OPERATING RULES AND PARAMETERS CETIP

Transcription

1 OPERATING RULES AND PARAMETERS CETIP Haitong Securities do Brasil Corretora de Câmbio e Valores Mobiliários S.A., Corporate Taxpayer ID (CNPJ) / henceforth simply known as "Haitong Securities," to operate as a brokerage house in accordance with the Manual of Standards for Securities Brokers, in the organized securities markets managed by Cetip S.A. Mercados Organizados (CNPJ) / henceforth simply known as Cetip, lays down in this document the rules that guide its operations in said markets. These rules are part of the Client Enrollment Form and/or the service agreement entered into with Clients. 1. CLIENT ENROLLMENT Before starting their operations at Haitong Securities in the organized securities markets managed by Cetip, Clients must provide all the enrollment information requested by completing and signing a Client Enrollment Form and/or signing the Service Agreement and submitting copies of the supporting documents required. Formally complying with the rules established in the standards issued by Cetip: - Clients must also immediately inform Haitong Securities of any change in their enrollment information and the Client Enrollment Form must be updated in periods not exceeding 24 months. - The fees paid by the Client will be negotiated while contracting the services of Haitong Securities. - Haitong Securities maintains all the documents related to Client enrollment, Orders and transactions conducted for the period and under the terms established by applicable laws and regulations (six years after the end of the relationship with the client). In the process of identifying Clients, Haitong Securities adopts all the procedures required by laws and regulations pertaining to Client Enrollment Information and Prevention of Money Laundering. 2. ORDER 2.1. RULES FOR RECEIVING ORDERS For the purpose of these rules and Instruction 505 of the Securities and Exchange Commission of Brazil (CVM), "Order" means the act by which the Client engages Haitong Securities to buy or sell assets or rights or to register a transaction in its name and under the conditions specified by its TYPES OF ORDERS ACCEPTED AND DEADLINE FOR EXECUTION a) MANAGED ORDER An order that specifies only the quantity and characteristics of assets or rights to be bought or sold, with Haitong Securities, at its discretion, determining the moment and the systems in which the orders will be executed; b) MARKET ORDER An order that specifies only the quantity and characteristics of the assets or rights to be bought or sold, which must be executed as soon as it is received by Haitong Securities. c) MATCHED ORDER An order whose execution is tied to the execution of another order from the Client, which may or may not have a price limit. d) DISCRETIONARY ORDER An order given by the manager of a securities portfolio duly authorized by the CVM, where the issuer establishes the conditions under which the order must be executed within the trading period established by CETIP. After the order is executed, the issuer will name the investors, the quantity of assets (securities) or rights to be attributed to each one of them, and the respective price. e) FINANCING ORDER An order consisting of an order to buy or sell an asset or right in a market managed by CETIP, and another concurrent order to buy or sell the same asset or right in the same market or another market also managed by CETIP. f) LIMIT ORDER An order that must be executed only at the price equal to, or better than, the price specified by the Client. g) REAL-TIME ORDER Only applicable to transactions carried out in the markets managed by CETIP, where the Client, in real time, decides and provides to Haitong Securities the conditions for execution. h) STOP ORDER An order that specifies the price of the asset or right beyond which the order must be executed. Haitong Securities accepts, for execution in organized markets managed by CETIP, the above types of orders, provided the Client meets the other conditions established in this document. Haitong Securities carries out Orders with the term for execution being the issue date itself or a date specified by the client. After the period, Orders not executed are automatically cancelled and can only be

2 renewed by the Client, who must submit them again and obtain prior and express approval from Haitong Securities TIME FOR RECEIVING THE ORDERS Orders are received during the working hours of organized markets managed by BM&FBovespa and Cetip. However, Orders received outside working hours will be valid only for the next trading session METHODS FOR TRANSMISSION OF ORDERS Only Orders transmitted to Haitong Securities verbally or in writing, as per the Client's option informed in their enrollment documents, will be executed. The following are considered Orders: - Verbal orders submitted by telephone; and - Written those submitted via registered mail, fax, (the same address as in the enrollment form), instant electronic message and any other means that enable confirmation of receipt, and provided that its authenticity and integrity is guaranteed, including, as applicable, the signature, phone number or fax number, and the time when the message was sent and received. If Order cannot be transmitted to Haitong Securities in writing through one of the means mentioned above, the Client can transmit the order to the trading desk(s) by phone at PROCEDURES FOR RECEIVING/REFUSING ORDERS As a rule, Haitong Securities has no restrictions on the receipt/execution of Orders that comply with the internal operating parameters and those established in the Cetip rules. However, it observes the following: - Haitong Securities establishes mechanisms to limit the risks to its Clients due to price variations and exceptional market conditions, and may fully or partially refuse to execute the transactions requested and immediately inform the Clients. - Haitong Securities may also, at its sole discretion, refuse to receive any Order whenever it notices the practice of illegal acts or the existence of irregularities, especially regarding the creation of artificial price, supply or demand conditions in the market, price manipulation, fraudulent operations, money laundering, use of unfair practices and/or the financial incapacity of the Client LAUNCH OF ORDER Haitong Securities launches the Orders received through a computer system and provides the following information: - Client Code at Haitong Securities; - Date, time and sequential numbers that identify the chronological order of receipt of the Order; - Description of the transaction (characteristic and quantity of assets traded); - Nature of transaction (buy or sell; market type, price); - Identification of the sender of Order; - Period of validity of the Order; - Type of Order (when applicable); and - Indication if for Related Person or Proprietary Portfolio CANCELLATION OF ORDER All and any Order that has not been executed may be cancelled: a) by the Client or a third party authorized to transmit Orders on the Client's behalf; b) by Haitong Securities if: - the transaction, the circumstances and the data available with Haitong Securities point to a risk of default by the Client; - failure to comply with the laws or regulations of organized markets managed by Cetip, internal rules and laws in general; - the Order is valid only for the date of issue and is not fully or partially executed. Orders not executed within the deadlines established by the Client will be automatically cancelled by Haitong Securities. When the Order is transmitted in writing, Haitong Securities will only accept the request for cancelation submitted in writing. If the Order has not yet been executed, it will be cancelled when the Client changes any of its conditions and a new Order will be issued when applicable. The same procedure will be followed if the Order has any kind of erasure. Cancellations envisaged in this item must be expressly identified in the control that formalizes the registration of Orders. The cancelled Order will be maintained in a sequential file together with the other Orders issued and executed.

3 2.8. EXECUTION OF ORDER Execution of Order is the act by which Haitong Securities carried out the Order transmitted by the Client by either performing or registering the transaction in the markets managed by Cetip. For the purposes of execution, Orders in the securities markets managed by Cetip may be grouped by Haitong Securities by type of underlying asset, date of settlement and price. For adequate control by the Client, Haitong Securities confirms to the Client, in a timely manner, the execution of Orders and the conditions in which they were executed, either verbally or by (the one informed by the client in the enrollment form), with recording, or any other means that enables confirmation of the issue and receipt. Execution of the Order can also be confirmed through submission of a document confirming the transactions ALLOCATION OF TRADES MADE Allocation is the act by which Haitong Securities attributes to its Clients, fully or partially, where applicable, the transactions carried out or registered by it. Haitong allocates the trades made at Cetip according to the following criteria: a) only Orders that can be executed at the time of executing a trade will be subject to allocation; b) Orders from persons not related to Haitong Securities have priority over Orders from related persons; c) subject to the aforementioned criteria, the chronological order of receipt of the Order determines the priority for carrying out the Order issued. 3. TRADE ORDER OR ANY OTHER DOCUMENT IN PLACE OF IT Haitong Securities keeps electronic files of the trade notes/similar documents related to the trades carried out and registered in the Cetip System to complete the registration of Orders, which will be made available to Cetip and/or CVM upon request. 4. POSITION OF SECURITIES The securities owned by the Client will be registered in individual positions. Financial transactions resulting from the operations involving the underlying securities or events related to such securities will be credited or debited to the client through deposit in a checking account informed by the client in the client enrollment form, or upon the client's request to from Haitong Securities. Internally, Haitong Securities controls financial operations through a management account. Haitong Securities provides information to its Clients about the position of assets in custody and traded. Haitong Securities maintains control over Client positions with periodical reconciliation between: - Orders executed/trade notes and/or documents that serve to register the Orders; - Positions in the database that generate statements of transactions provided to Clients; and - Positions provided by clearance and settlement agencies, where applicable. 5. RULES FOR SETTLEMENT OF TRANSACTIONS Client transactions will be settled via electronic transfer of funds, always under the Client's Individual Taxpayer ID (CPF), with funds originating from or transferred to checking accounts informed by the client in the client enrollment form. Haitong Securities also maintains a management checking account in the Client's name, which cannot be operated, in which the trades made as well as the debits and credits made in the Client's name will be entered. Payment of any amounts by Haitong Securities to the Client must be done via bank transfer in the name of Haitong Securities. Payment of any amounts by the Client to Haitong Securities as a result of transactions carried out, as well as other expenses or payments related to the transactions, must be done using its own funds via bank transfer in the Client's name, which enables identifying the sender. Funds sent by the Client to Haitong Securities will only be considered available after confirmation of their receipt by Haitong Securities. If the Client has any dues pending and expenses related to the transactions, Haitong Securities is authorized to settle the agreements, rights and assets acquired, as well as execute any goods and rights provided as guarantee for the transactions or are in its possession, using the proceeds of the sale to pay the pending dues, regardless of judicial or extrajudicial notice. Transfers by Haitong Securities to non-resident investor Clients can be made to the checking account of the Custody manager of the non-resident investor or a third-party Custody manager contracted by the nonresident investor, who must also be identified in the Client enrollment form with Haitong Securities.

4 6. RELATED PERSONS (applicable solely to offer made in Electronic Platform) For the purposes of this document, the following are considered related persons: a) Managers, employees, operators and other representatives of Haitong Securities who perform brokerage or operational support activities; b) Autonomous agents who provide services to Haitong Securities; c) Other professionals who have a service agreement with Haitong Securities directly related to brokerage or operational support activity; d) Natural persons who directly or indirectly control or hold equity interest in Haitong Securities; e) Corporations directly or indirectly controlled by Haitong Securities or its persons related to it; f) Spouse or partner and minor children of the persons mentioned in items "a" to "d" above; and g) Investment clubs and funds in which the majority of shares are owned by related persons, except when these are discretionarily managed by non-related third parties. Haitong Securities will comply with the following conditions regarding operations involving related persons: - In case of concurrent Orders given simultaneously by Clients who are not related persons and by related persons, Orders from Clients who are not related persons must have priority. - Haitong Securities is not allowed to favor its own interests or those of related persons to the detriment of Clients' interests. - Persons related to Haitong Securities can only trade securities on their own, directly or indirectly, through Haitong Securities, which does not apply to: I. Financial institutions and similar entities; and II. Persons related to Haitong Securities regarding transactions in organized markets in which Haitong Securities is not authorized to operate. - For the purposes of this instruction, transactions carried out for Haitong Securities own portfolio are considered similar to transactions of related persons. 7. MONITORING OF INVESTMENTS IN RELATION TO INVESTORS In the Client enrollment process, the Client's financial suitability is evaluated and identified as well as their experience in investments and their objectives. Therefore, the Client will provide information to evaluate: a) Tolerance to risks; b) Knowledge of specific products and prior experience in investments in the financial market; c) Objectives of the investment; and d) Economic and financial situation of the Client. Four Client profiles we defined considering factors related to the possibility of loss (without limitation), which could exceed the capital invested, as well as criteria for the subjective capacity of the Client expressed in responses provided in the questionnaire. For a combined analysis of these variables, Haitong Securities has defined the classification of profiles as follows: - Preserve Capital, Conservative, Moderate and Aggressive. 8. SYSTEM FOR RECORDING AND RECOVERING INFORMATION Haitong Securities makes intelligible recording of all verbal Orders received by telephone and all written Orders received via instant messaging. Haitong Securities recording system enables clear reproduction of dialogues with its Clients and also contains information required for the complete identification of the Order, the Client who issued it, as well as the date and time of the start of each recording. The content of these recordings may be used as proof while clarifying questions related to the Client's account and the respective transactions, and is stored by Haitong Securities for ten (10) years from the recording date. The respective recording system works non-stop on a daily basis, including from the start to the close of working hours of organized securities markets managed by Cetip, and controls the lines and extensions. 9. PREVENTION AND COMBATING MONEY LAUNDERING Haitong Securities has internal controls in place to prevent and combat Money Laundering practices and Terrorist Financing for its transactions and those of its Clients carried out within the scope of Cetip, including the implementation of the following controls: - Registration and Monitoring of Transactions involving securities, regardless of their value the monitoring of transactions established in accordance with specific criteria (the Department of Compliance is responsible for the monitoring, according to the Policy on Money Laundering), to verify its compatibility with the Client's wealth and financial situation as informed in the client enrollment form, analyze the transactions together with other associated transactions that may be part of the same set of transactions or have any

5 type of relation between themselves, to identify transactions that could constitute the crime of money laundering and terrorist financing, establishing special monitoring rules for the following categories of investor Clients: non-residents, especially when established as trusts and corporations with bearer securities; private banking investors; and politically exposed persons; paying special attention to transactions carried out with politically exposed persons, including those from countries with which Brazil has a high number of financial and commercial transactions, common frontiers or ethnic, linguistic or political proximity; and the maintenance of rules, procedures and internal controls to identify the origin of funds involved in the transactions of Clients and beneficiaries identified as politically exposed persons, in accordance with the law applicable to the product and the market of operation, in order to avoid the improper use of the Cetip system by third parties for illegal practices. - Conservation of Client enrollment information and records of transactions carried out by them, keeping them available to Cetip and CVM, as well as conservation of documents that prove the adoption of transaction monitoring procedures and the verification of compatibility between the Client's financial capacity and the transactions carried out by him/her, as well as records of conclusion of its analyses of transactions or proposals, for at least ten (10) years from the date when the Client's account with the BROKER (participating) is closed or the date of conclusion of the last transaction carried out in the name of the respective Client (whichever happens last), and this period that may be extended indefinitely in the event of any investigation formally communicated by the CVM to Haitong Securities. - Communication, to the CVM and SISCOAF, of transactions involving Clients with the purpose of generating losses or gains that have no objective economic grounds; transactions with the participation of resident natural persons or entities established in countries that do not apply, or inadequately apply, the recommendations of the Financial Action Task Force on Money Laundering and Terrorist Financing (FATF); and non-cooperating territories, as defined by the Council for Financial Activities Control (COAF); transactions settled in cash, if and when permitted; private transfers, without any apparent reason, of funds and securities; transactions whose degree of complexity and risk is incompatible with the technical qualification of the Client or its representative, or the provision of guarantee in transactions carried out in futures markets; deposits or transfers made by third parties for settlement of Client transactions; payments to third parties, in any form, by way of settlement of transactions or redemptions of amounts deposited as guarantee, registered in the Client's name; situations and transactions in which it is not possible to keep the Client enrollment information updated, identify the end beneficiary or conclude the necessary diligence; transactions involving amounts that are objectively incompatible with the professional occupation, income and/or wealth and financial situation, based on the respective client enrollment information; transactions that demonstrate significant fluctuations in the volume and/or frequency of transactions by any of the parties involved; transactions whose developments involve characteristics that may constitute a maneuver to circumvent the identification of cash payments involved and/or the respective beneficiaries; transactions whose characteristics and/or developments conclusively show the action on behalf of third parties; transactions that show evident a sudden and objectively unjustified change in the methods of operation usually used by the Client, as determined by applicable laws regarding the period and form; - Preparation and implementation of a manual of internal control procedures that ensures compliance with the obligations related to the registration, monitoring, preventive identification of risks of money laundering crimes, including the analysis of new technologies, services and products, identification of Clients that became politically exposed persons after the start of a relationship with Haitong Securities, or when it was detected that they were already politically exposed persons at the start of the relationship, identification of the origin of funds involved in the transactions of Clients and beneficiaries identified as politically exposed persons, selection of competent employees with high ethical standards, and communication of suspicious transactions to the authorities, in accordance with the laws applicable to the product and market of operation, in order to prevent money laundering and terrorist financing. - Maintenance of the continuous training program for employees to disseminate the internal control procedures for prevention of money laundering and terrorist financing. 10. INFORMATION SECURITY AND BUSINESS CONTINUITY Haitong Securities informs that it has sufficient internal controls for adequate security of information and continuity of operations, including the0020following: - Control of logical access to information and support systems to prevent unauthorized access, theft, improper change or leak of information; - Formal mechanisms to manage accesses and passwords (networks, systems and databases, including the electronic Client relationship channel); - Implementation of a technology security solution to control external access to the internal environment (firewall) to protect information against malicious codes (antivirus);

6 - Periodical tests of information systems regarding their security and timely correction of any vulnerabilities identified; - Measures that keep the information at the same level of protection at all times of its use regarding external activities, including remote work; - Audit trails for critical systems that enable the identification of origin, date, time, user in charge and typification of all queries and maintenance made on critical information; - Preventive measures against unscheduled interruption or unavailability of information systems, identifying processes and persons that could negatively affect the most critical processes and establishing adequate alternative and compensatory controls; - Periodical tests of preventive measures defined and implemented to guarantee their efficiency and effectiveness; - Record of situations of unavailability of systems, networks, communication channels (including voice recording and instant messaging); - Record and monitoring of all interruptions or faults that lead to unscheduled interruption of the systems since their occurrence; and - Application of workaround solutions and implementation of definitive solutions for appropriate management of incidents and problems. 11. GENERAL PROVISIONS Haitong Securities complies with appropriate rules enacted by the Monetary Council and Central Bank of Brazil, the Securities and Exchange Commission (CVM), BM&FBovespa and other rules of organized securities markets, including CETIP, and its Operating Rules and Parameters are available for public access on its website Haitong Securities do Brasil C.C.V.M. S.A.