricing and other elements of the transaction (e.g. there is a market convention to“shop around” for a quote), it is less likely that the Customer will be placing relianceon CLSA.
v) Relative levels of price transparency within a market – if CLSA has ready access toprices in the market in which CLSA operates, whereas the Customer does not, it ismore likely that the Customer will be placing reliance on CLSA, whereas if CLSA’saccess to pricing transparency is equal to or similar to the Customer’s, it is less likelythat the Customer will be placing reliance on CLSA.
vi) Information provided by CLSA and any bilateral agreement reached – for a bilateralcontract between CLSA and the Customer, each acting as principal, and where suchagreement documents the principal capacity and no fiduciary duty on the part of
CLSA or other non-reliance clauses, there should not be a legitimate basis for the
Customer to place reliance on CLSA.

2.2

Exceptions on Application
Generally, this Policy does not apply in the following circumstances:i) Specific order instruction - when CLSA places and/or executes an order following
specific instruction from the Customer, it would be regarded as having satisfied its
Best Execution obligations in respect of the part or aspect of the order to which theCustomer’s instruction relates.
ii) Direct Market Access (“DMA”) orders – the Customer would be deemed to havegiven CLSA a specific instruction when the Customer transacts directly through anelectronic trading platform including DMA platforms, as the Customer will havediscretion over the order execution (including selecting adequate parameters forthe order to be executed) instead of a CLSA trader.
iii) Negotiated trades/cross trade – where CLSA acts as agent/broker to execute anegotiated trade/cross trade between a buyer and seller, the negotiation can involve
specific instructions and agreements on a “willing buyer, willing seller” basis between
the buyer and seller on the price and how the trade is to be executed. The negotiatedBEST EXECUTION POLICY – SINGAPORE
price may be executed away from the prevailing best bid/offer prices in the market
and the buyers and sellers are expected to assess the negotiated price against themarket price/quotes on the exchange, other Execution Venues or by other brokers.
This policy will not apply as the negotiated trade/cross trade is executed under the
specific instructions of the Customer.
iv) Request for Quote (“RFQ”) – the Customer would not be deemed to be relying on
CLSA to provide Best Execution when the Customer approaches CLSA for a“request for quote” for a particular securities or OTC derivatives transaction. Suchtransactions are on a principal-to-principal basis and involves a bilateral contract. In
addition, the provision of quotes by CLSA are generally on a “reverse enquiry” basisby the Customer, and CLSA only deals with Customers who are of sufficientsophistication nature, who can “shop around” and assess CLSA’s quotes against
those provided by other dealers.

2.3

Applicability to each Business Line and ProductsThis section set outs the scope of business activities which operate through CLSA, that theBest Execution obligations may be applicable.

2.3.1 Institutional Equities
This policy is applicable for cash equities, global portfolio trading and ADRs/GDRs ordersthat are:i)agency orders placed by the Customer with CLSA and executed by CLSA on an
Execution Venue directly;ii) agency orders placed by the Customer with CLSA and forwarded to another CLSA
broker or other third party broker for execution on an Execution Venue; oriii) orders placed by the Customer with CLSA which will involve a cross trade between
such a Customer and another Customer or any CLSA entity (i.e. CLSA and anyother CLSA group entities) as principal , whether the cross trade is
executed/reported by CLSA or forwarded to another CLSA broker or other third party
broker for execution/reporting.
In respect of ADR/GDR orders, it should be handled the same way as a cash equities
agency order, and CLSA will apply the same relevant execution factors as a cash equities
agency order when executing the ADR/GDR order to achieve the Best Execution outcome.
CLSA will not be obliged to check whether the Customer can get a better price by buying
the underlying security and converting it to create the ADR, unless specifically instructed by
the customer.

2.3.2 Equity Derivatives

BEST EXECUTION POLICY – SINGAPOREi)

Equity P-Notes
This policy does not apply to P-Notes as P-Note investors are generally Institutional
Investors.

ii) Equity-Linked Structured Notes
CLSA acts a distribution agent for structured notes issued by CSI Financial Products
Limited (“CSIFP”).
This policy does not apply to structured notes on the below basis:- Structured note transactions are principal-to-principal transactions involving
bilateral contract and generally on a RFQ basis. CLSA only distributes
structured notes that are issued by CSIFP and when the Customer
approaches CLSA for a quote, the intent of the Customer would therefore be
to purchase CSIFP structured notes specifically. CLSA does not distributestructured notes of other issuers or act as financial adviser/investment
adviser to the Customer, and the onus is on the Customer, who are
Accredited Investors and are of sufficient sophisticated nature, to “shoparound” for structured products of other issuers.
- CLSA only acts as distribution agent for CSIFP structured notes, and the
distribution is on a RFQ basis as said above. There is no contractual
relationship between CLSA and the Customer in respect of the structured
note transaction that may give rise to the obligations for CLSA to provide
Best Execution.
iii) Equity OTC Derivatives (“OTCD”)
OTCD transactions involve bilateral contracts between CLSA and the Customer,
each acting as principal, and governed by an ISDA mini-master agreement. CLSA
may hedge the OTCD transaction via a back-to-back OTCD transaction with arelated entity/third party entity or by trading the underlying securities. The hedging
transactions are principal transactions/risk positions of CLSA and CLSA has thediscretion on all relevant hedging decisions.
This policy does not apply to OTCDs in general on the below basis:- OTCD transactions are generally on a RFQ basis. CLSA only enters into
OTCD transactions with Customer as a principal, not as an agent. When the
Customer approaches CLSA for a quote, the intent of the Customer would
therefore be to enter into an OTC transaction with CLSA specifically. CLSA
does not act as an agent/broker in respect of OTCD products issued by otherthird parties, nor does it act as the financial adviser/investment adviser to theCustomer, and the Customers, who are Accredited Investors and are of
sufficient sophisticated nature, can “shop around” for OTCD products offeredby other dealers.

BEST EXECUTION POLICY – SINGAPORE---

In the ISDA mini-master agreement, it is specified that the Customers are
required to make their own independent decision to enter into any transaction
with CLSA using their own judgment and upon advice from theirfinancial/investment advisers, and CLSA does not have any fiduciary duty to
the Customer.
OTCD transactions are bilateral contracts negotiated between CLSA and theCustomer. The Customers, who are Accredited Investors and are of
sufficient sophisticated nature, have the discretion to negotiate the relevant
clauses in their favour and the onus is on the Customer to determine whether
the OTCD product offered by CGM is on the best terms available to theCustomer, and the Customer can “shop around” for other better quotes.
With regards to the hedging transactions by CLSA, CLSA assumes themarket risks on the OTCD transactions that it has entered into with theCustomer and CLSA has the discretion on all relevant hedging decisions,
given that the hedging trades are principal/risk positions of CLSA.
Additionally, CLSA’s hedging decisions should not have an impact on thesettlement price of the Customers’ OTCD transactions as for option
transactions, the settlement is based on a pre-determined strike price agreed
between CLSA and the Customer, while for swap transactions, thesettlement is generally based on a benchmark price (e.g. market closing
price of the underlying securities or closing price of the fund) or any otherprice that is specified by the Customer.

However, if the bilateral contract between CLSA and the Customer is such that thesettlement price of the Customer’s swap transaction is linked to the actual execution
price of the underlying securities hedges by CLSA and where a CLSA trader isrequired to handle and execute such hedging transactions and exercise hisskills/discretion to ensure a good execution price/outcome, then CLSA will provide
Best Execution to the Customer in accordance with this Policy.

2.3.3 FICC
i)

Credit Market Making/Cash Bonds
The credit market making/cash bond trading business in Singapore involves CSI
Global Markets Limited (“CSIGM”) dealing in cash bonds with customers in
Singapore who are Accredited Investors only under the licensing exemption inparagraph 2(1)(e)(i) of the Second Schedule of the Securities and Futures(Licensing and Conduct of Business) Regulations.
For the credit market making/cash bond trading business, it generally operates on
the following basis:

BEST EXECUTION POLICY – SINGAPORE-

the business generally operates on a RFQ basis, i.e. the business isapproached and requested by Customers to provide quotes; andthe nature of the market is such that Customers will generally request quotes
from a number of different dealers (market makers) who are readily available
to provide/create liquidity in the market.

FICC salespersons in Singapore employed by CLSA may receive requests forquotes from CSIGM customers and will assist the customer to obtain quotes from
CSIGM under the specific instructions of the customer. Such customers areonboarded customers of CSIGM, and the contractual relationship for the bondtransactions is between the customer and CSIGM, not CLSA. In this regard, no Best
Execution obligation is owed by CLSA to the customer. For the Best Execution policyof CSIGM, please refer to the CLSA Hong Kong Best Execution policy.
ii) FICC Structured Notes
CLSA acts a distribution agent of CISGM for FICC structured notes.
This policy does not apply to structured notes on the below basis:- Structured note transactions are principal-to-principal transactions involving
bilateral contract and generally on a RFQ basis.
- CLSA only distributes CSIGM structured notes and when the Customer
approaches CLSA for a quote, the intent of the Customer would therefore be
to purchase CSIGM structured notes specifically. CLSA does not distributestructured notes of other issuers or act as financial adviser/investment
adviser to the Customer, and the onus is on the Customer, who are
Accredited Investors and are of sufficient sophisticated nature, to “shoparound” for structured products of other issuers.
- CLSA only acts as distribution agent for CSIGM structured notes, and the
distribution is on a RFQ basis as said above. There is no contractual
relationship between CLSA and the Customer in respect of the structured
note transaction that may give rise to the obligations for CLSA to provide
Best Execution. For the Best Execution policy of CSIGM, please refer to the
CLSA Hong Kong Best Execution policy.
iii) FICC Solutions- Generally upon the request of customers, FICC solutions staff of CLSA may
generate transaction ideas for the customers, amongst others, bespoke
hedging solution and portfolio restructuring of assets/liabilities.
- The above will involve bespoke products offered by CSIGM, based on thespecific needs/requirements of the customer negotiated by such customer
with CSIGM over a period of time, which means there is a limited availability

BEST EXECUTION POLICY – SINGAPORE-

of products with same or similar terms (i.e. underlying asset classes, durationand payoff structure) in the market which may be offered to customers.
In addition, any transactions by the customers are entered into CSIGM, andnot with CLSA, and there is no contractual relationship between CLSA andthe customers. As such, no Best Execution obligations is owed by CLSA to
the customer. For the Best Execution policy of CSIGM, please refer to the
CLSA Hong Kong Best Execution policy.

2.3.4 Wealth Managementi)

Equities, Exchange Traded Funds, Exchange Traded Derivatives- Applicable to the following: oagency orders placed by the Customer with CLSA andexecuted by CLSA on an Execution Venue directly;oagency orders placed by the Customer with CLSA andforwarded to affiliate or other third party broker for execution on an
Execution Venue; oroorders placed by the Customer with CLSA which will involvea married deal between such a Customer and another Customer or
any as principal , whether the married dealer is executed/reported by
CLSA or forwarded to another affiliate or other third party broker for
execution/reporting.
- Unless specified otherwise by Customers, price and speed/likelihood of
execution are typically considered most important execution factors forequities, exchange-traded funds, exchange-traded derivatives while theother execution factors (order size, likelihood of settlement, nature of order)
will be considered depending on the circumstances of the trade. However, inmore illiquid markets, the primary execution factors may vary and non-pricefactors such as likelihood and speed of execution and settlement as well as
size or nature of the order may be as important as the price factor.
- Customer’s order will be transmitted to an affiliate or third party broker which
has an agreement with CLSA to execute the orders on the relevant exchange
or market. CLSA will take all reasonable steps to ensure that the affiliate or
third party broker executes the orders in accordance with its policy in orderto obtain the best possible result for the Customer, having regard toprevailing market practices and regulatory requirements associated with theaffiliates and the market concerned.

ii) Over-the-Counter (“OTC”) Bonds
Applicable to advisory orders placed by Customer.
oThe most important execution factor for Customers will be theprice at which the OTC bonds is executed. However, in more illiquidmarkets, the primary execution factors may vary and non-priceBEST EXECUTION POLICY – SINGAPORE-

factors such as likelihood and speed of execution and settlement aswell as size or nature of the order may be as important as the pricefactor.
o
CLSA will take reasonable steps to obtain available quotes for
OTC bonds, by reaching out a list of approved counterparties andobtaining of minimum 2 quotes. SG CLSA will generally select based
upon best available price though other factors, such as liquidity,
market signalling etc. will be taken into consideration which may
result in the less favourable price being selected. CLSA will also
ensure the traded price and the next best available quotes obtained
are recorded.
oIn cases whereby pricing information is insufficient or quotes
are absent, CLSA will act in what it generally believes be in the bestinterest of customers (e.g. obtain sufficient pricing information on a
best-effort basis to validate quotes provided to customers). Whensuch situations arise, CLSA will where possible inform the Customer.
oCustomer’s order will be transmitted to an affiliate or third
party broker which has an agreement with CLSA to execute theorders on the relevant exchange or market. CLSA will take allreasonable steps to ensure that the affiliate or third party broker
executes the orders in accordance with its policy in order to obtain
the best possible result for the Customer, having regard to prevailingmarket practices and regulatory requirements associated with theaffiliates and the market concerned.
Not applicable to orders placed by Customers who approaches SGWM for a
RFQ on the basis that they are of sufficient sophistication nature, who can“shop around” and assess CLSA’s quotes against those provided by otherdealers.

iii) Structured Products
CLSA acts a distribution agent of various issuers for structured products.
This policy does not apply to structured notes on the below basis:- Structured products are bespoke products and pricing is sought from issuers.
Different issuers have different specifications. As the bespoke products are
based on the specific needs/requirements of the Customer negotiated bysuch Customer with the issuers over a period of time, which means there isa limited availability of products with same or similar terms (i.e. underlying
asset classes, duration and payoff structure) in the market which may beoffered to Customers.
- In addition, any transactions by the Customers are entered into the issuers,
and not with CLSA, and there is no contractual relationship between CLSA

BEST EXECUTION POLICY – SINGAPORE
and the Customers. As such, no Best Execution obligations is owed by CLSA
to the Customer.
iv) Mutual Funds- This policy applies to mutual funds to the extent that, depending on when
Customer’s instruction is received, CLSA will endeavour to process the
Customer’s instruction before any relevant cut-off time in accordance withthe terms applicable to subscription or redemption for the relevant fund under
the fund documentation and submit in a timely manner to the respective fundhouses. If the date of Customer’s instruction is on a non-dealing day in therelevant market, CLSA will execute the Customer’s instructions in therelevant market on the next dealing day.
-

2.4

This policy does not apply to mutual funds to the extent that:o
CLSA will execute Customer’s instruction at the priceprovided by the relevant fund house and that is determined inaccordance with the relevant terms under the fund documentation.
This price is the same across all investors trading in the specificmutual fund.
oThe subscription or redemption procedures specified in thefund documentation may limit the applicability of some best
execution factors. E.g. factors to manage the overall capacity limits(such as fund capacity limits, cumulative trading limit on fund orders)
may affect the likelihood of execution.

Relevant Execution Factors
CLSA generally takes into account the following factors in delivering Best Execution to
Customers.
i)execution factors specified by the Customers;ii) the execution price without any costs charged to Customer, or CLSA’s own fees andcommissions;iii) size of order;iv) liquidity of the market;v) speed and/or likelihood of execution;vi) the impact on market prices of displaying and/or executing an order or part of anorder;BEST EXECUTION POLICY – SINGAPOREvii) the availability of price improvement (the opportunity for an order to be executed at
a better price than what is currently quoted publicly); andviii) any other consideration relevant to the effective execution of the order.

The weighting to be attributed to each execution factor will vary for each Customer/order as
it is further dependent on:i) our knowledge of the Customer’s execution preferences based on our discussion
with the Customer and experiences dealing with the Customer;ii) the characteristics of the order;iii) the characteristics of relevant capital markets products; andiv) the characteristics of the relevant Execution Venue.

CLSA will generally assess the execution factors in the below manner, however, there may
be inter-dependency or trade-offs amongst different execution factors and the approach
may need to be adjusted depending on the circumstances:i)

Execution factors specified by the Customers – CLSA will always first consider any
specific execution factors instructed by Customers when managing the order
execution for the Customer. CLSA will attempt to meet such Customer instructions
on a best effort basis and in trying to meet such requirements of the Customer, CLSA
will be deemed to be achieving the Best Execution outcome for the Customer.

ii) Execution price – CLSA generally considers price to be the most important execution
factor. However, there may be circumstances where a combination of otherexecution factors may in total outweigh the price factor, and the price is no longer
the dominant execution factor. For example, taking into consideration the size of theorder, liquidity of the market, and likelihood of execution, CLSA may prioritisecompletion of the order over the executed price or opportunities for priceimprovement.
iii) Order size/liquidity of the market – the best price for the order depends on the ordersize relative to the liquidity of the market. Where the order size is larger than thequantities available at the prevailing best bid/offer prices and the market is illiquid,
then part of the order maybe executed at more favourable prices than thesubsequent order executions.
iv) Speed and/or likelihood of execution – speed and/or likelihood may be a trade-off
relative to the executed price, in particular, when the order size is large and themarket is illiquid. CLSA will prioritise executed price and will attempt to execute theorder over a longer period of time in order to achieve a better price and minimize thepotential impact on the market price, instead of prioritising speed/likelihood of
execution, unless otherwise specified by the Customer. In addition, where theCustomer has specifically indicated speed and/or likelihood of execution as the mostimportant execution factor instead of price but the order size is large and the market
is illiquid, CLSA may not be able to guarantee the speed/likelihood of execution of

BEST EXECUTION POLICY – SINGAPORE
the order due to insufficient liquidity or due to the need to give greater priority to thepotential impact on the market price.
v) The impact on market prices – as a responsible broker and holder of a CMS licenceissued by the MAS, CLSA will always consider the potential impact on the market
price as an important execution factor, which may sometimes take precedence over
the other execution factors, in particular speed and/or likelihood of execution. This
would mean that CLSA might not be able to guarantee the completion of the orderin some instances, especially where the market is illiquid and the prices are volatile.
vi) The availability of price improvement – when executing an order where theCustomer has given CLSA the discretion to work the order over a period of time orwhen the market is trading within the limit price provided by the Customer, CLSA willuse its experience/market know-how to determine whether there is a potential for
price improvement, and this would mean that the CLSA may not execute the orderat the immediately available best prices but may wait for a better price. CLSA will
endeavour to achieve a better execution price for the Customer but cannot
guarantee that this would always be achieved due to market uncertainty.

2.5

Order Handling
The following execution strategy will be applied by CLSA when handling Customers’ orders:

When CLSA receives a Customer’s order, the orders will be addressed in a timely
manner and order execution will be handled in a manner and pace consistent with
the nature of the order, the investment decision and the prevailing market conditions.
CLSA will take into consideration the execution factors and take all reasonable steps
to obtain the best possible results under those circumstances, as elaborated in theabove section.



CLSA is responsible for determining the relative importance of each of the Best
Execution factors as set out above.



CLSA may discuss the order execution strategy with the Customer as information
provided by the Customer may impact the execution strategy CLSA uses. CLSA's
strategy may include executing orders immediately or working the orders over a
period of time.



If CLSA receives and accepts an order from the Customer that includes a specificinstruction(s) in relation to the handling and execution of the entire order or aparticular aspect(s) of the order, CLSA will execute the order in accordance with thatspecific instruction. This may prevent CLSA from taking steps designed andimplemented to obtain the best possible result for the execution of the order. CLSA’s
obligation of Best Execution will be satisfied by executing the order in accordancewith Customer’s specific instruction.

BEST EXECUTION POLICY – SINGAPORE

2.6



In circumstances where Customers give us a specific instruction(s) which covers
one part or aspect of an order (for example, as to the choice of Execution Venue),
and CLSA has discretion over the execution of the other elements of the order, then
CLSA will continue to be subject to the Best Execution obligations in respect of theelements of the order that are not covered by Customers’ specific instruction.



CLSA may execute orders on behalf of Customers directly on exchanges orregulated Alternative Liquidity Pools (which could include itself or its affiliates). An
Execution Venue may be selected as is appropriate in view of the size and natureof the order to obtain the best possible result for the execution. CLSA may use third
party or affiliated broker for execution of orders. CLSA will select the brokers basedon their track records of achieving the best result in terms of the relevant execution
factors. CLSA is responsible for taking adequate steps to ensure that the broker isable to satisfy CLSA’s obligation to obtain the best possible result for its Customers.

Cross Trades
If the Customer has given CLSA the discretion to cross the order, and there is an appropriate
opportunity and where permitted by local regulations/market rules, CLSA may attempt toachieve Best Execution outcomes for the Customers by crossing the order with othercomparable Customers’ orders. Generally, Customers may benefit from crossing the orderinstead of working the order on the market (especially for large orders), as the execution of
the order on the market may result in price movement disadvantageous to the Customer
and it is not certain that the order may be completed, while a cross trade will allow the order
to be filled immediately at the prevailing market price and the cross trade will have relatively
limited impact on the market price.

If the Customer requests CLSA to facilitate their order, this may require CLSA squaring off
the facilitated positions in the market and crossing as principal at the agreed price andquantity with the Customer. The crossing price will usually be at a benchmark price (e.g.
VWAP/closing price) or a price requested by the Customer. CLSA will be deemed to beproviding Best Execution outcome for the Customer as it is assuming market risks tofacilitate the price and quantity for the Customer, and the crossing is executed at the priceand quantity specifically requested by the Customer.

2.7

Execution of Comparable Customers’ orders
CLSA will execute comparable Customer’s orders in accordance with the time of receipt ofsuch Customer’s order relative to other comparable Customers’ orders received by CLSA
(i.e. time priority). If the instruction of such order is such that the order may not be
immediately executed at the immediately available price and must be worked over a time

BEST EXECUTION POLICY – SINGAPORE
period, CLSA will attempt to slice the Customer orders’ in accordance with the time priority
where it is practicable to do so. CLSA may also use appropriate algorithmic trading
strategies to execute such Customers’ orders to ensure independence in the execution.
However, in some instances, it may not be feasible/reasonable to follow strict time priority,
in particular, for large orders that are to be worked over a time period/on a careful discretionbasis. In some cases, it will be infeasible to execute an earlier large order in full, before
executing a subsequent smaller order, and CLSA will attempt to first execute a portion of
the first order then the subsequent smaller order, and ensure fair allocation in the quantities
executed for each order as much as possible.
In other cases where CLSA has to work on a number of large Customer orders over a periodof time, and the market is illiquid and/or the market/price is volatile, it may in the overall bestinterests of all Customers amalgamate all comparable Customers’ orders for execution.
CLSA will ensure fair allocation (such as an average execution price to all Customers) toeach Customer at the end of the day. CLSA will not amalgamate a Customer order with aprincipal order.

2.8

Execution Venues/Brokers
CLSA may utilize various Execution Venues/brokers when executing Customers’ orders
and will endeavor to execute in the manner that is able to provide the best outcome for the
Customers, unless directed by the Customer to execute on a particular venue or with aparticular broker.
CLSA will monitor which Execution Venues/brokers are likely to provide, on a consistentbasis, the best available terms for our Customers in meeting its Best Execution obligations.
Where there may only be one Execution Venue available and in executing a trade in suchcircumstances, CLSA will assume that the selection of that venue satisfies the Best
Execution factor dealing with venue selection.
Where possible, CLSA will execute through affiliate brokers to enable it to meet the Best
Execution requirements on a consistent basis. Where it is not feasible to use affiliate
brokers, the selection of a third party broker is done through an internal due diligenceprocess, to ensure that the third party broker has the skills, resources and capabilities toassist in the Best Execution outcome of the Customers’ trades, and periodic/ongoing due
diligence will be conducted thereafter.

2.9

Payment for Order Flow (“PFOF”)

BEST EXECUTION POLICY – SINGAPOREPFOF refers to commissions or other forms of payment that CLSA may receive from anotherbroker or counterparty in return for routing customers’ orders to that broker or counterparty.
CLSA is not allowed to receive PFOF where Best Executions are owed to customers under
the MAS Notice, as the PFOF may introduce conflicts of interest that is inconsistent withBest Execution obligations owed to customers.
As such, in cases where CLSA uses a third party broker/counterparty to execute its
customer orders, CLSA is not allowed to enter into commission rebates/soft dollar
agreements or any other similar forms of agreements with such broker/counterparty inreturn for routing its customers’ orders to that broker/counterparty for execution.

3.

MONITORING AND CONTROL MECHANISMSCLSA is required to monitor, on a periodic basis: (i) compliance with its Best Execution
policies and procedures; and (ii) the effectiveness of its Best Execution policies andprocedures.
This obligation has been incorporated into CLSA’s monthly Compliance Monitoring
Programme and relevant business procedures and policies. In particular, CLSA considers
price to be the most important execution factor and Compliance monitoring is performed bycomparing execution prices of Customers against the Volume Weighted Average Price inthe market, to detect any significant or systematic deviations in the execution price provided
to the Customers vis-à-vis other Execution Venues or brokers.
All Customer’s complaints in relation to the order handling of CLSA from a Best Execution
perspective should be directed to the Singapore Compliance team for independent handlingand further inquiry/investigation as required.

4.

REVIEW OF POLICY AND TRAINING
CLSA will review this policy at least annually, or whenever there is a material change (suchas a regulatory change or change in business model/product) that could affect its Best
Execution obligations.
CLSA will provide all relevant trading and execution staff with periodic training to ensurethat they remain apprised of their Best Execution obligations.

5.

CUSTOMER DISCLOSURE

BEST EXECUTION POLICY – SINGAPORE
CLSA is required to provide to Customers in writing, including via electronic means,sufficient information on its Best Execution policies and procedures.
Consistent with the existing business arrangements with Customer on customer disclosure,
this policy will be uploaded on the terms of business page of CLSA’s corporate website.
Whenever CLSA makes any material changes to this policy, an updated version of thispolicy will be uploaded on the CLSA’s website accordingly.

6.

RELEVANT CLSA COMMITTEESThe CLSA board of directors has delegated the responsibility to an appropriate local
management committee, comprising of the CEO of CLSA/Singapore country head,
Singapore COO and Regional Head of Legal and Compliance to approve this policy andany other subsequent reviews/updates to the policy,
On a day-to-day basis, the first line of defence resides with the relevant sales
traders/trader/dealers who handle the Customers’ orders to assess the relevant execution
factors and handle the orders effectively, to ensure that CLSA fulfills its Best Execution
obligations to its Customers.
As a second line of defence, Compliance will perform monthly monitoring as set out in
Section 3 above. Where it is suggested that CLSA might have not fulfilled its Best Execution
obligations to its Customers, Compliance will conduct independent investigations andescalate accordingly to CLSA management.
In addition to the above, quarterly Best Execution committee meetings are held at the CLSA
group level to review and consider any findings or escalation in relation to the Best
Execution requirements. Senior representatives from the respective business lines andLegal & Compliance are members of the Best Execution committee.
As a third line of defence, the Internal Audit department will undertake periodic audits which
may include a review of CLSA’s Best Execution policies and procedures, and report to the
CLSA management any deficiencies that have been identified and to makerecommendations on improvements.