Master Agreement for OTC Derivative Transactions

Transcription

1 Wealth and Investment Management Master Agreement for OTC Derivative Transactions (Including Derivatives Risk Disclosure Statement)

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3 DERIVATIVES RISK DISCLOSURE STATEMENT The services provided by or through Barclays Bank PLC, acting through its Singapore branch (if your account is booked in Singapore) or its Hong Kong branch (if your account is booked in Hong Kong) (the Bank ), cover dealings in derivatives such as futures, options and contracts for differences and any relevant strategies and combinations with or without spot transactions. A derivative is a financial contract whose value is designed to track the return on or is derived from currencies, interest rates, securities, bonds, money market instruments, agricultural and energy products, metals and other commodities, financial instruments, reference indices or other benchmarks. If your account is booked in Hong Kong or you are serviced by relationship managers in Hong Kong, the services provided by or through the Bank to you will not cover dealings in futures contracts. The intention of this Derivatives Risk Disclosure Statement is to inform you that the risk of loss in derivative transactions may be substantial in certain circumstances. You should not deal in them unless you understand the nature of the transactions you are entering into and the extent of your exposure to risk. You should also carefully consider whether, and be satisfied that, the transactions are suitable for you in light of your circumstances and financial position. In considering whether to trade, you should also be aware of the following: A. GENERAL RISKS IN RELATION TO DERIVATIVES OPTIONS OPTIONS An option is a contract whereby the owner of the option has the right, but not the obligation, to purchase or sell an asset at a fixed price on or until a specific date. There are many different types of options with different characteristics. Transactions in options carry a high degree of risk. You should familiarise yourself with the type of option (i.e. put or call) that you contemplate trading and the associated risks. You should calculate the extent to which the value of the option must increase for your position to become profitable, taking into account the premium and all transaction costs. Buying Options Buying options involves less risk than selling or writing options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission and other transaction charges. If you allow the option to lapse, you will suffer a total loss of your investment, which will consist of the premium plus any commission and other transaction charges. The exercise of an option results either in a cash settlement or in the purchaser acquiring or delivering the underlying asset or interest. If you buy a call option on an underlying asset or interest and later exercise the option, you will acquire the underlying asset or interest and therefore expose yourself to the risks on the underlying asset or interest. For example, if you buy a call option on a futures contract, and you later exercise the option, you will acquire the futures contract with the associated liabilities for margin. This will expose you to the risks associated with futures contracts, including those described in this Derivatives Risk Disclosure Statement. If you are contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of such options becoming profitable ordinarily is remote. Writing or Selling Options If you write or sell an option, the risk is considerably greater than if you buy an option. Although the premium you receive is fixed, you may sustain a loss well in excess of that amount. You may be liable for margin to maintain your position. You will be exposed to the risk of the option being exercised and, if the option is exercised, you will be obligated either to settle the option in cash or to acquire or deliver the underlying interest. If you sell a put option on a futures contract and the option is exercised, you will be required to acquire a position in a futures contract with the associated liabilities for margin. This will expose you to the risks associated with futures contracts, including those described in this Derivatives Risk Disclosure Statement. An option will be known as a Covered Call Option if you hold the underlying asset, interest or futures contract or have a corresponding position in the underlying asset, interest or futures contract, in which case the risk may be reduced. If you do not hold the underlying asset, interest or futures contract and do not have a corresponding position in the underlying asset, interest or futures contract, the option is known as an Uncovered Call Option, and the risk can be unlimited. Only experienced persons should contemplate selling Uncovered Call Options, and then only after securing full details of the applicable conditions and potential risk exposure. Risk of Trading in Futures and Options The risk of loss in trading futures contracts or options is substantial. In some circumstances, you may sustain losses in excess of your initial margin funds. Placing contingent orders, such as stop-loss or stoplimit orders, will not necessarily avoid loss. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated and you will remain liable for any resulting deficit in your account. You should therefore study and understand futures contracts and options before you trade and carefully consider whether trading is appropriate for you in light of your own financial position and investment objectives. If you trade options you should also inform yourself of exercise and expiration procedures and your rights and obligations upon exercise or expiry. Transactions in futures carry a high degree of risk. The amount of initial margin is small relative to the value of the futures contract so that transactions are leveraged or geared. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit: this may work against you as well as for you. You may sustain a total loss of initial margin funds and any additional funds deposited with the Bank to maintain your position. If the market moves against your position or margin levels are increased, you may be called upon to pay substantial additional funds on short notice to maintain your position. If you fail to comply with a request for additional funds within the time prescribed, your position may be liquidated at a loss and you will be liable for any resulting deficit. This brief Derivatives Risk Disclosure Statement does not disclose all of the risks and other significant aspects of trading in futures and options. In light of the risks, you should undertake such transactions only if you understand the nature of the contracts (and contractual relationships) into which you are entering and the extent of your exposure to risk. Trading in futures and options is not suitable for many members of the public. You should therefore study and understand futures contracts and options before you trade and carefully consider whether such trading is appropriate for you in light of your experience, objectives, financial resources and other relevant circumstances. OFF EXCHANGE OR OVER THE COUNTER ( OTC ) TRANSACTIONS Transactions subject to this Agreement will be off-exchange. While some off-exchange markets are highly liquid, transactions in off-exchange, over the counter or non-transferable derivatives may involve greater risk than investing in on-exchange derivatives because there is no exchange market on which to close out an open position. It may be impossible to liquidate an existing position, to assess the value of the position arising from an off-exchange transaction or to assess the exposure to risk. Bid prices and offer prices need not be quoted, and even where they are, they will be established by dealers in these instruments and consequently it may be difficult to establish what is a fair price. Before you undertake such transactions you should familiarise yourself with the applicable rules and attendant risks. FOREIGN CURRENCY RISKS The profit or loss on transactions in foreign currency-denominated contracts (whether they are traded in your own or another jurisdiction) will be affected by fluctuations in currency exchange rates where there is a need to convert from the currency denomination of the contract to another currency. If you enter into currency option transactions you are exposed to risks that exchange rates may significantly change (including changes due to devaluation of one of the underlying currencies) and the risk that authorities with jurisdiction over one of the underlying currencies may impose or modify exchange controls. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. 1

4 EMERGING MARKETS Investments in emerging markets investment instruments need careful and independent assessment by you of each investment and the risks (including without limitation sovereign risk, issuer risk, price risk and liquidity risk). Further you should be aware that, while such investments can yield high gains, they can also be highly risky as the markets are unpredictable and there may be inadequate regulations and safeguards available to investors. SUSPENSION OR RESTRICTION OF TRADING AND PRICING RELATIONSHIPS Market conditions (e.g. illiquidity) and/or the operation of the rules of certain markets (e.g. the suspension of trading in any contract or contract month because of price limits or circuit breakers ) may increase the risk of loss by making it difficult or impossible to effect transactions or liquidate/offset positions. If you have sold options, this may increase the risk of loss. Further, normal pricing relationships between the underlying interest and the futures, and the underlying interest and the option may not exist. This can occur when, for example, the futures contract underlying the option is subject to price limits while the option is not. The absence of an underlying reference price may make it difficult to judge fair value. CONTRACTS FOR DIFFERENCES Some derivative transactions can also be referred to as contracts for differences which provide for adjustment between the parties based on the respective value or levels of certain assets or reference indices at the time of the contracts and at an agreed future time. These can be options on the Hang Seng Index or any other index, as well as commodities, securities, currencies and interest rate swaps, etc. However, unlike other options, these contracts can only be settled in cash. Investing in a contract for difference carries the same risk as investing in an option and you should be aware of these as set out under Options above. Transactions in Contracts for Differences may also have a contingent liability and related margin requirements and you should be aware of the implications of this as set out under Margin below. MARGIN Transactions that are margined require you to make a series of payments against the purchase price instead of paying the whole purchase price immediately. The risk of loss in financing a transaction by deposit of collateral is significant. You may sustain losses in excess of your cash and any other assets initially deposited as collateral with the Bank and any additional margin that you deposit to establish a position or to maintain a position in the relevant market. Market conditions may make it impossible to execute contingent orders, such as stop-loss or stop-limit orders. You may be called upon at short notice to make additional margin deposits or interest payments. If the required margin deposits or interest payments are not made within the prescribed time, your collateral may be liquidated without your consent. Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account. You should therefore carefully consider whether such a financing arrangement is suitable in light of your own financial position and investment objectives. The use of leverage can lead to large losses as well as gains. Even if a transaction is not margined, it may still carry an obligation to make further payments in certain circumstances over and above any amount paid when you entered into the transaction. The high degree of leverage that is often obtainable in derivative transaction trading because of the small margin requirements can work against you as well as for you. LIQUIDATION OF POSITION Under certain market conditions, you may find it difficult or impossible to liquidate a position. SPREAD POSITION Strategies using combinations of positions, such as spread and straddle positions, may be as risky as taking simple long or short positions. RISK OF SECURITIES TRADING The prices of securities fluctuate, sometimes dramatically. The price of a security may move up or down, and may become valueless. It is as likely that losses will be incurred rather than profit made as a result of buying and selling securities. RISK OF TRADING IN LEVERAGED FOREIGN EXCHANGE CONTRACTS The risk of loss in leveraged foreign exchange trading can be substantial. You may sustain losses in excess of your initial margin funds. Placing contingent orders, such as stop-loss or stop-limit orders, will not necessarily limit losses to the intended amounts. Market conditions may make it impossible to execute such orders. You may be called upon at short notice to deposit additional margin funds. If the required funds are not provided within the prescribed time, your position may be liquidated. You will remain liable for any resulting deficit in your account. You should therefore carefully consider whether such trading is suitable in light of your own financial position and investment objectives. SWAPTIONS A swaption is a contract whereby the owner of the option has the right, but not the obligation, to cause a specified underlying swap transaction to become effective as between the buyer and the seller of the swaption, or to cause a payment to be made by reference to the value of that underlying swap transaction. The risks associated with options (including those described above) apply equally to swaptions. If you enter into a physically settled swaption with the Bank and the swaption is exercised, the underlying swap transaction shall become effective between you and the Bank, and you may become liable to deposit margin with the Bank. RISK OF BASE METALS AND BULLION TRADING Political and Economic Risks Base metals, such as copper, lead, zinc, tin, nickel and aluminium and Bullion such as gold, silver, platinum and palladium are often produced in emerging market countries and used by industrialised nations. Those emerging market countries are by definition in transformation and they are therefore more exposed to the risk of swift political change and economic downturns than their industrialised counterparts. There can be no assurance that future political changes will not adversely affect the economic conditions of an emerging market country. Political or economic instability may affect investor confidence, which could in turn have a negative impact on the value of such commodities. Highly Volatile Markets Base metal prices and Bullion prices are highly volatile. Price movements in the kinds of base metals by reference to which the Bank will determine a Commodity Reference Price and the types of Bullion by reference to which the Bank will determine a Bullion Reference Price (both as defined in Annex D) are influenced by, among other things, interest rates, changing market supply and demand relationships, trade, fiscal, monetary and exchange control programmes and policies of governments, and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly those in currencies and commodities. Such intervention is often intended directly to influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. In relation to any Commodity Transactions or Bullion Transactions, you should be aware that due to the volatility of the base metals and precious metals markets, a loss may be incurred from transacting in base metals or in Bullion. Due to their fluctuating nature, the prices of base metals and of Bullion may rise or fall beyond your expectations and your investment funds may increase or decrease in value as a result of selling and purchasing these. Before making any investment decision, you should assess your own willingness and ability to bear risks and are advised to seek advice from an independent financial adviser. You should also note that neither base metals nor Bullion bear interest. Price Sources The Bank may on any day be unable to determine a Commodity 2

5 Reference Price or a Bullion Reference Price from the Price Source, due to market conditions including but not limited to (i) market volatility; (ii) market liquidity (as discussed below); (iii) regulatory or artificial market limitations; and (iv) the occurrence of a Market Disruption Event (as defined in Annex D). In these circumstances the Bank will make the relevant determinations in accordance with the provisions of Annex D. Liquidity Risk Commodities and Bullion may be difficult to buy or sell, particularly during adverse market conditions. This will affect the ability of the Bank to determine a Commodity Reference Price or a Bullion Reference Price in respect of any day. Bullion-specific Risks The Bullion markets are subject to numerous factors that interrelate in complex ways which might cause, increase or reduce price volatility, including but not limited, to: (a) (b) disruptions in the supply chain, from mining to storage to smelting or refining; adjustments to inventory; (c) variations in production costs, including storage, labour and energy costs; (d) Costs associated with regulatory compliance, including environmental regulations; (e) (f) (g) (h) (i) changes in industrial, government and consumer demand, both in individual consuming nations and internationally; Precious metal leasing rates; currency exchange rates; level of economic growth and inflation; and degree to which consumers, governments, corporate and financial institutions hold any type of physical Bullion as a safe haven asset (hoarding) which may be caused by a banking crisis/recovery, a rapid change in the value of other assets (both financial and physical) or changes in the level of geopolitical tension, and as such there is the possibility that a loss will be incurred from an investment or holding in Bullion. B. RISKS SPECIFIC TO OTC DERIVATIVE TRANSACTIONS You expressly recognise and acknowledge that the transactions will be entered into over-the-counter, meaning off-market. You expressly acknowledge that you have read and understood the document entitled General Risk Disclosure Statement, which forms an integral part of the Bank s Hong Kong and Singapore Terms, and that you fully understand the nature, scope and consequences of each transaction as well as the extent of your exposure to risk resulting from such transactions. You acknowledge that the conclusion of transactions may not be suitable for many members of the public. You should accordingly carefully consider, and assess in your own judgment, whether the conclusion of transactions is appropriate for you in light of your own experience, objectives, financial resources and other relevant circumstances. In particular, you take note of the following: 1. Market Risk: Your payments and/or receipts in respect of a transaction are linked to changes in the value of one or more financial or commodity market prices, rates or indices. In particular, you recognise that you may suffer significant losses in a transaction both in terms of (i) the amounts you pay under the terms of the transaction being greater than the amounts you receive and (ii) the amount it might cost you to unwind such a transaction before its stated maturity. Market risk is accentuated in transactions involving leverage. The Bank and/or its Affiliates are engaged in client-driven and proprietary activities in many markets and those general activities, as well as their hedging activity relating to a specific transaction can adversely affect the value of that transaction from your point of view. 2. Credit Risk: Any transaction which requires us to make payments to you will expose you to our credit risk (as opposed to the credit risk of a central clearing corporation as would generally be the case with exchange-traded futures and options). 3. Liquidity Risk: A transaction generally cannot be assigned, transferred or terminated without the consent of the other party, and typically that other party is not legally or contractually obliged to give its consent. It therefore may be impossible for you to liquidate a transaction before its stated maturity date. 4. Price Risk: Because the prices and characteristics of transactions are individually negotiated and there is no central source for obtaining prices from competing dealers, there can be inefficiencies in transaction pricing. The Bank makes no representation or warranty that prices will always be the best prices available to you. The Bank may make a profit from a transaction with you no matter what result the transaction has from your point of view. 5. Risk of Conflict of Interest: You recognise that the Bank and/ or its Affiliates may at any time enter or have entered into other contracts with or for other parties including, without limitation, contracts for the purpose of hedging or for any other purpose, contracts which may result in the Bank and/or its Affiliates holding a potentially opposing position to yours in respect of a transaction, that the Bank may also therefore gain a profit, charge or remuneration for itself and/or its Affiliates, and that in such cases the Bank and/or its Affiliates shall not be liable to account or specifically disclose to you either the fact of such contracts or any such profit, charge or remuneration made or received by the Bank and/or its Affiliates from any such contract or other related contract. You agree that unless otherwise expressly specified in a transaction advice, confirmation or contract note, the Bank shall be deemed to be acting in all respects as principal for the purpose of each transaction entered into by you; however, this will not prevent or restrict the Bank (in its sole discretion but without any obligation to do so) from simultaneously or any other time acting as principal or agent for the purposes of any other contracts (whether for hedging purposes or otherwise) with or for any other party, including contracts which may involve a potentially opposing position to yours in respect of a transaction. ACKNOWLEDGEMENT You understand and agree that the brief Derivatives Risk Disclosure Statement above cannot disclose all the risks and other significant aspects of the derivatives market and you should therefore carefully study derivative transactions before you trade. In particular, you understand and acknowledge that in respect of services rendered to you by the Bank on a non-discretionary basis: (a) (b) (c) you have read and understood the nature and contents of the risk disclosures which are contained in this Derivatives Risk Disclosure Statement; except where expressly agreed otherwise, you are acting on your own account and have reviewed carefully your specific financial needs and investment objectives before entering into any transaction, and you have made your own independent decision to enter into any transaction and as to the legality, suitability and appropriateness of any transaction based upon your own judgment and upon advice from such advisers as you have deemed necessary; except where expressly agreed otherwise, you confirm that neither the Bank, nor any Affiliate of the Bank, is acting as a fiduciary for or an adviser to you in respect of any transaction; (d) unless expressly agreed otherwise, you are not relying on any communication (written or oral) from the Bank or from any Affiliate of the Bank as investment advice or as a recommendation to enter into any transaction and you understand that the information and explanations of the terms of any transaction as contained in any confirmation shall not be considered to be investment advice or a recommendation to enter into such transaction; and (e) in the absence of express agreement to the contrary, if the Bank makes any suggestions, it assumes no responsibility for your portfolio or for any investment or transaction which you have entered into. No communication (written or oral) received from the Bank or from any Affiliate of the Bank shall be deemed to be an assurance or guarantee as to the expected results of any transaction. 3

6 This Derivatives Risk Disclosure Statement is subject to the Agreement as amended or supplemented from time to time. This Derivatives Risk Disclosure Statement, together with the Agreement and (for the avoidance of doubt) any Confirmation (as defined in the Agreement) shall form a single agreement between you and the Bank. Words and phrases defined in the Agreement shall have the same meanings as in the Agreement (save where otherwise expressly provided herein) for the purposes of this Derivatives Risk Disclosure Statement. You should be aware that any agreements or terms and conditions which you have executed or which are applicable to your transactions will remain valid and binding on you. 4

7 ACKNOWLEDGEMENT BY CLIENT I/We hereby acknowledge that I/we have received a copy of this Derivatives Risk Disclosure Statement in the language of my/our choice and that I/we have read, understood and accepted its nature and contents. I/We also appreciate that it is not and cannot be taken as a comprehensive or exhaustive list of all possible risks. I/We further confirm that I/we have been given the opportunity to ask questions and to take independent professional advice if I/we so wished. In the event of any inconsistency between the English version of this document and any translation, the English version will prevail. I/we acknowledge that if I/we am/are in any doubt as to the meaning of the English language version or the accuracy of any translation, I/we should seek independent advice before signing. Account booked to: Barclays Bank PLC, Singapore Branch Account Number : Barclays Bank PLC, Hong Kong Branch Account Number : (tick one box only, as appropriate) 5

8 Client Signatures For individuals and joint account holders: (All joint account holders must sign below) Date: 1 st Account Holder 2 nd Account Holder Client signature: * By signing below, I hereby freely, irrevocably and unconditionally approve, acknowledge and give consent to my spouse to enter into this document and I, whether now or in future, shall accept agree and ratify all action(s) taken by my spouse in connection with this document. My approval and consent is irrevocable and shall continue notwithstanding any subsequent amendments, changes or modifications to this document and the execution of any other document supplemental or incidental thereto:- Spouse signature: as spouse of Client signature: * By signing below, I hereby freely, irrevocably and unconditionally approve, acknowledge and give consent to my spouse to enter into this document and I, whether now or in future, shall accept agree and ratify all action(s) taken by my spouse in connection with this document. My approval and consent is irrevocable and shall continue notwithstanding any subsequent amendments, changes or modifications to this document and the execution of any other document supplemental or incidental thereto:- Spouse signature: as spouse of Client signature: 3 rd Account Holder * By signing below, I hereby freely, irrevocably and unconditionally approve, acknowledge and give consent to my spouse to enter into this document and I, whether now or in future, shall accept agree and ratify all action(s) taken by my spouse in connection with this document. My approval and consent is irrevocable and shall continue notwithstanding any subsequent amendments, changes or modifications to this document and the execution of any other document supplemental or incidental thereto:- Spouse signature: as spouse of Client signature: 4 th Account Holder * By signing below, I hereby freely, irrevocably and unconditionally approve, acknowledge and give consent to my spouse to enter into this document and I, whether now or in future, shall accept agree and ratify all action(s) taken by my spouse in connection with this document. My approval and consent is irrevocable and shall continue notwithstanding any subsequent amendments, changes or modifications to this document and the execution of any other document supplemental or incidental thereto:- Spouse signature: as spouse of * only applicable if you are a citizen of Indonesia, the Philippines or Thailand or domiciled in Indonesia, the Philippines or Thailand ^only applicable to Chinese Clients. This document must be signed outside of China and the place of signing (outside China) and the date of signing must be specified. For the purposes of this document China excludes Hong Kong, Macau and Taiwan. 6

9 For companies and corporate trustees: Date: Signed by the Authorised Signatories, for and on behalf of: (Name of Company or trustee): (as trustee for and on behalf of) (name of trust): (if applicable) Signatures of Authorised Signatories: By: By: By: By: DECLARATION BY RELATIONSHIP MANAGER I have provided this Derivatives Risk Disclosure Statement to the above-named Client in the language of the Client s choice and have invited the Client to read it, ask questions and take independent professional advice before signing. Further, I have drawn the relevant risks to the attention of the Client. Signature Full Name (in BLOCK letters) (CE Number, if applicable: ) Date: ^only applicable to Chinese Clients. This document must be signed outside of China and the place of signing (outside China) and the date of signing must be specified. For the purposes of this document China excludes Hong Kong, Macau and Taiwan. 7

10 MASTER AGREEMENT FOR OTC DERIVATIVE TRANSACTIONS PART 1 GENERAL 1. Purpose and Structure of Agreement Barclays Bank PLC, acting through its Singapore branch (if your account is booked in Singapore) or its Hong Kong branch (if your account is booked in Hong Kong) anticipates entering into one or more Transactions with you. These may include Equity Option Transactions in accordance with Annex B of Part 2, Interest Rate Swap Transactions in accordance with Annex C of Part 2, Commodity Transactions or Bullion Transactions in accordance with Annex D of Part 2, Bond Option Transactions in accordance with Annex E of Part 2, FX Transactions and Currency Option Transactions in accordance with Annex F of Part 2 and any other Transactions which we may agree shall be governed by this Agreement. 1.1 Single Agreement. All Transactions are entered into in reliance on the fact that this Agreement, including the Derivatives Risk Disclosure Statement and all Confirmations will together form a single agreement between you and us (collectively referred to as this Agreement), and that neither we nor you would otherwise enter into any Transactions. 1.2 Transactions. The specific terms of each Transaction shall be recorded in a Confirmation (as defined below), which shall be governed by the general terms and conditions contained in Part 1 of this Agreement and the applicable Annex(es) to this Agreement (as contained in Part 2 of this Agreement). 1.3 Inconsistency. This Agreement supplements (a) the account opening documentation of the Bank (including without limitation any document entitled Hong Kong and Singapore Terms (the Hong Kong and Singapore Terms ) and (b) any Security Document. If there is any inconsistency between the provisions of this Agreement and any Confirmation, such Confirmation shall prevail for the purposes of the relevant Transaction. If there is any inconsistency between (a) the provisions of this Agreement, and/or any Confirmation and (b) any other agreement, this Agreement and/or the relevant Confirmation shall prevail for the purposes of the relevant Transaction. If there is any inconsistency between Part 1 of this Agreement and any Annex applicable to a Transaction, such Annex shall prevail for the purposes of such Transaction. 1.4 Definitions In this Agreement: Business Day refers to a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets are open for business in the place(s) specified in the Confirmation or if not specified, in the places selected by us in good faith in a commercially reasonable manner, including based on market practice for the type of action or payment to take place or be effected on such day; Calculation Agent means, in respect of each Transaction, Barclays Bank PLC, Singapore branch (if your account is booked in Singapore) or its Hong Kong branch (if your account is booked in Hong Kong), who shall make all calculations and determinations in respect of this Agreement and all Transaction thereunder; Collateral refers to any and all of the investments and other assets held subject to the Security Documents or required by us from time to time; Confirmation refers to any confirmations which may be issued by us as a record of the terms of any Transaction, as may be amended or replaced from time to time; Designated Event with respect to you means that: (a) you consolidate or amalgamate with or merge with or into, or transfer all or substantially all of your assets (or any substantial part of the assets comprising the business conducted by you as of the date of this Agreement and/or any Transaction thereunder) to, or receive all or substantially all the assets or obligations of, another entity or reorganise, reincorporate or reconstitute into or as another entity; or (b) any person or related group of persons or entity acquires directly or indirectly the beneficial ownership of (i) equity securities having the power to elect a majority of the board of directors (or its equivalent) of you or (ii) any other ownership interest enabling it to exercise control of you; or (c) you effect any substantial change in you capital structure by means of the issuance, incurrence or guarantee of or the issuance of (i) preferred stock or other securities convertible into, or exchangeable for, debt or preferred stock; or (ii) in the case of entities other than corporations, any other form of ownership interest. Potential Event of Default means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default; Security Document means: (a) the Charge over Investment Portfolio and Credit Balances pursuant to which you have pledged in our favour all your rights, title and interest in respect of any amount standing to the credit of your account with us, and any other assets specified in such document; (b) any real property mortgage under which you have granted security to us over all your right, title and interest in and to any real property specified in such real property mortgage; (c) any agreement entitled Credit Terms and Conditions if one or more agreements entitled Facility Letter have been signed thereunder; (d) any Facility Letter; (e) any agreement entitled Margin Service Application ; and (f) any other security document under which you have granted a security interest to us in respect of any of your other assets, in each case as security for your obligations to us under this Agreement or generally; Subject to the terms of any Annex of this Agreement and/or any relevant Confirmation that is applicable to such Transaction, Settlement Date or Value Date refers to, in relation to any Transaction, each day specified in the relevant Confirmation for payment of any amount under that Transaction; If such date is not a Business Day, it shall be adjusted in accordance with the applicable Business Day Convention (as defined in Part 2 of this Agreement) as specified in the relevant Confirmation; Termination Currency means, in relation to any calculation of the Close-Out Amount upon any termination of an outstanding Transaction under clauses 11 and 12 of this Part 1, the currency into which such Close-Out Amount shall be converted and which shall be such currency as you and we may agree (whether in a Facility Letter, loan agreement or other document) but in the absence of such further agreement shall be United States Dollars; Termination Currency Equivalent means the amount of any Close-Out Amount or Unpaid Amount, denominated in any currency other than the Termination Currency, converted by us in our sole and absolute discretion to an equivalent amount expressed in the Termination Currency; Transaction means on any day (a) where an ISDA Master Agreement (in any form) has been executed between you and us, any over-the-counter derivative transaction concluded by you with us, whether orally or otherwise, as may be subsequently confirmed by us to you in writing in any Confirmation of such transaction, provided that such Confirmation (if any) does not expressly exclude the application of the terms of such ISDA Master Agreement or (b) where no ISDA Master Agreement (in any form) has been concluded by you and us, any over-the-counter derivative transaction concluded by you with us, whether orally or otherwise, as may be subsequently confirmed by us to you in writing in any Confirmation in respect of such transaction, provided that such Confirmation (if any) does not (i) expressly exclude the application of the terms of this Agreement thereto and/or (ii) expressly apply the terms of a different master derivatives agreement (or deemed master derivatives agreement) in respect of over-thecounter derivative transactions thereto, in which case Transaction shall bear the meaning given to it in such Confirmation; and Transaction Currency means, in relation to a payment obligation under any Transaction, the currency in which such payment obligation is denominated, as specified in the Confirmation in respect of a Transaction and/or this Agreement. We, us and our refer to Barclays Bank PLC, acting through its Singapore branch (if your account is booked in Singapore) or its Hong Kong branch (if your account is booked in Hong Kong) (also referred to as Barclays or the Bank ) and Affiliate refers to (i) any entity controlled, directly or indirectly, by us, (ii) any entity that controls us, whether directly or indirectly, or (iii) any entity, directly or indirectly, under common control with us, where control of any entity means ownership of a majority of the voting power of such entity; and you, your and yours and the Client refer to you, the client(s) (which include a corporate body, partnership or association), who enter into this Agreement with the Bank. 1.5 Where the expressions you, your and yours consist of two or more persons, all agreements, obligations, powers, authorities and liabilities on your part in connection with this Agreement shall be joint and several. An obligation to notify you arising pursuant to the terms of this Agreement (if any) shall be discharged by notification to any one of you. Without affecting our rights and remedies against any of you, we may compound or vary the liability of or grant time or other indulgence to any of you. 1.6 As used here, the singular or plural number shall each be deemed to include the other unless the context otherwise indicates. 2. Instructions, Notices and Correspondence 2.1 Any oral or written instructions received by us in respect of any Transaction and identified as to proper authority to our satisfaction shall be deemed to be your proper and duly authorised instructions and shall be binding on you, and we shall not be liable for acting upon such instructions even if such instructions contain an error or are not authentic or duly authorised. 2.2 You agree that Barclays may record all telephone calls and retain all written correspondence (including, but not limited to s) relating to this Agreement and all Transactions entered into under this Agreement. You agree to the use of such correspondence (including any attachments or annexures thereto), recordings and transcripts of such recordings by us as evidence in any actions, proceedings or disputes between you and us. We shall not be required to maintain copies of such correspondence (including any attachments or annexures thereto), recordings and transcripts beyond the time period prescribed under applicable laws, rules or regulations. 2.3 Any notice or communication sent by us in respect of this Agreement and/ or any Transaction may be sent by any means that we shall in our sole discretion 8

11 determine, and any such notice shall be deemed to have been received by you, and to be effective, on the date that it is sent by us. 3. Statements of Account and Confirmations 3.1 You will be sent Statements of Account ( Statements ) in accordance with the Hong Kong and Singapore Terms, and these will detail any Transactions entered into by you with us. 3.2 We will send you a Confirmation promptly after entering into a Transaction (but failure to send a Confirmation will not constitute an Event of Default on our part). Each Confirmation constitutes a supplement to and forms an integral part of this Agreement. 3.3 You undertake to verify the correctness of each Statement or Confirmation and to inform us within 14 days from the receipt of any Statement or Confirmation of any discrepancies, omissions or debits wrongly made to, or inaccuracies or incorrect entries in, the account or in the particulars of the Statement or Confirmation. After 14 days, the account as kept by us and the details contained in the Statement or Confirmation shall be conclusive evidence against you without any further proof that the entries in the account and the details contained in the Statement or Confirmation are correct except as to (i) any alleged errors which you have already brought to our attention and (ii) any payments made on forged or unauthorised endorsements, subject to our right to adjust (which may be exercised by us at any time at our entire discretion) any entries in the account or details contained in the Statement or Confirmation where they have been wrongly or mistakenly made by us. 3.4 Except as provided above, we shall be free from all claims in respect of the account and the particulars of the Transaction contained in the Statement or Confirmation, notwithstanding any discrepancies, omissions or debits wrongly made to, or inaccuracies or incorrect entries in, the account, Statement or Confirmation as so stated, whether made, processed or paid out as a result of forgery, fraud, lack of authority, negligence or otherwise by any person whatsoever. 3.5 Any Statement or Confirmation or other documents to be given to you shall be validly given if despatched to you in accordance with your contact details last registered with us, and shall be deemed to have been received by you within a generally acceptable time for that means of communication. If you are a retain mail client, you agree that we may deem that you have received every such Statement, Confirmation or document at the date shown in the copy in the possession of the Bank, and that clauses 3.1 to 3.4 of this Part 1 will apply equally from the date of such deemed receipt. 3.6 Information on the estimated current status of your Transactions may also be contained in our Statement issued to you. If you require an interim update, please contact your Relationship Manager. You hereby acknowledge and agree that any information which we provide pursuant to this clause 3.6 whether in a Statement or otherwise shall only be treated as our estimated assessment of the current status of your Transactions and we shall not be liable for any discrepancies, omissions or inaccuracies between such information provided and the actual status of your Transactions, nor will any price or valuation given under this clause 3.6 constitute an offer to trade or unwind a transaction at such price or valuation. 4. Fees and Costs 4.1 All services will be charged in accordance with our then prevailing rate for the relevant service and shall be debited from your account in accordance with the Hong Kong and Singapore Terms. 4.2 Charges, commissions or fees may be included in the price or rate for the Transactions quoted to you or which are concluded with you. You understand that we may also receive remuneration from any of our Affiliates or from any other counterparty on a portion of such charges, commissions or fees and that we will retain such rebates as part of our compensation. 4.3 All costs and expenses (including legal costs and costs for hedging or similar contracts) incurred by us in connection with the preservation, protection or enforcement of our rights in connection with this Agreement shall be reimbursed by you upon our demand. 5. Payments 5.1 Each party will make each payment or deliver the assets (according to the terms of each Transaction) on the relevant Settlement Date, subject to the other provisions of this Agreement. 5.2 Each of the Bank s obligations under clause 5.1 of this Part 1 is subject to (i) the condition precedent that no Event of Default or Potential Event of Default with respect to you has occurred and is continuing, (ii) the condition precedent that no Early Termination Date has been effectively designated by us in respect of the relevant Transaction and (iii) any other condition as may be specified in this Agreement to be a condition precedent for the purposes of this clause All payments to be made to each party under any Transaction shall be made in the Transaction Currency in immediately available funds, (in the case of payments to us) to us at such account as we may by notice specify, and (in the case of payments to you) to you at your account with us or to such other account as agreed by us. 5.4 All sums payable by you under the Agreement shall be paid in full without set-off or counterclaim or any restriction or condition. 5.5 You irrevocably authorise us to apply amounts in your name in whatever currency on deposit or account with us or with any of our branches (whether or not matured) in reduction of amounts due by you under this Agreement. 5.6 Without prejudice to the survival of any other provision of this Agreement, your agreements and obligations contained in clauses 5.1 to 5.5 of this Part 1 shall survive the payment in full of any amount due under this Agreement or under any Confirmation or document in respect of this Agreement. 6. Taxation 6.1 (a) All payments in respect of any Transaction under this Agreement will be made free and clear of and without withholding or deduction for or on account of any present or future taxes (including without limitation goods and services tax, levies, imposts deductions, charges, and all liabilities with respect to any such present or future taxes, excluding taxes imposed on net income (all such nonexcluded taxes hereinafter referred to as Taxes ). If you are or become required by law to make any such withholding or deduction from any payment in respect of any Transaction under this Agreement, then you shall pay to us, in addition to the payment to which we are otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by us will equal the full amount we would have received had no such deduction or withholding been required. (b) In addition, you agree to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made under this Agreement or from the execution, delivery or registration of, or otherwise with respect to, any Confirmation or document delivered in respect of this Agreement (hereinafter referred to as Other Charges ). (c) You will indemnify us for the full amount of Taxes or Other Charges (including without limitation any Taxes or Other Charges imposed by any jurisdiction on amounts under this clause 6.1 payable by us, or any liability (including penalties interest and expenses) arising out of or with respect to any such Taxes or Other Charges, whether or not such Taxes or Other Charges were correctly or legally asserted. This indemnification shall be made within 30 days from the date we make written demand for it. (d) If you become obliged to withhold or deduct from any payment to us any amount in respect of Taxes you will pay to the relevant governmental authority the full amount required to be deducted or withheld promptly upon determining that such deduction or withholding is required or receiving notice that such amount has been assessed against you. Within 30 days after the date of any payment to a governmental authority pursuant to the previous sentence, or after payment of any Other Charges, you will give us either the original or a certified copy of the receipt evidencing payment of such Taxes or other Charges. 6.2 If in our opinion, it would be contrary to any governmental restriction or regulatory obligation for us to perform any payment obligation in respect of any Transaction, we may (if and to the extent that we are of the opinion that it would not be contrary to any governmental restriction to do so and if permissible by law) pay to you the equivalent amount in the local currency of the place in which the underlying asset relating to such Transaction is located (the Local Currency Equivalent ). For the purposes of this clause 6.2, the Local Currency Equivalent shall be calculated at what we reasonably regard to be the best available spot rate. 7. Payment Netting 7.1 If, on any date, amounts are due by each party to the other in the same currency in respect of any Transactions, such amounts owing, may, at the Bank s sole discretion, be automatically satisfied and discharged and only the net amount owing on that day shall be paid by the party owing the larger amount to the other party. 7.2 If, on any date, amounts are due by each party to the other in a different currency in respect of any Transactions, the Bank shall not be obligated to pay the relevant amount due to you until you have first paid the relevant amount due to the bank. 8. Interest on Overdue Payments In the event that you fail to make any payment under this Agreement, you shall, to the fullest extent permitted by law, pay interest on such unpaid amount from the due date to the date that payment is made in full at the rate per annum determined by us to be equal to 1% per annum above our cost of funds with respect to such overdue amount. Such interest shall be calculated by us on a daily basis (compounded) and shall be payable on demand. 9. Representations and Warranties On entry into this Agreement, you make the following representations and warranties (each of which will be deemed to be repeated by you each time you enter into a Transaction): 9.1 Understanding of Risk. You have read and understood the Derivatives Risk Disclosure Statement, and you understand and are prepared to accept the degree of risk involved in the use of Transactions; in particular, you understand the nature of the Transactions contemplated under this Agreement and that such Transactions are subject to complex risks which may arise without warning and may result in substantial losses. 9