Block Trade Facility. Q: What is a Block Trade Order?

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1 Block Trade Facility Capitalised terms used in this discussion bear the meanings contained in the NZX Derivatives Market Rules ( Rules ), the NZX Derivatives Market Procedures ( Procedures ) and the NZX Derivatives Market Contract No. 1 - Global Whole Milk Powder (WMP) Futures Contract Terms, NZX Derivatives Market Contract No. 2 - Global Anhydrous Milk Fat (AMF) Futures Contract Terms, NZX Derivatives Market Contract No. 3 - Global Skim Milk Powder (SMP) Futures Contract Terms, NZX Derivatives Market Contract No. 4 - Options on Dairy Futures as appropriate, NZX Derivatives Market Contract No. 5 S&P/NZX 20 Index Futures and NZX Derivatives Market Contract No. 6 Global Butter (BTR) Futures Contract Terms. The Block Trading Facility allows Trading Participants and Advising Participants in the NZX Derivatives Market to bilaterally arrange and (subject to NZX approval) execute large Trades of Block Trade Contracts. The Block Trading Facility is separate from, and designed to complement, the central order book, which remains the primary method of Trading in the NZX Derivatives Market. Q: What is a Block Trade Order? A Block Trade Order is a pre-negotiated Order of a Block Trade Contract that meets the Minimum Volume Threshold (a minimum number of Lots) specified by NZX for that Block Trade Contract. A Block Trade Order is executed alongside, but not on, the central order book. Q: Why are block trading facilities commonly used? The use of block trading facilities may help to: - reduce execution risk, as there is more certainty that an order will be filled; and - improve price certainty, as the trade is executed at a single pre-negotiated price level. There is no need to execute multiple orders, potentially at different prices, to reach the total number of lots to be transacted. Q: What is the transaction fee for utilising the Block Trade Facility? Fees charged by NZX for using the Block Trading Facility may differ in respect of each Block Trade Contract - please refer to the Participant Fee Schedule.

2 Q: Which contracts are Block Trade Contracts? Please refer to the Procedures to determine whether the Block Trading Facility is available. NZX Derivatives Market Contract No. 1 - Global Whole Milk Powder (WMP) Futures, NZX Derivatives Market Contract No. 2 - Global Anhydrous Milk Fat (AMF) Futures, NZX Derivatives Market Contract No. 3 - Global Skim Milk Powder (SMP) Futures, NZX Derivatives Market Contract No. 4 - Options on Dairy Futures, NZX Derivatives Market Contract No. 5 S&P/NZX 20 Index Futures are Block Trade Contracts and NZX Derivatives Market Contract No. 6 Global Butter (BTR) Futures. Q: What is the Minimum Volume Threshold for a Block Trade Contract? A Block Trade Order must meet a specific Minimum Volume Threshold being the number of Lots set by NZX in the Procedures in respect of a Block Trade Contract. For example, to execute a Block Trade Order in a single Contract Month of any Block Trade Contract the Block Trade Order must be at or above 50 Lots. NB. Block Trade Orders cannot be aggregated to meet a Minimum Volume Threshold. Both sides of a Trade made using the Block Trade Facility must be single Block Trade Orders. Q: At what price can a Block Trade Order be made? When executing a Block Trade Order, Trading Participants should ensure that the price quoted represents a fair value for that Trade, that is, a price considered by the Trading Participant to be the best available for a Trade of that nature. As a price for a Block Trade Order might not be the price prevailing in the central order book, a Trading Participant or Advising Participant must, during pre-negotiation, make it clear to the potential counterparty that the price being quoted is in respect of a Block Trade Order. Q: Who can execute a Block Trade Order? Any Trading Participant or Advising Participant can arrange a Block Trade. Only a Trading Participant may execute a Block Trade Order. A Participant Client or non- Participant Client may be a counterparty to a Trade executed through the Block Trading Facility by a Trading Participant. Q: When can a Block Trade Order be submitted? A Block Trade Order can be submitted at any time during a Block Trade Contract s Open (Normal) Session State and up to 15 minutes after the central order book for the Block

3 Trade Contract has closed, so long as it has been organised during the Open (Normal) Session State for that Contract. Q: How are Block Trades submitted? Once the terms of a Trade to be executed through the Block Trading Facility have been agreed, the Trading Participant must advise NZX [by ] within 10 minutes of verbal agreement or, in the case of exceptional market conditions or a Trade that is dependent on the execution of another instrument, within 15 minutes of verbal agreement. Trades to be executed through the Block Trading Facility must be submitted to NZX by ing the completed Block Trading Facility form to surveillance@nzx.com in accordance with the timeframes set out in the above paragraph. Q: What information needs to be submitted to NZX when a Trade is executed through the Block Trade Facility? The Procedures require the following information to be submitted to NZX when a Trade is executed through the Block Trade Facility (as set out in the Block Trading Facility form): - the Block Trade Contract identifying code (including Contract Month/s); - the price agreed upon; - the quantity of Block Trade Contracts; - the firm reference; - the account details; - the settlement date; - identity of the reporting Trading Participant; - identity of the reporting party s Dealer or DMA Dealer; - identity of the reporting party s Clearing Participant; - identity of the reporting party s account type; - identity of the reporting party s telephone number; - identity of the reporting party s address; - identity of the counterparty s Trading Participant; - identity of the counterparty s Dealer or DMA Dealer; - identity of the counterparty s Clearing Participant; - identity of the counterparty s account type; - identity of the counterparty s telephone number; - identity of the counterparty s address and; - the deal date and time.

4 Q: What happens next? Trades submitted to NZX through the Block Trading Facility are validated by NZX Market Surveillance. Primarily, the price and volume of such Trades are checked to ensure they comply with the Procedures. Once accepted, the Trade will be regarded as executed and NZX will disseminate the price, expiry months and the volume to the Market. In addition, the details of a Trade executed through the Block Trade Facility are published on TCS Bancs where post trade processing, including trade allocation to the member counterparty (ies), can be conducted. Please see the Rules and Procedures for further details regarding the Block Trade Facility.

5 Disclaimer: This document is provided for general information purposes and is not intended as, and shall not constitute, investment advice nor an offer, invitation, inducement, solicitation or recommendation to engage in any transaction. Although NZX Limited (NZX) has taken care to ensure the accuracy of the information as at the date of publication, NZX does not give any warranty or representation as to the accuracy, reliability or completeness of the information in this document. To the maximum extent permitted by law, NZX and its subsidiaries, employees, officers and contractors shall not be liable for any loss or damage (whether direct, indirect, consequential or otherwise) arising in any way (including by way of negligence) from or in connection with any information provided or omitted or from anyone acting or refraining to act in reliance on this information. Before entering into any transaction you should take steps to ensure that you understand the transaction and have made an independent assessment of its appropriateness in light of your own objectives and circumstances. The reader of this document should seek independent advice before acting on any information in this document. NZX Derivatives Market is a licensed market operated by NZX, a licensed market operator regulated under the Financial Markets Conduct Act NZX and its subsidiaries offer services to Participants and to participants in its clearing and settlement system. Those who desire to trade any products available on any NZX market or to offer and sell any such products to others or to become a participant in the clearing and settlement system, should consider the requirements of the applicable Rules and other legal and regulatory requirements relevant to them, as well as the associated risks, before doing so. The "S&P/NZX 20 Capital Index" is a product of S&P Dow Jones Indices LLC or its affiliates ("SPDJI") and NZX Limited ("NZX"). Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC ("S&P"); Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ("Dow Jones"); NZX is a registered trademark of NZX Limited and these trademarks have been licensed for use by SPDJI. S&P/NZX 20 Index Futures are not sponsored, endorsed, sold or promoted by SPDJI, S&P, Dow Jones or their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P/NZX 20 Capital Index.