EXECUTION POLICY OF THE CLIENT S ORDERS

Transcription

1 EXECUTION POLICY OF THE CLIENT S ORDERS Based on art 87. of the of the Capital Markets Act, Rulebook on terms for conducting business of the authorised company, Rulebook on client classification, the Obligatory Relations Act and art. 8 of the Raiffeisenbank Austria d.d. articles of incorporation, the Bank Management Board has passed on its 49 th meeting held at November 29 th 2016 the following Execution policy of the client s orders (consolidated text) 1 Introduction This Policy of the execution of the Client's orders regulates the execution and transfer of orders for the purchase or sale of financial instruments of the Client of the Raiffeisenbank Austria d.d. Brokerage unit. The execution policy specifically lists the places in which the Raiffeisenbank Austria d.d. executes the Client's orders. The main goal of the Order execution policy is continuous realisation of the best possible results for the Clients in Raiffeisenbank Austria d.d.. 2 Entry into force The Raiffeisenbank Austria d.d. order execution policy enters into force as of July, 1 st Definitions In this Order execution policy the following terms have the following meanings, unless otherwise implied by the content: Bank Stock Exchange Price Depository HANFA Quantity Order Client SKDD Financial instrument ZTK Raiffeisenbank Austria d.d. Zagrebacka burza d.d. (Zagreb Stock Exchange) or other organized market licensed by the competent regulatory body Unit price for unit quantity of securities which are the subject of the respective Order A designated depositary, except SKDD, authorized to manage accounts to/from which the Securities are delivered The Croatian Financial Services Supervisory Agency a specific number of Financial instruments referred to in the Order A unilateral statement of will by the Client directed to the Bank ordering it to execute a certain deal with the securities, in the Bank's own name and for the account of the Client, which statement the Bank has accepted One or more legal or physical persons or assets without legal personality, which make an agreement with the Bank with respect to the order and which submit the Order Central Depository and Clearing Company Inc. with main office in Zagreb, Heinzelova 62a, central place of settlement for the Zagreb Stock exchange An unequivocally, clearly and precisely defined security which is the subject of the respective Order, and which is quoted on the Stock Exchange the Capital Markets Act (Official Gazzette 88/08) with all its subsequent modifications The term Client implies both singular number and plural number of the noun. 4 Scope of application 4.1 Client The execution policy applies to the orders of small and professional investors clients of the Bank. 4.2 Products and services The execution policy shall be applied in cases when the Bank executes orders in its own name, and for the account of its Clients, as well as when orders are transmitted to intermediaries for execution.

2 5 Client's instructions The Bank accepts general, as also special instruction of the Client in connection with specific orders relating to the execution or transfer of their Orders. In the case that the Client gives a specific instruction, the Bank will execute the order in accordance with the instruction given. However, in doing so, the Bank may be forced to diverge from its Execution Policy. In such cases, the Bank is exempted from compliance with its Execution Policy. The Bank shall point out to its Clients that by providing specific instructions for order execution or transmission, the Bank may be prevented from taking certain steps which are defined in the Execution Policy and which the Bank has deemed to be necessary in order to achieve the best possible result on a consistent basis. In the absence of such specific instructions from its clients, the Bank will execute or transmit orders on behalf of its clients as described below. 6 Order Placement and Handling Clients have several possibilities for placing purchase or sale orders with the Bank. Some of these possibilities include placing orders via electronic interfaces, fax, and/or telephone, as well as placing orders in person at the Bank's branches/outlets. The Bank generally accepts an Order as a stop-limit order with a time limitation at the adequate market. In the case that the client does not specify any order supplement, the Bank will execute the order with a time limitation at the adequate market. The stop-limit order with a time limitation at the adequate market is an order limited by the designation of the financial instrument, price per order, quantity, market and validity period of the order. Such buy (sall) orders shall not be executed for the Financial instrument with a different designation than the one determined by the Client, above (below) the price limit, market and after the expiration of the validity period, determined by the Client. The market shall be deemed as regulated, if the market name or Market Identification Code have been regulated (Market Identification Code according to ISO 10383). 1. The term period of the Order is defined as:good-for-day: the order is valid during the current market day. 2. with time limit: the order is valid until a specific date. The Order is valid until the date specified therein, but not more than two months from the date the Order is placed. After expiration of the validity period the Order can not be extended, but a new order must be opened instead. The Order is valid until 24:00 hrs of the day specified as the term of the Order. The Bank shall not inform the Client of the Order expiry. The Order for shares or other securities of same significance placed on markets that the Bank is not a direct member of (except for derivatives) will be accepted as valid for a day in most cases. Orders placed outside of the Bank s usual business hours, i.e. on Saturdays, Sundays or holidays, cannot be handled before the following bank working day and appropriate place of trading. They will be handled in the order of their reception. Order routing to the relevant execution venue or intermediary will frequently take place electronically, or on occasion per telephone or (details are available in the annex). The Bank's Clients can place orders for the following financial instrument categories: 6.1 Transferable securities This category includes: shares or other securities of equal importance which represent a share in the capital or membership rights in the company bonds and other types of the securitised debt

3 all other securities which authorise the acquisition or sale of such transferable securities or which serve as basis for conducting cash payments, which is determined based on transferable securities, currencies, interest rates or income, goods, index or other quantities of measure. Payment instruments are not considered transferable securities. The bond category includes government, corporate and municipal bonds. 6.2 Money market instruments Money market instruments include all types of instruments used for trading at the money market, i.e. treasury bills, treasury notes and commercial bills, except for payment instruments. 6.3 Derivatives The derivatives category includes options, futures and all other derived financial instruments which pertain to securities, goods, currencies, interest rates, returns, climate variables, freights, emission quotas, inflation rates or other official economic statistic data, and which need to be or can be settled in cash at the request of one of the contractual parties (save for the reasons of non-payment or other reasons for agreement termination), as also any other derived financial instruments which refer to the assets, rights, liabilities, indexes and measures not specified herein, and which have feauters of other derived financial instruments taking into consideration, among other things, if they are traded on a regulated market and/or a multilateral trading platform, and if they are aligned and settled by recognised clearing organisations or they are subject to the regular margin call. 6.4 Units in collective investment undertakings Collective investment undertaking means: 1. an undertaking for collective investment which has been authorised by HANFA in accordance with the act regulating establishment and operation of funds and management companies; 2. an undertaking for collective investment which has obtained authorisation in a Member State and which, pursuant to the legislation of the home Member State, satisfies the requirements of the Council Directive 85/611/EEZ of 20 December 1995 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) and amendments thereto; 3. other foreign undertaking for collective investment including undertakings other than those referred to in indent 2 of this point, as well as undertakings for collective investment which have been granted authorisation to carry on business in a third country. 7 Order Supplements Order supplements can be made only if the execution venue accepts such an order supplement. The Bank offers its Clients the following order supplements: "At Market" Stop Market order «All or none» order «Fill or kill» order Immediate Or Cancel (IOC) Order An "at market" order will be executed in whole, as rapidly as possible, at the best possible price. The validation period of the market order is good-for-day. With a stop-loss (stop-buy) market order the client instructs the Bank to sell (buy) the financial instruments at market as soon as the price moves below (above) the stop-price. The actual price received by the client may diverge significantly from the chosen stop-price. This order supplement can be given only for the buy (sell) orders of derivatives. With an AON order, the client instructs the Bank to execute the order only in whole. If full execution is not achieved until the end of the validity period, the order is cancelled. (Note: the client shall not be informed of the cancellation). With a FOK order, the client instructs the Bank to execute the order immediately and in whole. If immediate and full execution is not possible, the order is cancelled (Warning: The client will not be informed of the cancellation) With an IOC order, the client instructs the Bank to execute the order immediately, in whole or partially, thereby creating a possibility for partial execution. Those portions of the order which have not been executed immediately will be cancelled. (Warning: The client will not be informed of the cancellation). The validation period of this order is good-for-day.

4 VWAP order Volume Order Iceberg Order The VWAP order (Volume-Weighted Average Price) represents the marketable value ratio according to total quantity traded in a certain time period. The validity period of this order is good-for-day with market price. With a 1/3 (or 1/2, 1/4) volume order, the client instructs the Bank to buy or sell one third (or one half, one quarter) of the total traded volume over a defined period, at a defined execution venue. The validity period of this order is good-for-day with market price. An iceberg order is an order with an overall volume which is only partially visible in the order book. The client must define the overall volume, the peak volume as well as the price limit. The minimum amount of the peak volume depends on the characteristics of the execution venue to which such an order is sent. The Bank may accept the Order supplement other than those listed in this paragraph if such amendment is accepted by the execution venue, and the broker to which the Bank is forwarding the Order. 8 Prioritisation of Order Execution Aspects When executing orders on the behalf of clients the best possible results of the order shall be determined with consideration of all relevant order execution aspects. These aspects include the price of the financial instrument, costs, speed, likelihood of execution and settlement, and the size and nature of the order. 8.1 Small investors The most favourable result for the Client categorised as small investor is estimated based on the «total amount» that the Client can obtain by selling, i.e. spend by buying. In case of a purchase order, the costs of execution which are to be borne by the client shall be added to the price of the financial instrument upon calculation of the "total amount". In case of a sales order, the price of the financial instrument will be lowered by the amount of the costs of execution which are to be borne by the client. 1. Price: The financial instrument's price depends, to a great extent, on the price quality of the respective execution venue. The Bank will assess the price quality on the basis of the execution venue's long-term liquidity. 2. Costs: The costs related to execution are listed in the Brokerage and Custody Fees. The costs are stated in gross amount including the stock exchange fees, the CDCC fees, the fees of the broker the order is being forwarded to and custody transaction fees if the Client is settling the transaction on the custody account held with the Bank, but excluding possible taxes, duties, third party fees and other expenses incurred in connection with providing order execution. In addition, when executing large-scale orders (the particular threshold for qualification as a large-scale order is financial instrument and market dependent), the Bank will also take into account implicit costs, such as the potential market impact of the transaction or the difference between the buy and sell price. In the following situations the Bank shall also consider the additional aspects of Order execution: 1. if the Order is of significant size (in such cases the likelihood of execution has an increased importance) or 2. In case the Financial instrument requested by the Client requires execution outside of the Croatian market, or the markets of OECD member countries and/or an over-the-counter transaction (in such cases increased importance is placed on settlement security). 8.2 Professional investors The Bank shall give priority to the "total amount" as well as to the likelihood of execution and settlement for professional clients. 1. Likelihood of Execution: the Bank shall take into account the short-term executability of an order at an execution venue. At the occasion of Order execution, the Bank shall assess the likelihood of execution based on the offers in the trading system of the Stock exchange at the time of execution. 2. Likelihood of Settlement: The likelihood of settlement is closely linked to the security of settlement of the respective execution venue. The Bank feels that the probability of settlement is high on the Croatian market and markets of the OECD member countries.

5 Speed only becomes a decisive order execution aspect when all above mentioned order execution aspects have been fulfilled. The Bank may decide to postpone the execution of an order, if this appears to be the most suitable execution for a specific order (e.g. for illiquid products). If the Client wants a different priority rating concerning the Order execution aspects, they must deliver special instructions to the Bank. 9 Execution venues and intermediaries The execution venue is determined by the Client. The Bank forwards the Order to the execution venue determined by the Client at the moment of placing the Order. The Bank executes Orders either directly at the execution venue, or, alternatively, transmits Orders to be executed by an intermediary (broker). In case an Order is forwarded for execution to an intermediary, the Order is executed in accordance with the intermediary's order execution policy, which shall be made available to the Client on request. If an Order is transmitted for execution to an intermediary which acts in markets of the countries in which there is no obligation to implement an order execution policy, the Bank does not guarantee for the most favorable execution of the Order to the Client. The Bank monitors the execution and settlement quality of the intermediary. Sales of existing positions in financial instruments are executed at the respective purchase stock exchange, i.e. the Stock exchange on which the purchase transaction was executed. If the Financial instruments arrive to the depository or custody account by delivery, the sale is conducted at the Stock Exchange listed on the occasion of the delivery or on the main market. 9.1 Transferable securities The Bank has direct and indirect (via intermediaries) ways of accessing the execution venues. A list of these can be found in the annex. The process of selecting the execution venues and intermediaries is the following: Based on the above-described prioritisation of criteria, orders are preferentially executed in the respective main marketplace, another regulated market or a multilateral trading facility, as execution is regularly possible here in accordance with the weighted execution criteria, taking into account the market liquidity. The Financial instruments exchange is considered as main market, where trading in significant quantities is executed. Orders are normally executed on the respective leading stock exchanges of the country concerned. Transactions with debentures are as a rule carried out at the Stock Exchange. In such cases, the stress is on the likelihood of execution, as addition to the «total amount» criterium. Transactions with debentures which are carried out outside of the Stock Exchange are executed as transactions by accepting the Bank's official offer, i.e. Raiffeisen Bank International AG (if the Bank does not have an official offer for the said debenture). Orders on transferable securities, on execution venues the Bank has no direct access to, the Bank will, dependent on execution venue, send to intermediaries Raiffeisen Bank International AG, Raiffeisen Centrobank AG, Neonet Securities AB, Raiffeisen Banka d.d., Raiffeisen banka a.d., Raiffeisen BANK d.d. Bosna i Hercegovina, Raiffeisen Capital a.d., CG Broker-Diler AD Podgorica and NLB Tutunska Banka. 9.2 Money market instruments Transactions with commercial bills are executed at the Stock Exchange as a rule. In such cases, the stress is on the likelihood of execution, as addition to the «total amount» criterium. Transactions with treasury bills, treasury notes and commercial bills executed outside of the Stock exchange are carried out as transactions by accepting the Bank's official offer.

6 9.3 Derivatives The Bank executes transactions with derivatives listed on Stock Exchanges (or multilateral trading facilities) at the appropriate Stock Exchange (or multilateral trading facility) in the shortest possible period, via an intermediary Raiffeisen Bank International AG. Transactions with certificates and warrants issued by Raiffeisen Centrobank AG on the primary market will be executed within the subscription period and within the subscription price. Subscription period and price are disclosed in the terms of issue. Transactions with certificates and warrants issued by Raiffeisen Centrobank AG on the secondary market are executed by accepting Raiffeisen Centrobank's offer (over the counter) or, alternatively, on the Vienna Stock Exchange. Transactions with certificates and warrants issued by other issuers (besides Raiffeisen Centrobank AG) are executed at the respective market place. In certain cases, the order may be executed directly with the respective issuer (over the counter). An over-the-counter execution will be the preferred execution form if the liquidity available on the respective market place is not sufficient. 9.4 Units in collective investment undertakings Orders for purchase and sale of units in collective investment undertakings (funds) are executed according to the net property value. Orders for purchase and sale of shares in foreign funds are forwarded to a dealer Raiffeisen Bank International AG who sends the received orders to a fund management company or its depository bank for execution. 9.5 Subscriptions related to financial instruments issues The Clients have the possibility to participate, through Bank as a broker, in financial instruments issues in accordance with the conditions defined in the prospectus or other documents. The Bank transmits the Client's orders to the respective lead manager, co-lead manager or issuer, who will allot the order in accordance with the subscription conditions. 10 Execution outside of an organised market or multilateral trading facility Regardless of the Client's instructions, certain Orders of the Client can be executed outside of the regulated markets, if their execution and settlement would otherwise be brought into question. On such an occasion, the Bank shall act in the above described manner. 11 Aggregation of Orders Under certain conditions, the Bank may pool a client order with those of other clients into one single order and subsequently execute this order. This process is called aggregation. In the interest of the Client, the Bank shall aggregate Orders for the purchase and sale of local and foreign Financial instruments with the purpose of preventing settlement costs. If the Bank aggregates a client's order with a transaction to be entered into for its own account and partially executes this block order, it will give priority to the client over its own transactions when allotting the aggregated transactions; however, if the Bank can conclusively demonstrate that the same favorable conditions would not have been possible without pooling the transactions, or that it had not otherwise been able to execute the order at all, then it will allot the transaction entered into on its own account on a pro-rata basis. Aggregation will only be carried out in the case that it is a priori unlikely to work overall to the disadvantage of any client whose order is to be aggregated. Nevertheless, the Bank emphasises that it cannot be fully excluded that aggregation may work to the disadvantage of individual orders. 12 Extraordinary circumstances Extraordinary circumstances, such as significant daily price fluctuations, information technology failures, or system or liquidity bottlenecks, may force the Bank to execute orders in a way that diverges from this Execution Policy (e.g. at an alternative execution venue). In such cases the Bank will act in accordance with the fundamental principles of protecting the client's best interest.

7 Annex Execution Venue Overview The Bank may use other execution venues in individual cases. The actual list of execution venues available may be different from the list below, depending on the respective service agreement with the individual client. Financial instruments Shares or other security papers of the same significance that represent share in capital or membership rights within a company, as well as receipts on deposited shares, and all other security papers that give the right to acquire or sell such transferrable security papers or on the basis of which cash payments can be executed that is determined on the basis of transferrable security papers, currencies, interest rates or yields, commodities, indices or other measuring units Country Institution description Code (MIC) Access Croatia Zagreb Stock Exchange XZAG direct Austria Xetra Vienna (securities exchange) XVIE brokerage Xetra Vienna (official market) WBAH brokerage Germany Xetra Frankfurt XETR brokerage Eurex Germany XEUR brokerage Frankfurt Stock Exchange (Floor) XFRA brokerage Stuttgart Stock Exchange XSTU brokerage München Stock Exchange XMUN brokerage Berlin-Bremen Stock Exchange XBER brokerage Düsseldorf Stock Exchange XDUS brokerage Hannover Stock Exchange XHAN brokerage Hamburg Stock Exchange XHAM brokerage Switzerland Swiss Stock Exchange XSWX brokerage Scoach Switzerland XQMH brokerage Hungary Budapest Stock Exchange XBUD brokerage Quote MTF QMTF brokerage Poland Warsaw Stock Exchange XWAR brokerage Russia Russia Stock Exchange RTSX brokerage Czech Republic, the Prague Stock Exchange XPRA brokerage Turkey Istanbul Stock Exchange XIST brokerage Slovakia Bratislava Stock Exchange XBRA brokerage Slovenia Ljubljana Stock Exchange XLJU brokerage Bulgaria Bulgarian Stock Exchange Sofia XBUL brokerage Romania Bucharest Stock Exchange XBSE brokerage Rasdaq XRAS brokerage Greece Athens Exchange XATH brokerage Ukraine Kiev International Exchange XKIS brokerage Serbia Belgrade Stock Exchange XBEL brokerage Estonia Tallinn Stock Exchange XTAL brokerage Latvia Nasdaq OMX Riga XRIS brokerage Lithuania Nasdaq OMX Vilnius XLIT brokerage Israel Tel Aviv Stock Exchange XTAE brokerage Italy Milan Stock Exchange XMIL brokerage Electronic Share Market MTAA brokerage United Kingdom London Stock Exchange XLON brokerage Virt-X XVTX brokerage BATS Europe BATE brokerage CHI-X Europe CHIX brokerage Nasdaq OMX Europe NURO brokerage Turquoise TRQX brokerage Markit BOAT BOAT brokerage Smartpool XSMP brokerage Ireland Irish Stock Exchange XDUB brokerage France NYSE Euronext - Euronext Pariz XPAR brokerage NYSE Euronext Alternext Paris ALXP brokerage NYSE Euronext Marche Libre Paris XMLI brokerage

8 Financial instruments Shares or other security papers of the same significance that represent share in capital or membership rights within a company, as well as receipts on deposited shares, and all other security papers that give the right to acquire or sell such transferable security papers or on the basis of which cash payments can be executed that is determined on the basis of transferable security papers, currencies, interest rates or yields, commodities, indices or other measuring units Country Institution description Code (MIC) Access Netherlands, the NYSE Euronext - Euronext Amsterdam XAMS brokerage NYSE Euronext - Alternext Amsterdam ALXA brokerage NYSE Euronext traded, not listed Amsterdam TNLA brokerage NYSE Arca Europe XHFT brokerage Belgium NYSE Euronext Euronext Bruxelles XBRU brokerage NYSE Euronext Alternext Bruxelles ALXB brokerage NYSE Euronext Trading Facility Bruxelles TNLB brokerage NYSE Euronext Marche Libre Bruxelles MLXB brokerage Portugal NYSE Euronext Euronext Lisabon XLIS brokerage NYSE Euronext MWQ Lisabon WQXL brokerage Sweden First North Stockholm FNSE brokerage Aktietorget XSAT brokerage Nasdaq OMX Nordic XSTO brokerage Burgundy Nordic MTF BURG brokerage Finland Helsinki Stock Exchange XHEL brokerage First North Finland FNFI brokerage Norway Oslo Stock Exchange XOSL brokerage Oslo Axess XOAS brokerage Denmark OMX Nordic Exchange XCSE brokerage First North Denmark XFND brokerage Spain Mercado Continuo Espanol XMCE brokerage Latibex XLAT brokerage Bolsa de Madrid XMAD brokerage United States of America New York Stock Exchange XNYS brokerage American Stock Exchange XASE brokerage Nasdaq XNAS brokerage Nasdaq NMS XNMS brokerage OTC Bulletin Board XOTC brokerage NYSE Arca ARCX brokerage OTC Bulletin Board other OTC OOTC brokerage Pink sheets OTC NQB PINX brokerage Pink sheets Grey Market PSGM brokerage Nasdaq Capital Market XNCM brokerage Nasdaq/NGS Global Select Market XNGS brokerage Canada Toronto Stock Exchange XTSE brokerage TSX Venture Exchnage XTSX brokerage Singapore Singapore Exchnage XSES brokerage Hong Kong Stock Exchange of Hong Kong XHKG brokerage Japan Osaka Securities Exchange XOSE brokerage Tokyo Stock Exchange XTKS brokerage Osaka Securities Exchange Jasdaq XJAS brokerage Australia Australia Securities Exchange XASX brokerage Bosnia and Herzegovina Sarajevo Stock Exchange XSSE brokerage Banja Luka Stock Exchange XBLB brokerage Montenegro, Republic of Montenegro Stock Exchange XMNX brokerage Macedonia Macedonian Stock Exchange XMAE brokerage

9 Financial Code Country Institution description instruments (MIC) Access Bonds, bills and Croatia Zagreb Stock Exchange XZAG direct money market Bosnia and Herzegovina Sarajevo Stock Exchange XSSE brokerage instruments Banja Luka Stock Exchange XBLB brokerage Montenegro, Republic of Montenegro Stock Exchange XMNX brokerage Macedonia Macedonian Stock Exchange XMAE brokerage Other (solely for acceptance of Bank's or RBI's offer) OTC / Derivatives Austria ÖTOB (Wiener Boerse, AG) XVIE brokerage Germany EUREX XEUR brokerage United States of America GLOBEX GLBX brokerage CBOT XCBT brokerage CBOE XCBO brokerage CME XCME brokerage Nymex XNYM brokerage Comex CECS brokerage Hungary Budapest Stock Exchange XBUD brokerage Poland Warsaw Stock Exchange XWAR brokerage United Kingdom NYSE Euronext Liffe XLIF brokerage ICE XCEU brokerage London Metal Exchnage XLME brokerage Singapore Simex SMEX brokerage Denmark CSE XCSE brokerage France Moneq XMON brokerage Switzerland Eurex XVTX brokerage Japan Osaka Exchange XOSE brokerage