Terms of Business for Finecobank Services in the United Kingdom

› Terms of Business for FinecoBank Services in the United Kingdom

Contents

The Agreement 3 Definitions 4 SECTION 1 General Terms 6 SECTION 2 Specific Terms 11 SECTION 2A Specific Terms for the Internet Banking and Telephone Banking Service 11 SECTION 2B Specific Terms for the Current Sub-Account and Multicurrency Services 12 SECTION 2C Specific Terms for Payment Services 13 SECTION 2D Specific Terms for Debit Card Services 16 SECTION 2E Specific Terms for Custody 18 SECTION 2F Specific Terms regarding Investment Services 20 SECTION 2G Specific Terms regarding the Interest-bearing portfolio service 24 SECTION 2H Specific Terms regarding to the Investment Funds Platform 26 SECTION 3 Data Protection Provisions 27 Annex I Order Execution Policy 31 Annex II Managing Conflicts of Interest Policy 38 Annex III Understanding Financial Instruments and Associated risks 39 Annex IV Client Classification 58 Annex V Depositor Information Template 59

The Agreement The Terms of Business and all communications the These Terms of Business together with the Fact sheet, Bank sends to you will be in English. You must commu- as well as any relavant attachment set out the agree- nicate with the Bank in English. ment (“Agreement”) between you, the Accountholder, and us, FinecoBank S.p.A. (the “Bank”). Who regulates the Bank The Bank is authorised by the Bank of Italy and subject The Bank provides services (“Services”), which are to limited regulation by the Financial Conduct Authority subject to the general terms set out in Section 1 (“Gen- and the Prudential Regulatory Authority in the UK. De- eral Terms”). Terms specific to particular services tails of the extent of the Bank’s regulation are available (“Specific Terms”) are set out in Sections 2A to 2G. In from the Bank on request. the event of conflict between these General Terms and any Specific Terms, the Specific Terms will prevail. The Bank is registered with the Bank Registry of the Bank of Italy (www.bancaditalia.it) and is the Parent The General Terms, the Specific Terms and the Bank’s Company of the FinecoBank Banking Group – regis- Data Protection Provisions (included in Section 3) (together the “Terms of Business”) along with docu- tered in the Register of Banking Groups (the “Group”). ments provided with these Terms of Business apply The Bank has been authorised by the Bank of Italy (via to all new and existing Bank clients from the date set Nazionale 91, 00184 Rome) to provide investment ser- out on the front cover and, replace any previous terms vices (authorisation n 039839 December 13th, 1999). agreed between you and the Bank. Any changes agreed between you and the Bank to previous: As the Bank is regulated by the Bank of Italy the reg- (a) general terms, will apply to these General Terms; ulatory system applying to it will be different from that and of the United Kingdom. In particular, the Services will (b) specific terms, will apply to the relevant Specific be subject to the Italian rules dealing with custody and Terms. compensation.

3 Definitions “Account” means a cash account that you hold with the Bank. Each Account includes a Current Sub-Account and Multicurrency Sub-Accounts. “Account Activity Statement” means the statement provided by the Bank in accordance with Clause 10 which sum- marises the Financial Instruments and cash held in your Accounts. “Accountholder” means the person or persons in whose name the Account is held. “Assets” means any investments or assets held in your Custody Account and any rights or benefits relating to those investments or assets (including any income derived on those investments or assets). This includes, but is not limited to, cash, Accounts, contract rights, all documents, instruments, and certificates relating to investments and securities, and all related interest, redemptions and distributions and all income, proceeds and products of the above. “Bank Statement” means the statement provided to you by the Bank in accordance with Clause 34 setting out the payments made to and from your Account. “Bank Transfer” means any of the following which is not an International Bank Transfer:

Payments to/from accounts in: Sterling (£) Euro (€) Other currencies carried out via BACS, SWIFT carried out via SEPA and SWIFT are carried out via SWIFT or Faster Payments

“Base Account Currency” means the currency of your Current Sub-Account, and for a Current Sub-Account held by clients resident in the UK this will be Sterling. For a Multi-Currency Sub-Account this will be either Euro, US Dollars or Swiss Francs or all of these currencies and any other currency that may be notified to you by the Bank, from time to time. “Collateral” means cash in currency acceptable to the Bank and if the Bank agrees any investments, securities, bonds, or any other financial instrument the Bank determines is acceptable. “Current Sub-Account” means a sub-account with the Bank in Sterling which can be used by you to make deposits and make and receive payments from third parties. “Custody Account” means an account either with the Bank or with a nominee named for your benefit (including anything held by the Bank’s agents, depository or custodian or on a clearing system). “Debit Card” means the debit card provided by the Bank allowing you to make payments from your Current Sub-Ac- count and withdraw cash from you Current Sub-Account. “Card PIN” means the personal identification number provided by the Bank for use with a Debit Card. “EEA” means the European Economic Area. “Execution Venue” includes a regulated market, an MTF, an OTF, a systematic internalizer, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing. “Fact Sheet” means a document provided by the Bank which sets out information in relation to certain Services offered by the Bank. “Fee Schedule” means the schedule of fees that applies to your Account. “Financial Instruments” means those products you are permitted to trade using your Account including, for example, shares, bonds, options, futures and units or shares in Investment Funds. “General Terms” means the terms and conditions in Section 1 of the Terms of Business. “Group” means the FinecoBank Banking Group registered in the Italian Register of Banking Groups. “Joint Account” means an Account where there is more than one Accountholder. “Inducement” means a fee, commission or other non-monetary benefit. “Instant Bank Transfer” means a transfer in Euro, executed between payment service providers in the Single Euro- pean Payment Area (SEPA) and in accordance with the rules in the SEPA Instant Credit Transfer Rulebook (SCT Inst) as approved by the European Payment Council, from time to time. “International Bank Transfer” means a payment to or from an account in a non-EEA country or in a non-EEA currency. “Internet Banking” means using the secure section of the Bank’s website or the Bank’s app to manage your Account and to deal in Financial Instruments. “Investment Funds” means units or shares in collective investment undertakings which are made available from time to time to buy and sell by the Bank through its Investment Funds Platform. “Investment Funds Platform”means the facility that the Bank provides that facilitates the purchase and sale of In- vestment Funds. “MiFID” means the Markets in Financial Instruments Directive II 2014/65/EU as supplemented and amended. “Multicurrency Service” means the service provided with your Account which allows you to hold cash, make and

4 receive payments, and trade Financial Instruments in Euro, US Dollars, or Swiss Francs or in any other currencies as notified to you by the Bank, from time to time. “Multicurrency Sub-Account” means an account which is provided by the Bank as part of the Multicurrency Service as set out in Section 2B. “Multilateral Trading Facility” or “MTF” means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments - in the system and in accordance with non-discretionary rules - in a way that results in a contract in accordance with the provisions of Title II of MiFID. “Order Execution Policy” means the Bank’s Order Execution Policy which can be found in the Annex I to these Terms of Business. “Organized Trading Facility” or “OTF” means a multilateral system which is not a regulated market or an MTF and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract in accordance with the provisions of Title II of MiFID. “Password” means the password set by you following activation of your Account, for use with Internet Banking and/ or Telephone Banking. “Payment Order” means any instruction given by you to make a payment from your Account. “PIN” means the personal identification number set by you following activation of your Account, for use with Internet Banking and/or Telephone Banking. “Regulated Market” means a multilateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments - in the system and in accordance with its non-discretionary rules - in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with the provisions of Title III of MiFID. “Representative” means a person authorised to operate your Account on your behalf. “Retail Client” means a customer who is neither a professional client nor an eligible counterparty as set out in Annex IV of these Terms of Business. “SDD” means the SEPA Direct Debit Core Scheme. “SDD B2B” means the SEPA Direct Debit Business to Business Scheme. “Security Details” means your Card PIN or any other security code associated with your Debit Card and any Pass- word, PIN or User ID associated with your Account. “SEPA Direct Debit” means a direct debit carried out in accordance with the European Payment Council’s Rulebook on SDD and/or SDD B2B. “Services” means the services provided by the Bank set out in Sections 2A to 2H of the Terms of Business. “Specific Terms” means the terms applying to the Services set out in Sections 2A to 2H of the Terms of Business. “Telephone Banking” means the service provided by the Bank which enables you to manage your Account and to deal in Financial Instruments by telephone. “Unique Identifier” means a combination of letters, numbers and/or symbols used to identify a bank account. “Systematic Internalizer” means an investment firm which, on an organized, frequent systematic and substantial basis, deals on own account when executing client orders outside a Regulated Market, an MTF or an OTF without operating a multilateral system. The frequent and systematic basis shall be measured by the number of OTC trades in the financial instrument carried out by the investment firm on own account when executing client orders. The substantial basis shall be measured either by the size of the OTC trading carried out by the investment firm in relation to the total trading of the investment firm in a specific financial instrument or by the size of the OTC trading carried out by the investment firm in relation to the total trading in the Union in a specific financial instrument. The definition of a systematic internaliser shall apply only where the pre-set limits for a frequent and systematic basis and for a substantial basis are both crossed or where an investment firm chooses to opt-in under the systematic internaliser regime. “TPP” means a third party provider who will provide certain online services to its clients so that they can have access to view and to manage their money being involved in the payment transaction. Account Information Service Providers and Payment Initiation Service Providers are two types of TPP that are authorized by law and by the Financial Conduct Authority (FCA) or another European Regulator to carry out these activities. An Account Information Service Provider provides online account information services consolidated information on one or more payment accounts held by the payment service user and if you have granted permission to them they will be able to access online transaction information from multiple providers in one place. A Payment Initiation Service can give payment instructions as if you are making a payment through them rather than the underlying payment provider. “Trading Venue” means a Regulated Market, or Multilateral Trading Facility, or Organised Trading Facility. “US Person” means someone who falls under the definition of “U.S. Person” under FATCA, including, but not limited to, citizens or residents of the United States and any person who meets the substantial presence test. “User ID” means the user ID provided by the Bank for use with Internet Banking and/or Telephone Banking. “Working Day” means any day other than a Saturday or Sunday or bank holiday in either the UK or in Italy.

5 SECTION 1 GGeneral Terms date of issue and will be renewed automatically for another two years. The Certificate is based 1. The Services on the Client’s identification data provided by 1.1. The Bank offers the Services using distance the Bank on Certifier’s mandate. Certifier must communications such as post, email, Internet comply with the security measures for personal Banking and Telephone Banking. data processing under Privacy Code. All docu- 1.2. To receive Services from the Bank you are re- ments signed are available on Bank’s website quired to: (“Contracts Archive”). The dissolution of these (a) provide the Bank with a valid email address Terms of Business for any reason whatsoever as evidence of your internet access; determines the revocation of its Certificate. (b) consent to the Bank contacting you using distance communications; 4. Appointing someone to operate your Account (c) be resident in the UK; on your behalf (d) be 18 years of age or older; 4.1. If you wish to appoint a Representative you must (e) and not be a US Person. complete the Power of Attorney Form available on 1.3. Any new services provided by the Bank will be the Bank’s website and return it to the Bank. In the subject to these General Terms and additional form, you will be asked to provide the Bank with an Specific Terms. example of the Representative’s signature and notify the Bank of any limitations imposed on the Rep- 2. When the Terms of Business become legally resentative’s authority in relation to your Account. binding on you 4.2. If you want to amend or terminate your Repre- 2.1. These Terms of Business will become binding on sentative’s authorisation in relation to your Ac- you and the Bank: count, you must notify the Bank in accordance (a) for new clients when you receive a copy with Clause 11. The amendment or termination of these Terms of Business that have been will become valid from 00:00h on the Working signed by the Bank (for the avoidance of Day following the Working Day on which the no- doubt, you are deemed to receive these tification was received by the Bank. Terms of Business at your email address, and 4.3. The Bank is not liable for any action taken by the the agreement between you and the Bank is Representative before the notification in Clause deemed to be concluded in the UK); or 4.2 becomes valid. (b) for existing clients, when the notice period referred to in Clause 19.3 has expired and 5. Identification requirements you have not notified the Bank that you wish 5.1. As part of the account opening process and on to terminate your Agreement with the Bank. the Bank’s request during the term of the Agree- ment, you must provide the Bank with details of 3. Choosing which services you receive your, and where relevant your Representative’s, 3.1. You can choose which Services you wish the identity (which may include your signature and Bank to provide you with during the account address) to allow the Bank to comply with its ob- opening process. If you subscribe for one Ser- ligations under applicable anti-money laundering vice you are not obliged to subscribe for any ad- legislation. ditional Services. However, you must subscribe for a Current Sub-Account for Payment Services, 6. Overdrafts a Multicurrency Sub-Account for Multicurrency 6.1. The Bank does not intend to allow an overdraft Services and Debit Card Services. for your Account. 3.2. You may subscribe for additional Services once 6.2. You must ensure that your Account is always in your Account with the Bank has been opened by credit and does not go overdrawn. If your Account notifying the Bank in accordance with Clause 11. goes overdrawn the Bank will notify you that you 3.3. Additional services will be activated by digital need to pay cash into your Account within 15 signature of the relevant contract. For this pur- Working Days and the Bank will cease to make pose You, or your Representative, must request any payments from your Account until the Ac- a qualified certificate (“Certificate”) issued by the count has been restored to a credit balance. Accredited Certification Authority In.Te.S.A. S.p.A. 6.3. If you fail to restore your Account to a credit bal- (“Certifier”), according to the Operations Manual, ance the Bank may restrict access and operation a copy of which expressly refers to the condi- of the Account and may exercise its right of set tions of use and is available on the Bank’s web- off or its right to sell Financial Instruments as set site. An electronic document signed with a digital out in Clause 7. signature, in compliance with the technical rules referred to in the relevant regulations, meets the 7. Rights the Bank has over your Account and requirements of a hard copy signed document. Custody Account According to Regulation (EU) No 910/2014 of 7.1. If you owe the Bank money which is due for pay- the European Parliament and of the Council of ment, the Bank can either: 23 July 2014 on electronic identification and (a) use the money in any of your Accounts to re- trust services for electronic transactions in the duce or repay the amount you owe the Bank. internal market and repealing Directive 1999/93/ This is the Bank’s right of set-off; or EC, a qualified electronic signature, based on (b) sell any Financial Instruments the Bank holds a qualified certificate issued in one Member for you in your Custody Account to reduce or State, shall be recognised as a qualified elec- repay the amount you owe the Bank. This is tronic signature in all other Member States. The the Bank’s right to sell Financial Instruments. Certificate is valid for 12 (twelve) months from 7.2. The Bank can use its right of set-off or its right

6 to sell Financial Instruments where you have Ac- 9. Making or receiving payments in a currency counts in your sole name or where you hold a other than a Base Account Currency Joint Account with another person as explained 9.1. Payments made from your Account will be made in the table below: in a Base Account Currency and then converted into the relevant foreign currency after they Account held by Right of set-off can be applied have been debited from your Account according against amounts owed on to the exchange rate applicable on the date that Accounts held by they have been debited. You can obtain details A A of the exchange rates that will be used from www.finecobank.com. A A and B 9.2. Payments made into your Account will be credit- A and B A and B ed to your Account in a Base Account Currency after being converted from the relevant foreign A and B A currency according to the exchange rate applica- A and B B ble for the day they have been credited. 9.3. You will be subject to additional fees for currency 7.3. Before the Bank exercises its right of set-off or its conversions. These are set out in the Fee Sched- right to sell Financial Instruments, the Bank will ule and are available on www.finecobank.com. send you a warning notice which: (a) sets out that the Bank intends to exercise its 10. Account Activity Statements right of set-off or sell Financial Instruments; and 10.1. The Bank will provide you with an Account Ac- (b) gives you an additional 10 Working Days to tivity Statement on a quarterly basis. This will be pay the outstanding amount to the Bank. sent to your email address. You may also request 7.4. Where the Bank exercises its right to sell Financial the Bank to send you an Account Activity State- Instruments, it will deduct the amount you owe it ment on a monthly basis. The Bank may charge from the money it receives from selling your Fi- you an additional fee for providing you with an nancial Instruments, net of any fees or expenses, Account Activity Statement more frequently than and pay any remaining balance into your Account. every quarter. 10.2. The Account Activity Statement will include: 8. Giving the Bank Orders and Instructions (a) a summary of all of the payments into and out 8.1. You may submit orders and instructions in rela- of your Accounts during the past year; tion to Financial Instruments and cash in your (b) a record of the orders in Financial Instru- Account by any of the following: ments executed for you by the Bank and all (a) Telephone Banking; of the Financial Instruments currently held in (b) Internet Banking; your Account and their market value as at the (c) any other method approved by the Bank. date of the Account Activity Statement; 8.2. If you submit an order for Financial Instruments (c) the current balance of your Accounts; and with no additional instructions, the Bank will de- (d) a Fact Sheet which includes any chang- termine how to execute the order in accordance es made to the Fee Schedule for your Ac- with its Order Execution Policy. counts. If no changes have been made to the 8.3. You may cancel any orders or instructions relat- Fee Schedule since the last Account Activity ing to Financial Instruments so long as the orders Statement was sent to you by the Bank, a have not been executed or the instructions have copy of the Fact Sheet will not be included with the Account Activity Statement. (Please not been acted on. If you have given the Bank note that you can access a copy of the cur- instructions to repeat an order on a regular basis, rent Fee Schedule on the Bank’s website, you may cancel these instructions at any time, www. finecobank.com). but this cancellation will not affect any orders 10.3. Where you hold more than one Account with the currently being processed. Bank, the Bank will send you an Account Activity 8.4. The Bank is not liable for failing to carry out any Statement for each Account. The Account Activ- orders or instructions in relation to your Account ity Statement will be sent to you within 30 Work- as a result of circumstances beyond the Bank’s ing Days of the end of the relevant period. control, for example if there is: 10.4. If you notice any errors including calculation er- (a) A major suspension or other interruption to rors, unauthorised payments, omitted payments public services or electrical power; or duplicate payments in the Account Activity (b) A strike; Statement, you must notify the Bank within 60 (c) A failure of the postal service; days who will correct these errors and pay you (d) A delay or other malfunction in the Bank’s compensation for any unauthorised, omitted or communications systems (including phone), IT duplicate payments. systems, or the internet. 8.5. You acknowledge that it may be possible to give 11. Communications from you to the Bank orders or instructions in relation to your Account 11.1. You may communicate with the Bank in relation by Telephone Banking if there is a delay or mal- to your Account by: function in the Bank’s IT systems or internet. (a) Telephone Banking; 8.6. If the Bank is unable to carry out your orders or (b) email; instructions for a reason set out in Clause 8.4, the (c) Internet Banking; Bank will immediately warn you and unless you (d) any other method approved by the Bank. cancel the order or the instruction, it will be exe- 11.2. The contact details for the Bank are: FinecoBank cuted on the next Working Day. S.p.A. Via Rivoluzione d’Ottobre, 16, Reggio Emil-

7 ia Italy Telephone number: 0800 640 6667 (from sufficient funds in the Account that has incurred UK); +44 (0)20 7065 7555 (from abroad). Email the taxes, costs, and other expenses, the Bank address: [email protected] will debit such taxes, costs, and other expenses 11.3. If you send the Bank a notification by: from any other Account that you hold with the (a) post: it will be deemed received 20 Working Bank. Days after you posted it; (b) Telephone Banking: it will be deemed to be 14. Joint Accounts received on the same day provided it was re- 14.1. For Joint Accounts, each Accountholder can give ceived before 5 p.m. on a Working Day and orders and instructions in relation to the Account, all verification codes and procedures have except in the following situations when the con- been complied with, or if it is received after sent of all the Accountholders is required: 5 p.m. or on a day that is not a Working Day, (a) to appoint the Representative in accordance on the next Working Day, unless otherwise with Clause 4.1; specified; (b) to give instructions in relation to an Account (c) email: it will be deemed received 48 hours where the Bank has been notified of a dis- after the time and date on which it was sent pute in accordance with Clause 14.3. or if that day that is not a Working Day, on the 14.2. The Accountholders’ obligations are joint and next Working Day; several. This means that the Accountholders (d) Internet Banking: it will be deemed received are all responsible individually and together for on the same day provided it is received be- complying with the obligations under the Terms fore 5 p.m. and all verification codes and pro- of Business. cedures have been complied with, or if it is 14.3. If there is a dispute between any of the Ac- received after 5 p.m. or on a day that is not a countholders, or if one Accountholder opposes Working Day, on the next Working Day. the action taken by another Accountholder, the Accountholders must notify the Bank. The Bank 12. Communications from the Bank to you will not be liable for any actions taken by any Ac- 12.1. The Bank will send all communications (includ- countholder until 15 Working Days after the notifi- ing the Account Activity Statement or any other cation has been received by the Bank. notice, account statement or report) to you ei- 14.4. Upon the death of an Accountholder, the As- ther by: sets held in the Account that belonged to the (a) post, to the address specified by you in the deceased will be subject to any Italian tax law account opening document or as subse- rules that may apply. If an Accountholder dies, quently notified to the Bank in accordance the Account may be suspended pending ascer- with Clause 11; taining the remaining Accountholder’s right to it (b) email, to the email address specified by you which would be subject to any rights that any in the account opening document or as sub- person (for example a beneficiary under the will sequently notified to the Bank in accordance of the Accountholder that has died) may have with Clause 11; or in respect of the Account. If an Accountholder (c) Internet Banking. has become mentally incapable, provided the 12.2. Unless otherwise specified, all communications Bank has received a valid power of attorney, sent to you by the Bank will be considered to be the Representative will be able to exercise that approved by you unless, within 60 days of re- Accountholder’s rights in relation to the Joint ceipt by you of the communication, you notify the Account. Bank that you dispute its contents. 14.5. In the event of death of an accountholder, the 12.3. For Joint Accounts, a communication given to Account may be subject to fiscal and/or admin- one Accountholder will be deemed to have been istrative requirements. received by all Accountholders. 12.4. You must promptly notify the Bank of any change 15. Recording Conversations in your contact details. 15.1. You authorise the Bank to record all telephone calls and other electronic communications (such 13. Fees and other expenses as email) between you and the Bank. 13.1. All fees payable by you to the Bank in connection with this Agreement are set out in the Fee 16. Limited Liability Schedule, available on www.finecobank.com. 16.1. The Bank is not liable for any and all losses: 13.2. Unless otherwise specified, the Bank will debit (a) that were not foreseeable by you or the Bank all fees referred to in Clause 13.1 from your Cur- when the Agreement was formed; rent Sub-Account. If you have multiple Accounts (b) caused by events outside the Banks control, with the Bank, and there are insufficient funds in for example: the Account that has incurred the fees, the Bank i. changes in UK, EU or Italian legislation; will debit such fees from any other Account (in- ii. a major suspension or interruption of cluding any Joint Account) that you hold with the public services or electrical power; Bank. iii. strikes; 13.3. Subject to applicable law, in addition to the fees iv. failure of the postal service; set out in the Fee Schedule, you will be liable for v. delays or other malfunctions in the all taxes, costs, and other expenses incurred by Bank’s communications systems (includ- the Bank in relation to your Account. The Bank ing phone and email), IT systems, or the may deduct any such taxes, costs and other ex- internet; and penses from your Account or, if you have mul- (c) caused as a result of its compliance with ap- tiple Accounts with the Bank, and there are in- plicable UK, EU or Italian law.

8 17. Cancelling this Agreement 18.6. On termination, the Bank will execute any unex- 17.1. For 14 days from the date on which this Agree- ecuted orders or instructions in relation to your ment becomes binding on you, in accordance Account or the particular Service. The Bank may with Clause 2.1 (a), you have the right to cancel suspend any such unexecuted orders or instruc- this Agreement without incurring any penalties or tions if it has a valid reason, including if you do giving any reasons, by giving the Bank notice by not have sufficient funds in your Account. Internet Banking. 18.7. If you terminate the whole Agreement the Bank 17.2. If you exercise your right to cancel this Agree- will ask you for instructions in relation to any ment: money or Financial Instruments in your Account (a) the Agreement will be terminated and Clause or Custody Account. If you fail to give the Bank 18 will apply; and such instructions the Bank will transfer any mon- (b) you will only be charged for those Services ey or Financial Instruments into a separate ac- that the Bank has provided you with in account and hold them until it receives instructions cordance with the Agreement. from you. 17.3. The cancellation right does not apply to Invest- 18.8. You will not be charged any penalties or exit fees ment Services: if you or the Bank terminate an individual Service (a) relating to Financial Instruments whose price or the Agreement. depends on fluctuations in the financial mar- 18.9. The Bank will be unable to close your Account ket outside the Bank’s control, such as: or Custody Account until you have paid the Bank i. foreign exchange; any money that you owe it under the Agreement. ii. money market instruments; The Bank will notify you in accordance with iii. transferable securities; Clause 12 when your Account has been closed. iv. units in collective investment undertak- 18.10. If you or the Bank terminate the whole Agree- ings; ment you must send the Bank any Debit Cards v. financial-futures contracts, including associated with the Account. You must destroy equivalent cash-settled instruments; the Debit Card by cutting it into at least six pieces vi. forward interest rate agreements; before returning the card to the Bank. The Bank vii. interest rate, currency and equity swaps; will block the Debit Card once the Account has or been closed. viii. options to acquire or dispose of any instruments referred to above including 19. When the Bank can change the Agreement cash-settled instruments and options on 19.1. The Bank may change this Agreement for any currency and on interest rates. justified reason, for example to: (b) Whose performance has been fully complet- (a) comply with new legislation, regulatory provi- ed by both you and the Bank at your express sions or surveillance requirements; request before you exercise your right to (b) adapt to technological developments; cancel. (c) allow an existing Service to be provided in a different way; 18. How long the Agreement lasts and how to end it (d) vary interest rates to reflect changing condi- 18.1. This Agreement will continue until it is cancelled tions in the financial markets; in accordance with Clause 17 or terminated by (e) reflect changes to the Bank’s corporate you or the Bank. structure; or 18.2. You may terminate an individual Service or the (f) reflect a rise in costs related to a particular whole Agreement at any time by giving the Bank Service. 1 Working Day’s written notice to the address set 19.2. Where aspects of this Agreement relate to inter- out in Clause 11. est rates which are based on a reference rate, 18.3. The Bank may terminate an individual Service or those interest rates may change immediately to the whole Agreement by giving you 7 Working reflect changes to reference rates. The Bank will Days’ written notice in accordance with Clause 12. notify you of any such change in interest rates as 18.4. The Bank may terminate the whole Agreement soon as possible. and stop providing Services and close your Ac- 19.3. The Bank will give you at least 2 months’ ad- count immediately if: vance written notice of any change to this Agree- (a) you have seriously and/or persistently ment, except for the Investment Services, which breached the Terms of Business; will have a 30 days’ advance written notice. (b) you become insolvent or are subject to bank- 19.4. If you do not want to accept a change to the ruptcy or insolvency proceedings; Agreement you can terminate the Agreement in (c) you give the Bank false information; accordance with Clause 18 and the Bank will not (d) you commit or attempt to commit fraud charge you any penalties or exit fees. If you do against the Bank or someone else; not terminate the Agreement before the chang- (e) you use or allow someone else to use your es come into effect you will be treated as accept- Account illegally or for criminal activity; ing the change. (f) you use your Debit Card when it has been 19.5. You can contact the Bank at any time to request blocked or suspended by the Bank; or an up to date copy of this Agreement in either a (g) it is necessary to comply with applicable law. paper or electronic format. 18.5. Where you have a Joint Account, an individual Accountholder can terminate an individual Ser- 20. Access to your Account vice or the whole Agreement. That Accounthold- 20.1. The Bank may block access to your Account user must then notify the other Accountholders of ing Internet Banking and/or Telephone Banking the termination. where it knows or suspects:

9 (a) there are issues with the security of your 22.3. The Bank will always aim to resolve your com- User ID, Password and/or PIN; plaint as soon as possible. If your complaint or (b) that your User ID, Password and/or PIN has relates to a payments service issue (including been subject to unauthorised or fraudulent but not limited to complaints about money re- use; or mittance, payment charges and fees, access to (c) there is a high risk of you not complying with payment and account data, payment authentica- your payment obligations to the Bank. tion and payment orders and transactions) the Subject to applicable law, the Bank will notify you Bank will write to you with a final response within of any block before or immediately after access 15 Working Days of receipt of your complaint or to your Account using Internet Banking and/or an explanation as to why the Bank needs more Telephone Banking has been blocked or sus- time to address the complaint in which case, in pended. Once the issue which causes access to the event that the circumstances are exceptional your Current Sub-Account using Internet Bank- the Bank shall have up to 35 Working Days to re- ing and/ or Telephone Banking to be blocked spond to your complaint. For all other complaints has been resolved, the Bank will remove the the Bank will provide you with a response within block. 8 weeks of receiving the complaint. 20.2. You can authorize a TPP to access information on 22.4. If the Bank has not been able to resolve any your Account and to make payments from your complaint you make about its products and ser- Account, provided that the TPP is appropriately vices within the applicable timeframe in clause authorized by a relevant European regulator and 22.3, or if you are not satisfied by the Bank’s you have given clear consent. If you instruct a response, you can refer your complaint to the not authorized TPP, we will assume that you are Financial Ombudsman Service. If you want to authorizing us to permit TPP to have access to contact the Financial Ombudsman Service, you information about your accounts. You will be re- will need to do this within six months from receipt sponsible for any payments made in result. The of the Bank’s final response to you. The Bank has TPPs must act in accordance with relevant reg- joined the voluntary jurisdiction of the Financial ulatory requirements and be transparent about Ombudsman Service in the UK. its identity, so we can identify who they are. To find out more about the service, you can: Where we grant access to a TPP, the Bank will (a) visit: www.financial-ombudsman.org.uk; or treat any instruction from the TPP as if it was from (b) write to: you, whereby all the terms and conditions of this The Financial Ombudsman Service Exchange Agreement will still apply. Tower London E14 9SR; or 20.3. The Bank may refuse a TPP access to your ac- (c) phone them on: 0800 0234 567 or 0300 count or to accept payment instructions sent on 1239 123; or your behalf if it reasonably considers that there (d) fax them on : 020 7964 1001; or has been any unauthorised or fraudulent access (e) email them at: complaint.info@financial-om- to your account by a TPP. budsman.org.uk. 20.4. If you have given consent to a TPP to view and The European Commission has established initiate payments on your Account you are allow- an online dispute resolution platform (ODR ing the Bank to share your personal information platform). This is specifically designed to help with the TPP as required for them to provide their customers resident in the European Union who service to you. You have the right to withdraw have bought goods and services online from consent to the TPP if you no longer want them traders established in the European Union but to access your Account to view and initiate pay- were unable to get their complaint resolved to ments on your behalf. Should you wish to termi- their satisfaction. As discussed above, if you are nate your authority you will need to inform the not satisfied by the Bank’s resolution of your Bank and the TPP. complaint and you have signed up for services online, you can submit your complaint online 21. Governing Law and Jurisdiction through the ODR platform in any of the official 21.1. This Agreement and any non-contractual obliga- languages of the European Union. The platform tions arising from or connected with it shall be will then send your complaint to the Financial governed by English law and this Agreement Ombudsman Service for an independent review shall be construed in accordance with English within 90 days. However, as discussed above, law. you may also contact the Financial Ombudsman 21.2. Any dispute which arises in relation to this Agree- Service directly. ment shall be dealt with by any court in the UK For more information, you can access the plat- which is able to hear the case. form directly at: http://ec.europa.eu/odr. As the Bank’s customer, you may use this service 22. What to do if you have a complaint if you are still resident in the European Union and 22.1. If you have a complaint about the service provid- you purchased your product or service with the ed by the Bank, you should send a written notice Bank online. giving details of the complaint by post or email to You will need the following information: The the Bank using the details below: Bank’s name: FinecoBank S.p.A.. Email: [email protected] The Bank’s email: [email protected] Address: Complaints Office, FinecoBank S.p.A., The Bank’s website address: www.finecobank. Piazza Durante 11, 20131 Milan (MI), Italy com. 22.2. Complaints with regard to Joint Accounts will re- The country the Bank is based in: Italy. quire a complaint to be filed by at least one of the The Bank’s address: Via Marco D’Aviano 5, 20131, Joint Account Accountholders. Milan (MI), Italy.

10 22.5. The decision of the Financial Ombudsman is not 26.2. You can carry out Telephone Banking using the legally binding on you or the Bank. If you do not phone number set out in Clause 11 of the General accept the decision of the Financial Ombudsman Terms. Service, you can still go to court (although the statute of limitations will still apply). You will also 27. Strong Authentication be able to inform the Financial Ombudsman Ser- 27.1. In accordance with applicable law, the Bank will vice if you do not wish to take your complaint any use a strong customer authentication procedure further with them. in order to protect your data and the security of the transactions that you execute through the In- 23. Compensation ternet Banking service. 23.1. The Bank has signed up to the Interbank Fund for Protecting Deposits. The Interbank Fund for 28. User ID, Password and PIN Protecting Deposits is a compulsory union reg- 28.1. The Bank will provide you with a User ID, Pass- ulated by Private Law, recognised by the Bank word and PIN to access Internet Banking and of Italy and whose activity is disciplined by the Telephone Banking. Statute and Regulations. The purpose of the 28.2. You can only access Internet Banking or Tele- Interbank Fund for Protecting Deposits is to act phone Banking by using your User ID, Password as guarantor of depositors belonging to Banks and PIN. which are part of the consortium. They are under 28.3. You must take all reasonable steps to keep the the obligation to provide financial resources nec- User ID and Password secret and must not share essary for the purposes of the Interbank Fund for them with anyone else for any reason, including Protecting Deposits. The maximum amount of Bank employees. You must never write your User cover per depositor is € 100,000. ID, Password and PIN down in the same docu- 23.2. The Bank has signed up to the National Guar- ment or on documents that you keep together. If antee Fund. The National Guarantee Fund pro- you think that someone else knows your User ID, vides an indemnity for investors, subject to cer- Password and PIN you must notify the Bank who tain terms and conditions, for all credits conse- will reset them for you. quential to Financial Instruments or cash related to investment transactions with operators who 29. Security credentials have signed up to the National Guarantee Fund. 29.1. In order to increase the quality of security over your Account and your transactions, you must 24. “Tax Declaration Regime” Option use, in accordance with the modalities specified 24.1. Please be informed that Option of the “Tax Dec- by the Bank, one of the following security cre- laration Regime” - pursuant to Article 5 of legis- dentials: lative decree No. 461 of 21 November 1997 - is (a) an SMS PIN, which is a one-off code that we applicable; note that by making this election you will send to your mobile phone number and elect to withdraw from the default Administrative should be used in addition to the PIN con- Tax Regime pursuant to Article 6 of legislative firmation for your transactions. You can find decree No. 461 of 21 November 1997, becom- further information about this on the Bank’s ing obliged to disclose any capital gains, net of website. capital losses, in an annual tax return. As a consequence of this election the clients confirm to (b) a Mobile Code, which is a software based be aware that the Bank will not apply any tax on PIN-protected code generator application capital gains arising from all transactions relating which is available via the Bank’s app. This will to securities deposited into the deposit account. generate authorisation codes for your Inter- Clients are invited to consult their own tax ad- net Banking service. visors and seek advice on the tax treatment of their investments pursuant to the Bank home 30. Biometrical Recognition State legislation. 30.1. Alternatively to the procedures described in previous clauses, if you have a mobile phone with the biometrical recognition technology, you can SECTION 2 Specific Terms - using your biometrical data - identify yourself SECTION 2A Specific Terms for the Internet Banking on the Bank’s app and carry out certain trans- and Telephone Banking Service actions. 30.2. The Bank will not have access to the biometri- 25. Internet Banking and Telephone Banking cal data relating to you, nor will the Bank store 25.1. The Bank allows you to manage your Accounts or share information related to them on its own using Internet Banking and Telephone Banking. servers. 25.2. Internet Banking and Telephone Banking are 30.3. You are responsible for the registration of your only available for certain Services. The Bank’s biometric data. You are also responsible for website sets out which Services can be ac- the custody and the correct use of your mobile cessed using Internet Banking or Telephone phone. You shall adopt every appropriate and Banking. precautionary measure to protect the security of your biometric data. 26. How to Access Internet Banking and Telephone 30.4. The Bank reserves the right, subject to prior no- Banking tification to you, to introduce new modalities to 26.1. You may access Internet Banking by using a per- identify you biometrically for accessing the Inter- sonal computer with internet access or any other net Banking or the Telephone Banking services device capable of accessing the internet. and/or for the authorisation of transactions.

11 31. Your responsibilities nected to your Account. 31.1. You are responsible for using the Internet Bank- 34.3. You may request more frequent Bank Statements ing and Telephone Banking services in accord- but this may incur additional cost. ance with these Terms of Business. 31.2. You must follow the Bank’s instructions in relation 35. Multicurrency Service to the use of Internet Banking and Telephone 35.1. The Multicurrency Service will be provided as Banking. You are liable for any damages that part of your Account. the Bank and / or any third party may suffer as a 35.2. The Multicurrency Service allows you, through result of your failing to follow these instructions. a Multicurrency Sub-Account, to hold cash, and 31.3. You are responsible for all transactions carried make and receive payments for Financial Instru- out in connection with your Account by Internet ments where these payments are denominated Banking or Telephone Banking using your User in the currencies (other than in Sterling) available ID, Password, Pin and security credentials. for the Multicurrency Service. The Multicurren- 31.4. If your User ID, Password, Pin and/or security cy Service will also allow you to trade Financial credentials is lost or stolen, you must notify the Instruments that are denominated in currencies Bank, using the telephone number set out below. (other than in Sterling) available for the Multicur- The Bank will then block access to your Account rency Service. through Internet Banking and Telephone Bank- 35.3. The currencies available for the Multicurrency ing. If your User ID, Password, Pin and/or security Service are Euro, US Dollars, and Swiss Francs. credentials has been stolen you may be asked 35.4. From time to time, the Bank may notify you that to provide the Bank with additional information. new currencies are available for use under the Helpline numbers: Multicurrency Service. You can select the new Toll free from the UK: 0800 640 6667 currencies by accessing the specific section of From abroad: +44 020 7065 7557 the reserved area on the Bank’s website and 31.5. The Bank has the right to suspend or terminate accepting all the relevant terms and conditions. the Internet Banking service, at any time and 35.5. For Joint-Accounts, each Accountholder can se- even without prior notice, for safety/security rea- lect a new additional currency. In this instance, son or due to potential fraudulent or unauthor- Accountholder must notify all the other Ac- ised use of the service. countholder of this decision. The Bank will notify Unless otherwise provided by applicable law, the all Accountholders when the new additional cur- Bank shall notify you of the suspension of the In- rency has been activated on the Account. ternet Banking service by SMS, phone, or e-mail, 35.6. Any interest or additional fees associated with a in advance, where possible, or immediately after- particular Multicurrency Sub-Account (for exam- wards. The Bank is not liable for such temporary ple interest on any balance or fees in relation to suspensions, if any, or for the termination of the payments) will be calculated only in relation to service. the balance and transactions for that Multicurren- cy Sub-Account. The Bank will apply any such 32. Excluding Services from Internet Banking and interest and fees to that Multicurrency Sub-Ac- Telephone Banking count in the relevant currency for that Multicur- 32.1. If you no longer wish to access a Service using rency Sub-Account. Internet Banking or Telephone Banking you must 35.7. If you make a payment from a Multicurrency notify the Bank. Where you have a Joint Ac- Sub-Account it will be made in the chosen cur- count, only one Accountholder needs to notify rency of that Multicurrency Sub-Account, if you the Bank. receive a payment into your Account which is in a currency of one of your Multicurrency Sub-Ac- count it will automatically be credited in the same SECTION 2B Specific Terms for the Current Sub-Ac- currency to Multicurrency Sub-Account. count and Multicurrency Services 36. Money Map Service 33. Payments into your Current Sub-Account 36.1. The Money Map Service allows you to view, or- 33.1. Payments may be made into your Current ganise and manage transactions made to and Sub-Account by Bank Transfers. from your Current Sub-Account by placing each Any cash received into your Account from third transaction to or from your Account into transac- parties (such as payments related to sale of Fi- tion categories that have been set up by you or nancial Instruments) will be placed into your Cur- the Bank. rent Sub-Account. 36.2. Using the information transmitted with a trans- 33.2. Section 2C of these Terms of Business sets out action, the Money Map Service automatically when a payment made into your Current Sub-Ac- places each transaction to or from your Current count by Bank Transfer will be credited to your Sub-Account into a specific transaction category. Current Sub- Account. If the Money Map Service is unable to categorise a transaction it will be placed into the “other” 34. Bank Statements transaction category. If you disagree with the cat- 34.1. The Bank will provide you with Bank Statements. egory that the Money Map Service has placed a If your Account is inactive for more than 1 year transaction in, you may always move a particular and the balance is less than £250, the Bank will transaction to a different transaction category. stop providing Bank Statements. 36.3. The Money Map Service does not include trans- 34.2. If you terminate your Account the Bank will pro- actions related to trading Financial Instruments vide you with a final Bank Statement 30 Working or transfers and transactions related to the Multi- Days from the date of the last transaction con- currency Sub-Account.

12 36.4. The Bank can suspend or terminate the Money the types of payment the Bank can make); or Map Service at any time. The Bank will notify you (k) the Bank considers that your Account has of any such suspension or termination by email been or is likely to be misused. or text message. 38.4. The limits applicable to payments made from your Account are set out on the Bank’s website. 37. How to end the Current Sub-Account Service 38.5. The Bank may refuse to accept a payment into 37.1. If you terminate the Current Sub-Account Service your Account or make a payment from it if it in accordance with Clause 18 of these Terms of reasonably believes that doing so may cause Business you will also terminate any other Ser- the Bank (or another company in the Group) to vices provided in connection with the Current breach a legal requirement, or expose the Bank Sub-Account such as the Money Map Service, (or another company in the Group) to action from the Payment Services and the Card Services. any government or regulator. 38.6. If the Bank refuses to carry out a payment it will, subject to applicable law, notify you of: SECTION 2C Specific Terms for Payment Service (a) the refusal; (b) the reasons for the refusal; and These Specific Terms apply to Bank Transfers includ- (c) if applicable, the procedure for remedying ing: any issues that led to the refusal. (a) payments in Sterling; (b) payments in Euro carried out between bank 39. Payment Orders accounts held in countries that are SEPA 39.1. The time of receipt of a Payment Order is when it Scheme Countries; is actually received by the Bank. Cut-off times for (c) payments in Euro other than payments de- various types of Payment Orders are specified scribed in paragraph (b) above; on the Bank’s web-site. (d) payments in an EEA currency other than Euro 39.2. If you request that a payment is to be carried out payments where the accounts of both payer in the future, for example, on a specific day, the and payee are held in the EEA; Payment Order will be deemed received on that (e) payments in a non-EEA currency. specific day (providing it is a Working Day). Additional terms as set out in Section 2D will apply to 39.3. Payment Orders sent using Internet Banking or payments made by using a Debit Card. Telephone Banking are deemed to be received at the time specified on the Bank’s website if or- 38. Making payments from your Account. dered within the prescribed cut-off times. 38.1. You can make payments from your Account by placing a Payment Order in accordance with 40. Incoming Payments Clause 39. 40.1. Payments in Sterling can be made into your Cur- 38.2. The Bank will carry out a payment provided you rent Sub-Account by direct transfer from another have authorised it in accordance with Clause 39 account or direct transfer from international ac- and you have sufficient funds in your Account in counts in other currencies. Cut-off times for each the relevant currency. type of payment are specified on the Bank’s 38.3. The Bank may refuse to carry out a payment, and web-site or in the documents attached. will not be liable for any losses to you as a result 40.2. Payments in Multicurrency Services currencies of such refusal, if:- will be credited to the relevant Multicurrency (a) it does not contain the required information Sub-Account. as set out in Clauses 52, 54, 56, 57, 58, 66; 40.3. Payment in currencies other than Sterling or in (b) the Payee’s Bank does not comply with any the Multicurrency Services currencies will be required interbank protocols; converted into Sterling in accordance with the (c) the payment is contrary to applicable law; foreign currency conversion terms and times (d) you do not have sufficient funds in your Ac- specified in the reserved area on the Bank’s count in the relevant Currency; website before being deposited to your Current (e) you fail to produce additional identification as Sub-Account. requested by the Bank or prevent the Bank 40.4. If the Bank is notified that money has been paid carrying out the transaction (for example, if it is in to your Current Sub-Account by mistake, the for more than the maximum amount the Bank Bank can take an amount up to the mistaken pay- sets at any point in time) – the Bank will let ment amount from your Current Sub-Account. you know if it stops a payment for this reason; The Bank does not have to ask you to agree to (f) the payment seems unusual compared with this, but will let you know if it happens. The Bank the way you normally use your Account, in will act reasonably and try to minimise any incon- which case the Bank may investigate further, venience to you. for example by calling you; (g) the Bank reasonably believes that someone 41. Information we need to credit a Bank Transfer else (other than a TPP) may have rights over 41.1. In order to Credit a Bank Transfer to your ac- money in your account (in this case the Bank count, the Bank will need the unique ID IBAN can also ask – or require you to ask – a court or bank account code and sort code relating to what to do, or do anything else the Bank rea- the bank and the account the transfer is coming sonably needs to do to protect itself); from. (h) the Bank considers there is a fraud risk; (i) the Bank is ordered to do so by a Court; 42. Execution times (j) the Bank is not able to send the payment (for 42.1. For SEPA (i.e. Euro to Euro) payments, 1 Working example if the payee’s bank does not accept Day.

13 42.2. For Swift payments: 47. Notice of unauthorised payments or incorrect (a) Sterling to Sterling, 1 Working Day; payments (b) from Euro account, 2 Working Days; 47.1. If you notice an unauthorised payment or an (c) in all other cases, 3 Working Days. incorrect payment from your Account you must 42.3. The above execution times refer to the Payment promptly, and within 13 months of the payment in Orders confirmed within the daily cut-off times, question, give the Bank written notice. available in the reserved area on the Bank’s 47.2. Upon receiving such notice, the Bank will imme- website. diately refund your Account with the amount of the unauthorised payment and restore your Ac- 43. Giving your consent to payments count to the position it would have been in had 43.1. You must give your consent to a payment by In- the unauthorised payment not occurred. ternet Banking or Telephone Banking. You will be 47.3. If the Bank suspects fraud or believes that you deemed to have given your consent to a pay- did in fact authorise the payment, the Bank has ment from your Current Sub-Account using Inter- the right to not refund your Current Sub-Ac- net Banking or Telephone Banking if you provide count until its investigations are complete. Sub- the Bank with the security information the Bank ject to applicable law, the Bank will notify you of asks for and the relevant payment details. this in accordance with Clause 12 of the General 43.2. You may withdraw your consent for Payment Terms. Orders via the Internet Banking service or Tele- 47.4. If the Bank makes the refund in accordance with phone Banking service at any point before the Clause 47.2 but subsequently obtains evidence Bank’s daily cut-off times as specified in the -re that the payment had been authorised by you, served area on the Bank’s website or in the doc- it may demand you repay the refunded amount. uments attached. 48. Fees 44. The Bank’s liability to you 48.1. You authorise the Bank to debit your Account 44.1. The Bank is responsible for carrying out pay- with any fees (as set out in the Fact Sheet) asso- ments using the Unique Identifier provided by ciated with payments. In addition, you authorise you. the Bank to bill your Account with the following 44.2. The Bank is not liable for failing to carry out, or fees, details of which are set out in the Fact carrying out incorrectly, payments where you Sheet: (a) fees associated with the recovery of a pay- have failed to use the correct Unique Identifier ment where the wrong Unique Identifier has notwithstanding any other information provided been used; and by you to the Bank. (b) all other commissions and fees associated 44.3. If the Bank fails to carry out, or carries out incor- with payments made to or from your Account. rectly, a payment where you have failed to use 48.2. Subject to Clause 48.3, the Bank apportions any the correct Unique Identifier, you can request the fees associated with a payment in accordance Bank to find out where the payment was depos- with one of the following protocols: ited. (a) you will pay the Fees charged by the Bank and the payee will pay the fees charged by 45. Your liability for operations directed at specific their bank (SHA protocol); countries – exclusion of Bank’s liability (b) all Fees will be paid by the payee (BEN pro- 45.1. If the Bank incorrectly transfers funds into your tocol); Current Sub-Account it has the right to deduct (c) all Fees will be paid by you (OUR protocol). the amount of the incorrect transfer from your 48.3. The Bank will automatically apportion fees using Account. the SHA protocol unless: 45.2. You are responsible for all costs and expens- (a) you requested the Bank to use either the es incurred by the Bank (as set out in the Fee BEN or the OUR protocol for international Schedule) or the payee’s bank imposed on you payments that involves currency conversion; in connection with an International Bank Transfer. or (b) you requested the Bank to use either the 46. Bank’s Liability for improper or failed execu- BEN or the OUR protocol for the payments tion other than Sterling or Euro to EEA countries 46.1. If the Bank failed to carry out your payment or (SEPA payments included). carried it out incorrectly, the Bank is liable, unless it can show that the payee’s bank failed to carry 49. Bank Communications out the payment or carried it out incorrectly. 49.1. The Bank will provide you with details of the 46.2. If the Bank failed to carry out your payment, or maximum execution time and costs imposed on carried it out incorrectly, you must notify the you for each payment that you ask the Bank to Bank in accordance with Clause 11 in the Gen- execute before the relevant payment from your eral Terms. The Bank will immediately refund Account is ordered from. your Current Sub-Account with the amount of the 49.2. The Bank will make information concerning each non-executed or incorrectly executed payment payment and transaction into and out of your Ac- and any charges that you have paid as a result count and all applicable charges available to you of that payment. through Internet Banking. 46.3. In the case of improper execution, you may 49.3. Information related to payments is provided by choose not to claim a refund but to keep or rec- the Bank to you in accordance with Clause 10 of tify the payment, by informing the Bank of your the General Terms. choice in writing. 49.4. You may ask the Bank to provide you with more

14 frequent information or to use a communication 56. Information required to make a NON SEPA method not set out in these Terms of Business. If Bank Transfer in Euro the Bank agrees to your request, it may charge 56.1. You must provide the Bank with the following you additional fees. details: (a) name, surname or legal name of the payee; 50. How to end Payment Services (b) payee’s IBAN code or account number; 50.1. You and the Bank can terminate the Payment (c) payee’s bank; Service in accordance with Clause 18 of the Gen- (d) country; eral Terms. Subject to Clause 18.4, the Bank is (e) currency; required to give you 60 days’ notice if it intends (f) amount; to terminate the Payment Services. (g) BIC; and (h) other information based on an individual 51. Liability for unauthorised use of your User ID, country’s specific requirements. Password, PIN and/or security credentials 51.1. Unless you have acted fraudulently, you will not Part D. Specific Terms for payments in an EEA cur- be liable for any losses connected with pay- rency other than Euro where the accounts of both ments using your User ID, Password, PIN and/ payer and payee are held in the EEA. or security credentials after you have notified the Bank of their loss, theft, misuse or suspected 57. Information required to make a EEA Bank misuse in accordance with Clause 31. Transfer 51.2. If you have acted fraudulently or with gross negli- 57.1. To make a EEA Bank Transfer from your Current gence in failing to promptly notify the Bank of the and Multicurrency Sub-Account you must pro- loss, theft, misuse or suspected misuse of your vide the Bank with the following details: User ID, Password, PIN and/or security creden- (a) name, surname or legal name of the payee; tials in accordance with Clause 31, you will be lia- (b) payee’s IBAN and BIC code; ble for all losses associated with such loss, theft, (c) name of payee’s bank; misuse or suspected misuse. (d) country of payee’s bank; (e) currency; Part A. Specific Terms for payments in Sterling. (f) amount; and (g) any different details that the Bank may require. 52. Information required to make a Bank Transfer in Sterling Part E. Specific Terms for payments in non- EEA cur- 52.1. To make a Sterling Bank Transfer from your Cur- rencies rent Sub-Account you must provide the Bank with the following details: 58. Information required to make a non- EEA cur- (a) name, surname or legal name of the payee; rency Bank Transfer (b) account number and sort code 58.1. To make payments in a currency other than EEA (c) currency; Member State from your Current and Multicur- (d) amount; and rency Sub-Account you must provide the Bank (e) any different details that the Bank may re- with the following details: quire. (a) name, surname or legal name of the payee; (b) payee’s IBAN code or account number; Part B. Specific Terms for SEPA payments. (c) payee’s bank; (d) country; 53. Specific Terms for SEPA Bank Transfers Limits (e) currency; 53.1. You can make the Single Euro Payments Area (f) amount; (SEPA) transfers from a Multicurrency Sub-Ac- (g) BIC; and count in Euros. (h) other information based on an individual 53.2. You may receive SEPA Bank Transfers for any country’s specific requirements. amount. Part F. Specific Terms for SEPA Direct Debit 54. Information required to make a SEPA Bank Transfer 59. SEPA Direct Debit 51.1. To make a SEPA Bank Transfer you must provide 59.1. The SEPA Direct Debit is a payment service that the Bank with the following details: allows for the transfer of funds in Euros from your (a) name, surname or legal name of the payee; Account (both on a one-off and recurring basis), (b) payee’s IBAN code; initiated by a payee, on the basis of a mandate (c) amount; from you giving pre-authorisation to debit your (d) date of payment; and Account in favour of the payee (“Mandate”). In (e) reason for the payment. order to participate in this service, both you and the payee must each hold an account with a par- Part C. Payments other than payments described in ticipant located within SEPA. Part B above. The SEPA Direct Debit consists of two schemes: (a) SEPA Core Direct Debit (SDD); and (b) the 55. Euro payments to countries other than Sepa SEPA Direct Debit Business to Business (SDD countries B2B). The SDD B2B is only available for business 55.1. You can make the Bank transfers in Euro from a to business transfers. Multicurrency Sub-Account in Euros to countries You can sign up to the SDD. other than SEPA countries. You have the right to instruct the Bank not to per-

15 mit or enable SDD and/or SDD B2B transfers to may not exceed the maximum amount of Euro be made from your Account. In addition, in rela- 100,000 or a different amount from time to time tion to the SDD, you can instruct the Bank not to as specified in the SCT Instance Scheme Rule- permit transfers: (a) initiated by certain payees, book. However, the Bank may specify different (b) for amounts over a certain threshold; or (c) maximum amount limits, even less than 100,000 from payees from certain countries. Euro, by giving notice to you in the reserved area Where you are a business (not a customer or a of the Bank’s website. You can specify lower lim- micro-enterprise), you will be able to sign up to its than those envisaged by the Bank. the SDD B2B. You shall provide the Bank with You cannot indicate an execution date, nor the details of all Mandates, and each amendment or currency, which is always Euro. revocation of such Mandates. Further information You cannot revoke an Instant Bank Transfer or- is available on request. der once it has been received by the Bank. You can revoke any transfers at the end of the The Bank will immediately give you confirmation business day preceding the day agreed for the of the payment/transfer. debiting of funds from your Account. The Bank may refuse to execute your transfer/ The time of receipt of a transfer transmitted to Payment Order due to the a failure by the pay- the Bank is the expiry date indicated in the order. ee’s service provider to execute the SEPA Instant The order is executed on the expiry date where transfers Credit Transfer (SCT Inst) and/or if the it is a Working Day or the next Working Day if the amount of the Bank Transfer exceeds the amount expiry date is not a Working Day. limit as notified to you from time to time. The transfer request will be executed on the date Your Account will be debited in Euro on the date indicated in the order and Your Account will be of the execution of the transfer. debited on that day. The Instant Bank Transfer is performed instant- You may request a refund of the debited amount ly, with accreditation to the payee in a maximum within eight weeks from the date on which the time of 25 seconds. funds were debited. You cannot request a re- The Bank shall credit Instant Bank Transfers in fund of the debited amount when you have given your favor exclusively on the basis of the Unique a specific Mandate for such debiting. You can re- Identifier (IBAN). The Bank will credit your Ac- quest a refund through our website at www.fine- count as soon as the funds are credited to the cobank.com or by contacting our customer care Bank itself. team on 0800 640 6667. You will be required to The Bank may refuse to credit funds if the provide certain information to the Bank including amount of the transfer exceeds the limit applica- the amount of the refund, the expiry date and the mandate number. ble and notified to you from time to time. The Bank shall reimburse the entire amount of the amount debited or provide a properly justi- SECTION 2D Specific Terms for Debit Card Services fied refusal within ten Working Days from the receipt of your request. 61. Card 61.1. Each Debit Card issued by the Bank allows you Part G. Specific Terms for Instant Bank Transfer to access your Account subject to these Specific Terms. You may request a Debit Card denominat- 60. Instant Bank Transfer in Euros ed in Sterling or in Euro (or both). 60.1. Instant Bank Transfer service is always available. 61.2. Unless otherwise specified in the relevant Fact You can activate the Instant Bank Transfer ser- Sheet, if you use a Sterling Debit Card to make a vice by accessing the Bank’s website or through the Bank’s app. payment or cash withdrawal, the relevant amount You can make an Instant Bank Transfer through will be deducted from your Current Sub-Account. the reserved area of the Bank’s website, through Where you use a Euro Debit Card to make a pay- the Bank’s app, as well as through any other ment or cash withdrawal, the relevant amount channels made available to you by the Bank from will be deducted from your Euro Multicurrency time to time. Sub-Account. All other applicable fees and costs You may deactivate the Instant Bank Transfer ser- relating to your Debit Card will be deducted from vice at any time. your Current Sub-Account. If the Bank provides For the execution of the transfer, You must pro- you with a Fineco Visa Debit Card you will be vide the following information to the Bank: able to withdraw cash at VISA ATMs featuring the - name; VISA logo and make payments to both physical - name of the payee; and on-line merchants which accept VISA pay- - amount of the order; ments. The Bank will not charge any fee for any - IBAN code (International Bank Account Num- withdrawals in currency of your Debit Card for ber) of the payee, which is considered as the transactions in the relevant countries. However, Unique Identifier. a number of ATM providers may charge a trans- In addition, You can provide the following infor- action fee. Subject to availability in the retailer mation: concerned, you will also be able to use your - the reason for the payment; Debit Card to make contactless payments up to - any optional information as foreseen on the the limit applicable in the country where the Deb- Bank’s website or on the Bank’s app. it Card is being used. In accordance with the “Maximum Amount for 61.3. You can register your Debit Card for an e-wallet. Instructions under the SCT Instant Scheme Rule- 61.4. The Bank is also not liable if any retailer refuses book - EPC023-16”, Instant Bank Transfer orders to accept your Debit Card.

16 62. Terms of Use 63. Card Issue 62.1. You will be deemed to have authorised a pay- 63.1. The Bank may refuse your application for a Debit ment from your Account using your Debit Card: Card. (a) at a retailer’s premises, by entering your Card 63.2. The Bank will issue you (or in the case of a Joint PIN into the card keypad, or providing a signa- Account, each Accountholder, unless otherwise ture that matches the signature on the Debit agreed with you) a Debit Card and Card PIN Card or, if it is a contactless payment, by tap- linked to your Account. The Debit Card and Card ping the card against the retailer’s terminal. PIN can only be used by the person to whom it You must provide evidence of your identity if has been issued; it may not be used by any other asked to do so; person. You must not disclose your Card PIN to (b) online or over the phone, by providing some any other person including a Bank employee. of your personal and Debit Card details along 63.3. The Bank will send the Fineco Visa Debit Card by with the 3-digit security number on the back post and Card PIN to you by SMS/text. of the Debit Card. The Bank can also send 63.4. When you receive your Debit Card you must sign you a one-time password for you to confirm it and activate it using the instructions provided that you authorise the payment where Veri- by the Bank. If the Debit Card is not activated, fied by Visa procedure apply; or you will still remain responsible for each obliga- (c) at an ATM, by entering your Card PIN. tion toward the Bank. The Bank has the right to 62.2. Once you have authorised a payment from your contact you by phone call, in order to verify the Account using your Debit Card in accordance Debit Card correct receipt. with Clause 62.1, you cannot cancel that pay- 63.5. A Debit Card is typically valid for 36 months. Pri- ment. or to the Debit Card’s expiry date, the Bank will 62.3. The Bank may impose spending limits on the issue you a replacement Debit Card by sending amount that you can spend on your Debit Card, it to you by post to the address set out in Clause irrespective of the cleared funds in your Account. 12.1 of the General Terms. The replacement Debit The Bank will confirm these limits when it sends Card may: you your Debit Card. ATM cash withdrawal limits (a) operate on a different, but equally wide- are also to apply. spread, network (e.g., Mastercard instead of 62.4. The Bank will carry out a payment made using VISA); your Debit Card provided you have authorised (b) be valid for more or less than 36 months; or it in accordance with Clause 62.1, you have suf- (c) feature new and improved technology. ficient cleared funds in your Account and you 63.6 Notwithstanding any other provision herein con- would not exceed any spending limits imposed tained, after the Debit Card is issued, reissued or by the Bank. renewed, and before it is physically delivered to 62.5. The Bank may refuse to carry out a payment, and the address set out in Clause 12.1, you can activate will not be liable for any losses to you, if: the e-wallet services on the Debit Card, through (a) you do not have sufficient funds in your Ac- the Bank’s website or through the Bank’s app, us- count; ing the instructions provided by the Bank, which (b) you would exceed any spending limits set by would immediately allow you to use the Debit the Bank; or Card for online purchases and payments through (c) the Bank considers there is a fraud risk. the mobile payments services enabled from time If the Bank refuses to carry out a payment it to time by the Bank (e.g. Apple Pay, Google Pay, will, subject to applicable law, notify you of: Garmin Pay, Fitbit Pay). Once the Debit Card is (i) the refusal; activated, you will see the Debit Card data (PAN, (ii) the reasons for the refusal; and CVV2, expiry date), on the Bank’s website and (iii) if applicable, the procedure for remedying Bank’s app, that are necessary to enable e-wallet any issues that led to the refusal. services. Upon receipt of the physical Debit Card 62.6. For security reasons and fraud prevention, the at the address set out in Clause 12.1, you can also Bank may impose spending limits on the use of activate all other withdrawal and payment servic- your Debit Card for payments taking place over- es (e.g. payments by inserting the Debit Card in seas or via a website registered overseas. The the POS). Bank may change the relevant spending limits at any time and will notify you of such changes. 64. Keeping your Debit Card, Card PIN and Ac- 62.7. To increase safety of internet payment, your count details safe Debit Card will be automatically registered for 64.1. You must keep your Debit Card safe and must Verified by Visa. You may be asked to provide keep your PIN and any other security code as- additional information relating to your Debit Card sociated with the Debit Card and access to your when making payments with your Debit Card Account secret. You must not disclose it to an- online. yone else including Bank employees. You must 62.8. The Bank may authorise third parties to perform take care to ensure that third parties do not use its obligations in respect of the Debit Card. The the Debit Card. Bank has no liability for the actions of third par- 64.2. If the Debit Card becomes damaged or worn out ties which it has not authorised. The Bank will you must stop using it and return it to the Bank. not be liable for any adverse consequences as a You must destroy the Debit Card by cutting it into result of such unauthorised third parties’ actions at least six pieces before returning it to the Bank. (such as the suspension or delay of payments 64.3. The Bank will replace a Debit Card that is dam- made using the Debit Card that are not as a re- aged or no longer works. You may be charged a sult of any action/inaction by the Bank). fee for the card replacement.

17 65. Card/Pin/Security code loss/theft 68.2. Subject to Clause 68.3, if you fail to promptly no- 65.1. You must immediately notify the Bank if your tify the Bank of the loss, theft, misuse or suspect- Debit Card or any Security Details are lost, sto- ed misuse of your Debit Card or Security Details len, or you think someone knows them or has in accordance with Clause 65 you will only be tried to use them by calling: liable for losses up to £35. 0800 640 66 67 (support & H24 from UK) 68.3. If you have acted fraudulently or with gross negli- +44 20 706 57 557 (from abroad) gence in failing to promptly notify the Bank of the 65.2. At the same time as notifying the Bank in ac- loss, theft, misuse or suspected misuse of your cordance with Clause 65.1, or within 48 hours of Debit Card or Security Details in accordance with such notification, you must submit a request to Clause 65, you will be liable for all losses asso- the Bank for a replacement Debit Card. The Bank ciated with such loss, theft, misuse or suspected will charge you the cost of replacing the Debit misuse. Card, if provided, as indicated in the Fact Sheet. 65.3. The Bank will block your Debit Card and Account 69. Card Block access as soon as it receives notification in ac- 69.1. The Bank may block your Debit Card or suspend cordance with Clause 65.1. its use where: (a) there are issues with your Debit Card security; 66. Bank’s Liability for improper or failed execution (b) it suspects that your Debit Card has been 66.1. If the Bank failed to carry out your payment or car- subject to unauthorised or fraudulent use; ried it out incorrectly, the Bank is liable, unless it (c) there is a high risk of you not complying with can show that the payee’s bank failed to carry out your payment obligations to the Bank. the payment or carried it out incorrectly or the fail- 69.2. Subject to applicable law, the Bank will notify you ure occurred due to abnormal and unforeseeable by post, telephone or text message of any block circumstances outside the Bank’s control. or suspension before or immediately after your 66.2. If the Bank failed to carry out your payment, or car- Debit Card has been blocked or suspended. ried it out incorrectly, you must notify the Bank in 69.3. Once the issue which causes the Debit Card to accordance with Clause 11 in the General Terms. be blocked or suspended has been resolved, The Bank will immediately refund your Account the Bank will remove the block or suspension. with the amount of the non-executed or incorrect- If this is not possible the Bank will send you a ly executed payment and any charges or interest replacement Card by post to the address set out that you have paid as a result of that payment. in Clause 12.1 of the General Terms. 66.3. In the case of improper execution, the payer 69.4. The Bank may report any use of an expired, may choose not to claim a refund, by informing blocked, lost, stolen, Debit Card or Security De- the Bank of his choice in writing, and may opt to tails or any other misuse of your Debit Card or keep or rectify the payment. Security Details to the Police.

67. Notice of Unauthorised Payments or incorrect 70. Maximum execution time payments 70.1. If you use your Debit Card to withdraw cash from 67.1. If you notice an unauthorized payment or in- an ATM or to pay a retailer, the amount of the correct payment from your Account you must withdrawal or payment will be authorised by promptly, and in any event within 13 months of the Bank immediately and debited from your the payment in question, give the Bank written Account straight away subject to any technical notice. issues with your Account, ATM operation or oth- 67.2. Upon receiving such notice, the Bank will imme- er matters outside control of the Bank. The ATM diately (ie by the end of the next Working Day fol- may withhold the Debit Card if the Bank suspects lowing your notification to the Bank) refund your misuse or for other security reasons. If this hap- Account with the amount of the unauthorised pens you must notify the Bank using the contact payment and restore your Account to the posi- details set out in Clause 11.2. tion it would have been in had the unauthorised payment not occurred. 71. Fees 67.3. If the Bank suspects fraud or believes that you 71.1. Any charges incurred by you in carrying out the did in fact authorise the payment, the Bank has payments in Clause 61.2 will be in the local cur- the right to not refund your Account until its in- rency of the country in which the payment was vestigations are complete. Subject to applicable made. If you use your Debit Card to make a pay- law, the Bank will notify you of this in accordance ment from your Account which requires a cur- with Clause 12 of the General Terms. rency conversion, the Bank will convert that pay- 67.4. If the Bank makes the refund in accordance with ment into the currency of the Debit Card using Clause 67.2 but subsequently receives evidence the Visa Payment Scheme Exchange Rate before that the payment had been authorised by you, it debiting the amount of the Payment Order from may demand you repay the Bank the refunded your Account. You will be subject to additional amount. fees for currency conversions. These are set out in the Fact Sheet and are available on www.fine- 68. Cardholder liability for unauthorised use cobank.com. 68.1. Unless you have acted fraudulently, you will not be liable for any losses connected with payment 72. How to end the Debit Card Services using your Debit Card or Security Details after 72.1. You and the Bank can terminate the Debit Card you have notified the Bank of their loss, theft, Service in accordance with Clause 18 of the Gen- misuse or suspected misuse in accordance with eral Terms. Subject to Clause 18.4, the Bank is Clause 65. required to give you 2 months’ prior notice if it

18 intends to terminate the Payment Service. 73.6. Where the Bank has any rights pursuant to 72.2. You are liable for any loss or damages caused Clause 73.2 against the issuer of securities (or, by your continued use of the Debit Card after the where holding through a sub-custodian, the rele- Card Service has been suspended or terminated. vant sub-custodian) in respect of securities held in your Account, the Bank will hold such rights for your benefit. SECTION 2E Specific Terms for Custody 73.7. You understand and accept that the Bank, and any sub-custodian, may pool your Assets with 73. Custody Services those of other clients and a sub-custodian may 73.1. The Bank will hold Assets for you in a Custody also pool your Assets with those of its own. Account. By merely holding investments or As- Where the Bank (or a sub-custodian) does this, sets for you, the Bank is not assuming any duty your individual client entitlements may not be to advise you as to the merits of buying, selling, separately identifiable by separate certificates, hedging or insuring them. other physical documents of title or equivalent 73.2. You authorise the Bank to: electronic record, and, therefore, in the event (a) open and operate such Accounts as may be of an irreconcilable shortfall after the Bank’s in- necessary for the Bank to provide you with solvency or the insolvency of a sub-custodian, custody services; clients whose investments have been pooled (b) safe-keep your investments either in the may share in that shortfall in proportion to their Bank’s own or its sub-custodian’s custody in original share of the assets in the pool. Any en- Italy or, in any other country, subject to the titlements or other benefits arising in respect of laws, regulations and customs of the place pooled Assets will be allocated pro rata to each where they are kept; client whose Assets are so pooled. (c) use any person selected by the Bank as a 73.8. In the event of the insolvency or any other anal- sub-custodian, including affiliates of the Bank ogous proceedings of a third party holding your and third parties; Assets, the Bank may only have an unsecured (d) where the Bank holds registrable Assets for claim against the third party on your behalf, and you, register or record such Assets in your you will be exposed to the risk that the securities, name or in the name of an eligible nominee; cash or any other property received by the Bank and from the third party is insufficient to satisfy your (e) where the Bank holds registrable Assets for claim and the claims of all other relevant clients. you which are subject to law or market prac- 73.9. Where your Assets are held outside Italy, dif- tice which prevents the Bank from register- ferent settlement, legal and regulatory require- ing or recording legal title in the way set out ments, and different practices relating to the in Clause 73.2(d) above, register or record segregation and separate identification of those such Assets in the name of a third party or, investments, may apply and your rights in the if we are prevented from doing so, in the event of a default or insolvency may be different Bank’s name. (and may be reduced). 73.3. You are hereby notified that in the event that 73.10. Any sub-custodian referred to in this Clause 73 Assets are registered or recorded in the Bank’s may have a security interest or lien over, or right name (in accordance with Clause 73.2(e) we will of set off in relation to, the Assets held in your keep records to separately identify your Assets Custody Account, to the extent the Bank is per- from the Bank’s own Assets and the Bank will mitted to grant such rights. The Bank will inform make arrangements so as to safeguard your own- you if any sub-custodian has an above-described ership rights to your Assets. However, such Assets lien or right over your Assets. may not be segregated from the Bank’s own As- 73.11. You can ask the Bank at any time for a statement sets so that in the event of the Bank’s insolvency, of the Assets the Bank holds for you. We may your Assets may not be as well protected from make a charge for the provision of the statement claims made on behalf of the Bank’s general cred- in accordance with these Terms of Business. itors (in comparison to if such Assets had been segregated from the Bank’s own Assets). 74. Authorisation 73.4. Notwithstanding any other provision of these 74.1. You authorise the Bank, but the Bank is not Terms of Business, the Bank shall be respon- obliged, to: sible for the acts or omissions of any nominee (a) sign on your behalf and deliver any required controlled by the Bank, or by the Group, to the endorsements or assignments and guaran- same extent that the Bank is liable for its own tees, their signature to transfer Assets, exe- acts and omissions. Any limitations in relation the cute all declarations and affidavits and certify Bank’s liability under this Agreement (including, ownership of your Assets; but not limited to, the limitations set out in Clause (b) exercise, purchase or sell subscription rights 16) shall apply equally to any nominee controlled to Assets and exchange and collect re- by the Bank or the Group. deemed Assets; 73.5. The Bank will not be held liable for any act or de- (c) exercise (or leave unexercised) voting, fault or negligence by any sub-custodian or any conversion, subscription or other rights (in- nominee which is not controlled by the Bank or cluding rights in respect of capital reorgan- the Group, unless the Bank has failed to exercise isations, rights issues and takeovers and due skill, care and diligence in the selection, ap- other offers) and other offers on any Assets pointment and periodic review of such persons, and make payment on your behalf for these or unless the Bank is otherwise in breach of its rights without asking you. Generally, howev- obligations otherwise imposed on the Bank. er, the Bank shall have no obligation to, and

19 will not, exercise voting rights on any of your and what trading venues it will use. A copy Assets; of the Bank’s Order Execution Policy is avail- (d) collect interest and dividends and other enable on the Bank’s website and a copy is titlements (or shares or other benefits in lieu included with these Terms of Business. The of dividend) from your Assets held in your Bank may act as a counterparty to a transac- Account; tion with you for the purposes of executing (e) collect entitlements to shares and any oth- your order where the Bank is acting as a Sys- er benefits arising from corporate events. tematic Internaliser. Where your Assets have been pooled, such (b) Reception and Transmission of Orders: this entitlements shall be distributed pro rata, Service involves the Bank receiving orders according to the Bank’s records of client in- in Financial Instruments from you and trans- vestments; mitting them to an intermediary of the Bank (f) sell subscription rights and collect redeemed which is authorised to execute client orders. securities; Orders will only be transmitted to an interme- (g) put up margin security or collateral for bor- diary when the Bank has no direct access to rowing or derivative transactions for you with a certain Trading Venue. The intermediaries a counterparty, exchange, clearing house or used by the Bank are listed in the Order Ex- intermediate broker of the Bank’s choosing ecution Policy. where market practice requires the Bank to (c) The two Services described above, Execu- do so; tion of Orders and Reception and Transmis- (h) lend your Assets to or through a counterpar- sion of Orders, will be collectively referred to ty or intermediate broker of its choosing on as “execution” in these Specific Terms. terms which are usual in the relevant market (d) When distributing certain financial products, (unless you instruct the Bank otherwise); and/ the Bank needs to comply with conditions or and instructions provided by issuers of such (i) pass entries over your Account for amounts products. received or paid out from any of the above (e) The Bank may provide assistance with transactions, unless you instruct the Bank on-going running in relation to certain finan- otherwise, which the Bank may do by itself, cial products. by its agents or by its or their nominees. 76.4. When providing Investment Services, by signing this Agreement you expressly authorise the Bank 75. Obligations to act on your behalf as your agent. 75.1. Unless otherwise agreed with you, or where the Bank is required by law, the Bank shall have no 77. Appropriateness obligation to forward to you any information re- 77.1. Before providing you with Investment Servic- garding corporate actions (whether relating to es, the Bank will ask for information about your distributions, voting rights, rights arising under a knowledge and experience relevant to specific reorganisation, rights issue or takeover, or other Financial Instruments to enable it to carry out an corporate events) or any other information re- appropriateness assessment. If you have a Joint ceived by the Bank in relation to the Assets held Account the Bank will carry out an appropriate- by the Bank or any nominee company by you. ness assessment on all of the Accountholders. 75.2. In the event that any sub-custodian reverses a pay- An appropriateness assessment is designed to ment or allocation of interest or dividends or other ensure that you are able to understand the terms entitlement, the Bank shall be entitled to reverse and risks involved in investing in a particular Fi- such payment or allocation to the same extent. nancial Instrument. 77.2. If you give the Bank an instruction to carry out a transaction which the Bank does not consider to SECTION 2F Specific Terms regarding Investment be appropriate for you it will inform you of this. Services The Bank may require you to provide confirmation that you have been provided with this warn- 76. General Provisions ing before carrying out your instruction. 76.1. The Bank will, acting on your instructions, receive, transmit and execute orders in Financial 78. Execution only Instruments (the “Investment Services”). The 78.1. Exclusively for the financial instruments set out Bank will also place Financial Instruments without below, you may request the Bank to execute a firm commitment basis. these Services in “execution-only” mode: 76.2. The bank does not provide advice in relation to (a) shares admitted to trading on a Regulated Financial Instruments. The Bank is not able to Market or on an equivalent third country advise you on any transaction and the Bank will market or on a MTF (excluding shares in non- not provide you with any advice or personal rec- UCITS collective investment undertakings ommendations. and shares that embed a derivative); 76.3. Specifically, the Investment Services will include: (b) bonds or other form of securitised debt ad- (a) Execution of Orders on Behalf of clients: this mitted to trading on a Regulated Market or Service involves the Bank executing orders on an equivalent third country market or on relating to Financial Instruments in accord- a MTF (excluding those that embed a deriv- ance with your instructions where the Bank ative or incorporate a structure which makes has direct access to the relevant Trading it difficult for the client to understand the risk Venue. The Bank’s Order Execution Policy involved); sets out how the Bank will execute orders (c) money market instruments (excluding those

20 that embed a derivative or incorporate a concerning conflicts of interest and has a con- structure which makes it difficult for the client flicts of interest policy in place, a copy of which to understand the risk involved); is provided to you with these Terms of Business. (d) shares or units in UCITs (excluding structured 80.2. The Bank applies efficient, organizational and UCITS); administrative measures in order to adopt all (e) structured deposits (excluding those that in- reasonable steps to avoid conflicts of interest corporate a structure which makes it difficult negatively affect your interests. for the client to understand the risk of return 80.3. If, in providing you with Investment Services or the cost of exiting the product before or carrying out a transaction in relation to your term); Account, there is a risk of a conflict of interest (f) and other non-complex financial instruments between you and the Bank (including the Bank’s which the Bank reserves the right to specify managers, employees or persons directly or on its website. indirectly related to the Bank) or between you 78.2. If you made the election set out in Clause 78.1 and another client, the Bank will clearly warn above, you are deemed to have immediately ac- you, before providing the Service or carrying out knowledged that: the transaction, about the general nature and/ (a) the Bank, for these specific financial instru- or sources of such conflicts of interest and the ments, does not have to: measures taken to mitigate such risks. It is also i. ask you for information concerning your right to request further clarification regard- knowledge and experience of the in- ing the Bank’s conflict of interest policy. vestment sector relevant to the financial instrument; 81. Terms regulating inappropriate operations and ii. evaluate the appropriateness of the conflicts of interest. your chosen instrument as referred to in 81.1. If a transaction is not considered appropriate Clause 77; for you in accordance with Clause 77 or would (b) the “execution only” service does not include give rise to conflict of interest in accordance with the protection offered by the appropriate- Clause 80, the notifications referred to in Clauses ness evaluation carried out by the Bank in 77.2 and 80.3, respectively, will be given to you accordance with Clause 77. by the Bank and the Bank will ask you for confir- 78.3. The Bank shall carry out the collection and trans- mation by email or Internet Banking in accord- mission service in “Execution Only mode” only ance with Clause 12 of the General Terms before referring to orders transferred electronically. executing the transaction. 81.2. If you give an order for a transaction that is not 79. Client Categorisation considered appropriate for you or would give 79.1. The Bank is required to ensure clients are ap- rise to conflict of interest, the notifications -re propriately categorised prior to doing business ferred to in Clauses 77.2 and 80.3 will be given to with them in order to ensure that regulatory pro- you by the Bank. tections are focused on those classes of client which most require it. The three categories of 82. Joint Accounts client are Retail Clients, professional clients and 82.1. When one Accountholder of a Joint Account eligible counterparties. places an order for a Financial Instrument, the 79.2. For the purposes of these Terms of Business, the Bank will conduct appropriateness checks on Bank will treat you as a Retail Client. As a Retail the Accountholder who is placing the order. Client, you are entitled to the highest level of protection, including the obligation of the Bank to 83. Risks of Investing provide you with Best Execution, as set out in the 83.1. You will be responsible for bearing the costs and Order Execution Policy included with this docu- risks of any transactions in Financial Instruments ment. The Bank only deals with Retail Clients. If executed by the Bank for you. you do not wish to be treated as a Retail Client, 83.2. The value of your investments and the income the Bank will be unable to provide you with these from them can go down as well as up and you Services unless it is able to categorise you as a may not get back the amount you originally Professional Client . invested. The market value of Financial Instru- 79.3. The Bank is obliged to provide you in a clear ments that are derivatives is subject to significant form with all information necessary to correctly variations and investing in such instruments in- understand the nature and the risks of the In- volves a high risk of loss, which may exceed the vestment Services and specific types of financial amount of your original investment. You agree instruments which is necessary for you to make and confirm that you have been fully informed an appropriate investment decision. and are aware of the inherent risks. 79.4. Best Execution is a key component of investor 78.3. If you ask the Bank to execute an order in Finan- protection and the “best execution” principle cial Instruments outside a Trading Venue, you means that the Bank must take all reasonable confirm that you are aware that: steps to obtain the best possible result for you as (a) those Financial Instruments may not be able its client, taking into account price, costs, speed to be sold or bought immediately on your in- of execution, likelihood of execution and settle- struction due to prevailing market conditions; ment, size, nature or any other consideration rel- and/or evant to the execution of the order. (b) it may be difficult to obtain reliable information about their value. 80. Conflicts of Interest 83.4. If you hold in your Custody Account leveraged 80.1. The Bank complies with laws and regulations financial instruments or contingent liability trans-

21 actions, the Bank will inform you where the initial lute discretion. You are obliged to maintain in your value of each instrument depreciates by 10% or Custody Account, at all times, sufficient funds to more, and thereafter at multiples of 10%. Report- meet all margin requirements. In addition, the ing under this paragraph shall take place no later Bank will be entitled to treat any Assets deposit- than the end of the Working Day in which the ed with the Bank by you from time to time (other threshold is exceeded or, in a case where the than assets deposited for safe custody only) as threshold is exceeded on a non-Working Day, Collateral against your margin requirements. In the close of the next Working Day. all cases, the Bank will be entitled in its sole and absolute discretion to determine the value of any 84. Commissions and Fees Collateral deposited with the Bank. The Bank 84.1. The Bank will charge you the fee and/or nego- is entitled to require you to pay your margin re- tiated commissions set out in the Fee Schedule quirement by any method of immediate/electronic for Investment Services. funds transfer acceptable to the Bank. 84.2. Any additional expenses incurred by the Bank or 86.4. In the event that there is insufficient margin in its intermediary in providing you with Investment your Custody Account or in the event that the Services will be charged to your account. deposited margin is not sufficient to meet the 84.3. Additional information regarding fees or taxes is required margin, as determined by the Bank in available on the Bank’s website. accordance with Clauses 86.1 and 86.2 of these 84.4. The Bank will provide you with information re- Terms of Business, the Bank will call upon and lating to the fees and costs of each Investment request that you deposit additional margin or Service and each Financial Instrument along with Collateral to secure your obligations to the Bank. an annual statement setting out fees and com- 86.5. If you do not respond to any margin call from the missions that you have been charged. Bank, the Bank may in its sole discretion close or liquidate your investments without notice to 85. Investment Services in a non-Base Account you immediately and decline to enter into any Currency further transactions with you or accept any fur- 85.1. If you ask the Bank to execute an order for a Fi- ther instructions from you if you fail to honour any nancial Instrument in a currency which is not a margin call. The Bank shall not be liable for any Base Account Currency, the Bank will convert the losses you may suffer as a result of any failure to amount of the order into the relevant currency respond to a margin call. using the exchange rate set by the Bank at the 86.6. Security interest. As a continuing security for the time of order execution. performance of all your obligations (whether ac- 85.2. Commissions for currency conversion will be tual or contingent, present or future) to the Bank charged to you by the Bank when you trade in pursuant to or in connection with these Terms of Financial Instruments set in a currency which is Business in relation to your Custody Account you not a Base Account Currency. grant to the Bank, with full title guarantee, a first priority fixed charge over, and security interest in, 86. Margin all margin and other Collateral now or in the future 86.1. As a condition of placing an order with the Bank, provided by you to the Bank or to its order or un- the Bank may in its sole discretion require the de- der its direction or control or that of a trading ven- posit of funds or Collateral acceptable to the Bank ue standing to the credit of your Custody Account. to cover your liability to the Bank for any losses 86.7. Negative pledge. You undertake neither to cre- which may be incurred in respect of your trans- ate nor to have outstanding any security interest action (“Initial Margin”). Initial Margin is due and whatsoever over, nor to agree to assign or transfer, payable immediately as a condition to executing any of the margin transferred to the Bank, except a the relevant transaction and the Bank may decline lien routinely imposed on all securities in a clearing to execute any transaction if you do not have suf- system in which such securities may be held. ficient available cash or Collateral in your Custody 86.8. Power to charge. You agree that the Bank may, Account to satisfy the Initial Margin required for free of any adverse interest of yours or any other that transaction at the time the relevant order is person, grant a security interest over margin pro- placed. If there is an adverse movement in the vided by you to cover any of the Bank’s obliga- price of your investment or if the Bank determines tions to an affiliate or third party broker or trading in its sole and absolute discretion that there is an venue, including obligations owed by virtue of increase in the risk of an adverse movement in the the positions held by the Bank or another of its price of an investment, the Bank will require addi- customers. tional security from you in the form of cash depos- 86.9. General lien. In addition and without prejudice its or other acceptable Collateral to supplement to any rights to which the Bank may be entitled the Initial Margin (“Variation Margin”). under these Terms of Business or any applica- 86.2. Margin requirements may be set and varied with- ble law, the Bank shall have a general lien on all out prior notice from time to time in the Bank’s property held by the Bank or those appointed by sole and absolute discretion in order to cover the Bank on your behalf until the satisfaction of any realised or unrealised losses arising from or your obligations (actual or contingent, present or in connection with transactions in your Custody future) to the Bank under these Terms of Busi- Account, including subsequent variation of any ness in relation to your Custody Account. margin rates set at the time the transaction is 86.10. Further assurance. You agree to execute all fur- executed. ther documents and to take such further steps as 86.3. Margin must be provided by or on behalf of you the Bank may request from time to time to create, in cash or other Collateral acceptable to the Bank perfect, maintain or protect the Bank’s charge and as determined by the Bank in its sole and abso- security interest referred to in Clause 86.6, to be

22 registered as owner of or obtain legal title to all 88.4. The details of your trading account activity will Collateral, to secure further your obligations (ac- be available using Internet Banking and updated tual or contingent, present or future) to the Bank, by the next Working Day after an order had been or to enable the Bank to exercise its rights or sat- executed. You may print this information. isfy any requirement in relation to your Custody Account. 89. Order Execution 86.11. Substitution. You may not withdraw or substi- Order placement and cancellation tute any property or asset subject to the Bank’s 89.1. You may only place (or cancel) orders for Finan- charge and security interest referred to in Clause cial Instruments by Internet Banking or Tele- 86.6 without the Bank’s prior written consent. phone Banking. By entering into this Agreement, you are informed and agree that the Bank may 87. Inducements record any relevant phone call. You also ac- 87.1. Subject to applicable law and regulation, the knowledge that these phone record, if any, are Bank may pay any Inducement to or accept any kept by the Bank and remains available for 5 Inducement from a third party other than you, or (five) years from the recording date, and in that a person acting on your behalf, if the payments period you may request a copy from the Bank. or benefits: 89.2. You will need to enter your User ID, Password (a) are intended to increase the quality of the and PIN in order to submit (or cancel) orders service provided to you; and electronically. Orders may be submitted (or can- (b) do not impact compliance of the Bank with its celled) via Internet Banking or other channel cho- obligations to act honestly, equally and pro- sen by the Bank. fessionally in your best interests; 89.3. Orders submitted (or cancelled) electronically The existence, nature and amount of any pay- are given a unique ID number by the Bank and ments or benefits will be clearly disclosed to you an order (or cancellation) is considered to be in a manner that is comprehensive, accurate and received by the Bank when the ID number has understandable, before the provision of Invest- been entered by the Bank into the order monitor. ment Services. You can confirm your order (or cancellation) has 87.2. The Bank will notify you of any Inducements re- been received by the Bank by accessing the or- ceived in accordance with Clause 87.1 when you der monitor on the Bank’s website. place an order and before that order is executed 89.4. When the Bank receives your order (or cancella- by the Bank and will provide you with any addition) and it has been entered into the order mon- tional details at your request. itor, the Bank will issue an order (or cancellation) 87.3. Some Inducements paid or accepted by the confirmation which includes your name, the date Bank may be calculated as a percentage of: and time the order was received, the details and (a) the commissions charged to clients, as set instructions for the order. You can access this by the company issuing or offering an invest- using Internet Banking and may print a copy for ment product (which would be explained in your records. the contracts or other documents provided 89.5. The Bank will retain for 5 years electronic re- to you by the issuing company); or cords of the orders (and cancellations) submitted (b) the offering price of the investment product electronically. The Bank may use these electron- (which would be communicated to you by the ic records as evidence in court of the Bank’s re- issuing company). ceipt of your order (or cancellation). 89.6. The Bank is not liable for any orders (or cancella- 88. Trade Confirmations and Trading Activity Sum- tions) which are not executed due to any action maries you take which is not in compliance with these 88.1. The Bank will provide you with a trade confir- Terms of Business. mation by the next Working Day following your 89.7. An order cannot be cancelled once it has been order’s execution. The trade confirmation will be executed by the Bank. made available on Internet Banking and you may 89.8. You agree to provide the Bank with any identifi- print it. cation code or identifying information that it may 88.2. The trade confirmation will include the following require. information (where appropriate): For customers which are not natural persons and (a) the Bank’s name; for individuals acting on a business capacity, the (b) your name and ID details, Bank requires the customer’s LEI code (Legal Enti- (c) order type (e.g., Limit Order or Market Order); ty Identifier). For individuals the Bank requires the (d) sign of trade (buy or sell); custumer’s NIC (National Identification Code). (e) date and time of execution; 89.9. The Bank may also require NIC and LEI code (f) Execution Venue; information in relation to each person you del- (g) Financial Instrument identification details; egate as being entitled to operate on your Ac- (h) quantity and unit price of the Financial Instru- count including your legal representative. The ment; Bank may also require you to provide this code (i) total execution price; and/or the personal data necessary for the deter- (j) total commissions and fees; and mination of the NIC code, and to promptly report (k) identity of the counterparty. any changes. 88.3. Where an order is executed in a currency differ- 89.10. You are aware and accept that the Bank will not ent than the Base Account Currency, the trade be able to proceed with any order, subject to the confirmation will be sent to you on the first Work- reporting obligations, in the absence of the afore- ing Day after the date of the currency conver- mentioned identification codes or if the codes or sion, as discussed in Clause 85 above. associated information are invalid.

23 Best Execution and the Bank’s Execution Policy transaction, the Bank will tell you the price at 89.11. The Bank has put processes in place to ensure which it is willing to execute your order and the quick, correct and efficient execution of client or- Bank will execute your order once it has received ders and the Bank will act in your best interest your consent in accordance with Clause 11. when carrying out your orders, in consideration 89.21. The Bank may combine your orders with its own of your instructions (“Best Execution”). orders or orders of other clients. Combining your 89.12. The Bank’s policies and procedures concerning orders with those of other clients may result in order execution, including Best Execution, are you obtaining on some occasions a more favour- set out in the Bank’s “Order Execution Policy” able price and on others a less favourable price which is included in Annex I to these Terms of than if your orders had been executed separate- Business. Your orders will be executed in line ly. The Bank will only combine your orders in this with the Order Execution Policy and as such your way when it reasonably believes that, in doing orders may be executed outside of a trading so, it is unlikely to act against your best interest. venue. 89.22. If the Bank can only execute part of your order, the 89.13. The Bank will notify you of any material changes Bank will use reasonable endeavours to achieve to its Order Execution Policy. the best possible result and execute the order to 89.14. Where your orders are executed on a trading the fullest extent possible. Where the Bank has venue, your orders will be executed in accord- combined your orders with its own orders, and the ance with the rules and regulations of the rel- Bank is only able to fill partially the orders, your or- evant Trading Venue and all such steps may der will be filled before the Bank’s order. However, be taken as may be required or permitted by if the Bank determines that you would have been those rules and regulations. Your orders may in a worse position if the orders had not been be subject to pre- and post-trade monitoring as combined, the orders executed will be allocated required by law in order to prevent excessive proportionally between you and the Bank. volume in the order book, to prevent a trading system’s capacity from being breached or to constrain or halt trading to maintain an orderly SECTION 2G Specific Terms regarding the Inter- market (to the extent such interruptions are war- est-bearing portfolio service ranted and permitted by the rules of the trading venue). Your order may be automatically blocked 90. Client’s authorisation or cancelled by the Trading Venue as necessary You hereby expressly authorise the Bank to conclude in- or required by the trading venue. dividual agreements to lend transferable securities held 89.15. The Bank will endeavour to carry out any specific in your Custody Account (referred to henceforth as the instruction you give as to how to execute an or- “Stock”) to the Bank as counterparty, each such transac- der. Please note that by acting on your specific tion to start on the start date specified in the Loan Confir- instruction, the Bank may be prevented from ex- mation, and as described more fully in Clauses 91 to 98. ecuting your order in accordance with Best Exe- cution. In respect of those parts of the execution Ways of performing the Interest-bearing portfolio which are not covered by the specific instruction, service the Bank will process the order in accordance 90.1. Within the limits envisaged specifically by these with its Order Execution Policy. contractual conditions and in light of the client’s Order Handling best interests, the Bank has full discretion and 89.16. The Bank will promptly, fairly and efficiently autonomy to perform the individual transactions process orders as and when they are received for the loan of transferable securities and may unless details of the order or market conditions operate freely without any need to obtain, on make it impossible to do so or if acting in your each occasion, your prior permission and without best interest or in accordance with your instruc- any obligation to act on specific requests from tions will require the Bank to take a different ap- you regarding the terms and conditions of carry- proach. ing out those loan transactions. 89.17. The Bank will inform you as soon as possible if 90.2. The Bank may perform any and all acts regard- there are any difficulties which may negative- ing the loan transactions and has full power, in ly impact the execution of your order or if the any case, to assess whether to proceed or not Bank is not able to execute your order due to to conclude those transactions and to decide on a systems failure, a delay or change in market the type and/or quantities of transferable securi- conditions or other circumstances. The Bank will ties to use. The Bank does not accept in relation attempt to execute your order by the end of the to you any obligation to enter into specific loan next Working Day unless you inform the Bank agreements with respect to Stock, even if you that you wish to cancel your order. give specific instructions to the Bank. 89.18. The Bank may forward your orders to other com- 90.3. The Bank shall ensure that each of the security panies within the Bank’s Group or its intermedi- lending transactions carried out under this sec- aries to execute your order. tion is properly performed, as provided in this 89.19. The Bank may in its sole discretion limit or pro- Agreement. For this purpose, the Bank shall hibit you (even if only temporarily) from engag- deposit bonds with a minimum Moody’s rating ing in certain trading activities or from trading in of “Baa1” or equivalent grade of other primary certain Financial Instruments if there is extreme rating agencies, for an amount at least equal market volatility or for any other valid reason the to the value of the securities loaned, from time Bank may tell you. The Bank will give you notice to time, by all of the clients of the Bank. Those of this. financial instruments shall be deposited in a 89.20. Where the Bank acts as the counterparty to your dedicated account held with Societè Generale

24 Securities Services S.p.A. (“SGSS SPA”), a bank duration of the loan, to the Borrower. with a registered office at Via Benigno Cres- 93.3. If the date by reference to which holders of trans- pi, no. 19/A – MAC 2, Milan, and entered in the ferable securities are identified as entitled to the Banking Register maintained by the Bank of Italy proceeds from such transferable securities oc- (registration number 5622). Such account shall curs during the term of a loan, then on the date be a dedicated account to support the security such proceeds are paid by the issuer, the Bank lending transactions under this Agreement for shall credit your Account with an amount equiv- the benefit of all the clients of the Bank carrying alent to such proceeds that would have been out these securities lending transactions. received by you in respect of the transferable securities if they had not been lent, net of any 91. Object and duration of the individual loans withholdings made in accordance with applica- 91.1. Each loan transaction will last no longer than one ble tax law. (1) Working Day. 91.2. Every loan transaction will be carried out in re- 94. Fee spect of Stock and each such loan transaction 94.1. For each loan transaction concluded, the Client will be treated as having been made when the is due a fee. This is calculated according to the Bank collects and transfers the financial instru- actual duration of the loan, the annual rate pub- ments from custody on your behalf to the cus- lished from time to time in the reserved area on tody of the Bank itself (the “Borrower”). By the the Bank’s website and given in the Loan Confir- tenth Working Day after the end of the month mation and the price of the financial instrument when the loan was made, the Bank will provide which appears in the official exchange price lists to you, in the reserved area on the Bank’s web- (the “Market Value”) on the delivery date. site, a confirmation of the transaction (the “Loan 94.2. That fee will be paid to you in the first 15 days of Confirmation”). The confirmation will specify the the month after the month of accrual, with a value essential features of the transaction: the type and date equal to the last day in the calendar month in quantity of transferable securities which have which it became due, based on the loans made in been borrowed, the start date and duration of the period, under the conditions notified from time the loan, the transaction date, the loan rate ap- to time in the Loan Confirmations. plied and the commission due to you. 94.3. The Bank does not charge you for any expendi- 91.3. The Bank may also borrow transferable securi- ture on the individual loan agreements conclud- ties which allow for coupon cashing or the pay- ed in line with this section 2G. ment of dividends. In those situations, the Bank will make to you a replacement payment of the 95. Return of equivalent transferable securities dividend or coupon, net of any sum required to 95.1. The Bank undertakes, including on the Borrow- be withheld, if necessary, according to applica- er’s behalf, to return to you, at the end of each ble law at the time. loan transaction, transferable securities of the 91.4. The Bank cannot borrow transferable securities if same kind and in the same quantity as those their transfer will create an obligation to report to borrowed. CONSOB (Italian Securities and Exchange Com- 95.2. You recognise and accept that the Bank mission), or, as the case may be, to any other – including on the Borrower’s behalf – to whom relevant Authorities, a significant change in the the ownership of the borrowed securities was stakes held in those financial instruments. transferred – may find it impossible to return the securities 92. Delivery of the financial instruments if the trading of the securities happens to be 92.1. You authorise the Bank to transfer the securities suspended, interrupted and/or excluded. from your Custody Account which are the subject In such cases, the Bank will pay you, on termina- of a loan transaction on the start date of such loan tion of the loan, not only the remuneration men- transaction specified in the Loan Confirmation. tioned in Clause 95 but also a sum of money 92.2. You authorise the Bank to carry out all the for- equivalent to the market value of the financial in- malities required for the transfer of the securities. struments which are the subject matter of the loan, fixed by mutual agreement with you, based on the 93. Effects of the loan. Distribution of proceeds last quote available and/or the likely market value. and rights inherent in the financial instruments 95.3. You also recognise that, for the purposes of the 93.1. Notwithstanding the use of expressions such assessment of the counterparty risk you accept as “loan”, “lend” and “borrow” etc. which are with respect to a securities loan transaction, it is used to reflect terminology used in the market a relevant fact that the security given by the Bank for transactions of the kind provided for in this in respect of the successful completion of the Section 2G, title to transferable securities “bor- transactions mentioned in Clause 90.3 consists of rowed” or “lent” shall pass from one party to the bonds with a minimum Moody’s rating of “Baa1” or other in accordance with the provisions of this equivalent grade of other primary rating agencies, section 2G. Title and risk in transferable securi- the value of which is likely to be adversely cor- ties which are the subject of a loan transaction related with the credit quality of the Bank (this is shall pass from you to the Borrower upon the sometimes known as “wrong-way risk”). transfer of such transferable securities from your Custody Account. 96. Termination 93.2. The voting rights, the proceeds from the trans- 96.1. Each current loan transaction will terminate au- ferable securities which are loaned, and other tomatically if the Bank fails to return equivalent supplementary rights and obligations inherent transferable securities by the time the individual in the financial instruments belong, for the entire loan transaction expires or if either party fails to

25 perform any of its obligations under this Section charges, which can have a significant impact on 2(G). any overall return, will be set out in the infor- 96.2. Upon such termination, each loan transaction mation relating to the relevant Investment Fund shall expire and the Bank shall immediately re- on the Investment Fund Platform but the Bank turn equivalent transferable securities in respect accepts no liability for the accuracy of this infor- of each individual loan transaction. mation, which has been provided to the Bank by each relevant Investment Fund’s manager. 97. Withdrawal 97.1. Both you and the Bank may withdraw from the 101. Key Investor Information Documents interest-bearing portfolio service, in compliance A Key Investor Information Document which has with the terms and conditions envisaged by the been created by the relevant Investment Fund’s General Terms which govern the relations and manager and which is the responsibility of the services with the Bank found in Clause 18.2. relevant Investment Fund’s manager is available 97.2. Withdrawal does not prejudice the validity and on the Investment Funds Platform in relation to performance of the individual loan transactions each Investment Fund. You must read the Key already in place or the parties’ obligations and Investor Information Document prior to deciding rights which arise from them. whether or not to deal. 97.3. Withdrawal from the “deposit of securities or financial instruments for custody and manage- 102. Dealing in Investment Funds and Application ment” also causes the withdrawal from the inter- of Section 2F (Specific Terms Relating to In- est-bearing portfolio service. vestment Services) 102.1 The Bank will, subject to your Account having 98. Terms which apply sufficient funds at all times, deal in Investment 98.1. The General Terms and the specific rules and Funds on your behalf in accordance with your conditions which govern the service for the instructions and will deal directly or indirectly custody in Clause 18.2 apply to all matters not with the relevant fund manager of the relevant covered expressly by the contractual provision Investment Fund on your behalf. The fund man- contained/ specified in this section 2G. ager is responsible for the price at which all deals are transacted and the Bank does not accept any liability for any errors made by the fund manager SECTION 2H Specific Terms regarding to the Invest- or its agents. ment Funds Platform 102.2 In addition to the provisions set forth in Section 1 (General Terms), the following provisions, in Sec- 99. The Investment Funds Platform tion 2F of these Terms of Business will also apply 99.1 The Bank will only process your orders to buy (as relevant) namely: and sell Investment Funds which are made avail- (a) clause 77 (Appropriateness) able by the Bank through the Investment Funds (b) clause 78 (Execution Only) Platform. Orders of Investment Funds on the In- (c) clause 79 (Client Categorisation) vestment Funds Platform may be subject to lim- (d) clause 80 (Conflicts of Interest) itation according to the taxation applicable to you. (e) clause 81 (Terms regulating inappropriate op- 99.2 The Bank may alter the range of Investment erations and conflicts of interest) Funds available through the Investment Funds (f) clause 82 (Joint Accounts) Platform at any time and may require the sale or (g) clause 83 (Risks of Investing) transfer of Investment Funds which have been (h) clause 87 (Inducements) removed from the Bank’s range of Investment (i) clause 89 (Order Execution) Funds. shall apply to these Specific Terms and to your 99.3 The Bank cannot guarantee that access to the dealing through the Investment Funds Platform. Investment Funds Platform will be available at all 102.3 The Bank will provide you with a trade confir- times without delay and you acknowledge that mation for each transaction that is executed on access to the Investment Funds Platform may your behalf no later than one business day af- become unavailable due to reasons outside the ter the Bank has received the confirmation from Bank’s control. the fund manager. The trade confirmation will 99.4 The Bank may delegate certain administrative include the following information (where appro- activities to third parties, such as the collection priate): of the subscription orders and the submission to (a) your name and Portfolio number; the Investment Fund. (b) order type; 99.5 The Bank will not provide you with advice or per- (c) sign of trade (buy, sell or switch); sonal recommendations in relation to any Invest- (d) date and time of execution; ment Funds. (e) order number; (f) unit or share identification details; 100 Charges (g) quantity and unit price of the unit or shares; 100.1 In addition to the fees payable directly by you to (h) total execution price; the Bank when dealing in the Investment Funds (i) total commissions and fees. in accordance with the Fee Schedule, the Invest- 102.4 The Bank may at its discretion accept or reject ment Funds themselves, in which you invest, any instruction to carry out any transaction. will include, if any, initial charges and ongoing 102.5 The Bank accepts no liability for the non-com- charges, which are imposed by each Investment pletion or delay in completing any order to deal Fund’s manager. It is your responsibility to en- in any Investment Fund caused by a closure of sure that you are aware of these charges. These a relevant market; a suspension of trading; an

26 inability to obtain a price quotation; a system 107. Conduct failure; or any other exceptional circumstance You agree that you will not take part in any activity beyond the Bank’s reasonable control. which might amount to market abuse or fraud. You 102.6 Details of when deals in Investment Funds are acknowledge that if the Bank has any suspicion that normally placed can be found in the relevant you are attempting to engage in market abuse or fraud section of the Bank’s website. the Bank may take any action that it considers to be 102.7 The quoted value of the Investment Fund will be appropriate. This could include refusing to act on your the net asset value as determined by the Invest- instruction to deal in Investment Funds. ment Fund’s manager on the day specified on the reserved area of the Bank’s website. SECTION 3 Data Protection Provisions Switching Investment Funds 102.8 Where you request that the Bank switches your Data Protection Information (“Privacy Code”) units in an Investment Fund to another differ- Index ent Investment Fund within the same family, as 1. Data Controller and Data Protection Officer described in the prospectus of the relevant In- 2. Purpose and legal basis of the processing vestment Fund, details of when the switch will 3. Categories of data handled normally be placed are set out in the relevant 4. Receivers or categories of receivers of data section of the Bank’s website. The switch confir- 5. Rights of the Data Subjects mation will follow the same provisions contained a. Dispensations to the exercise of the rights as per clause 102.3. A subscription fee may be b. Procedure for exercising rights incurred in relation to such transaction in accor- 6. Period for retention of data dance with the rules of the Investment Fund. 7. Transfer of data to other countries 8. Information note on the processing of data within the transfer activity of funds carried out by Regular Instructions S.W.I.F.T 102.9 You may set up regular instructions to invest into 9. Information note on the processing of data for Investment Funds in which case your payment navigation, cookies and data referring to the use will be taken by the Bank. The Bank will use all of the Call Centre reasonable efforts to carry out monthly dealing 10. Claim or report to the guarantor for the protec- in accordance with your instructions. Details of tion of personal data when deals in Investment Funds are normally 11. Change to this privacy policy placed can be found in the relevant section of the Bank’s website.

Settlement Privacy Code 102.10The Bank is not liable for any delay in the set- 1. Data Controller and Data Protection Officer tlement of a deal in Investment Funds resulting The Data Controller is FinecoBank S.p.A. - hold- from circumstances beyond the Bank’s control or ing Company of the FinecoBank Banking Group the failure of any person to perform all necessary with registered office at Piazza Durante no. 11, steps to enable completion. 20131 Milan (the “Bank” or “Fineco”). The Data Protection Officer may be contacted 103. Custody of your Investment Funds at Fineco, Data Protection Office, Piazza Durante Section 2E of these Terms of Business shall apply to no. 11, 20131 Milan, E-mail: [email protected], the holding by the Bank of units or shares in Invest- PEC: [email protected] ment Funds for you. 2. Purpose and legal basis of the processing 104. Interest on cash held in your Account Fineco processes personal data of natural or legal All cash will be held by the Bank for less than one day. persons, individual companies and / or self-em- No interest will be paid on such cash. ployed professionals (“Data Subjects”) for the following purposes: 105. Dividends and Income from Investment Funds a. to execute a contract to which the Data Sub- Subject to the offering documentation of a relevant In- ject is a party or to carry out pre-contractual vestment Fund, any dividends or income can be paid activities on the Data Subject’s request. Fine- into your Account with the Bank or automatically rein- co shall process any data as required by con- vested into Investment Funds. tract. The provision of the data necessary for these purposes represents, according to the 106. Corporate Actions cases, a contractual obligation or a necessary 106.1 It is your responsibility to identify any upcoming requirement for conclusion of the contract or actions by fund managers relating to the relevant In- carry out the pre-contractual activities re- vestment Funds and you should refer to the informa- quested by the Data Subject: in the absence tion made available on the Investment Funds Platform of these, the Bank will find it impossible to set relating to the relevant Investment Funds. up the relationship or to execute it; 106.2 If there is an action being taken by a fund manag- b. to fulfil Fineco’s legal obligations (for exam- er which may result in a material change to your hold- ple, obligations set out under the money ing we will try to inform you in advance but if we are laundering regulations, provisions imposed not notified by the fund manager we may be unable to by Supervisory Authorities, the Judiciary, etc.). inform you and in such circumstances we will not be Fineco shall process this information to com- liable to you for losses suffered. ply with any common law or statutory obliga-

27 tion. The provision of the data necessary for processing. The data in question will be exclu- these purposes represents a legal obligation; sively processed to execute the request from in the absence of them the Bank will find it the client. impossible to set up relationships and may be subject to reporting requirements; 4. Receivers or categories of receivers of data c. promote products and services of the Bank, of The data subject’s personal data may become other companies in the Group or of third-party available to natural or legal persons with the companies, including market research. Fine- title of controllers and to natural persons that co shall only process data for this purpose if process data to carry out the tasks assigned to the relevant Data Subject has given his/her them, including: Fineco employees, secondees, free consent and that he/she may revoke at temporary workers, interns, consultants and con- any time. The provision of the data necessary tractors. for these purposes is not obligatory and re- The Bank - without the consent from the data fusal to provide it shall not have any negative subject being necessary - may communicate consequence, other than the impossibility of the personal data in its possession: receiving commercial communications; • to those organisations to whom this commu- d. promote the sale of “dedicated” products/ nication must be made in compliance with services of the Bank, companies in the an obligation set out under the law, a regula- Group or third party companies, specifically tion or community rules; identified through the profiling and analysis, • to financial intermediaries to which person- including through the use of automated tech- al data can be communicated, on the basis niques and systems (for example big data), of the provisions of the money laundering of information relating to preferences, hab- regulation (see Article 39, paragraph 3 and its, consumer choices, aimed at subdividing 5 of Legislative Decree no. 231/2007) which the Data Subjects into homogenous groups provide for the possibility of proceeding with by behaviour or specific characteristics (cli- communication of personal data relating to ent profiling) updated through the inclusion suspicious transactions, of additional infor- of data with information obtained from third mation requested by Italy’s Financial Intelli- parties (enhancement). Fineco shall only pro- gence Unit (FIU) or of the existence or like- cess data for profiling purposes if the relevant lihood of investigations or in-depth requests Data Subject has given his/her free consent with regard to Anti Money Laundering or ter- and that he/she may revoke at any time. The rorist financing, both between intermediaries provision of the data necessary for these pur- part of the same Group and among interme- poses is not obligatory and refusal to provide diaries not belonging to the same Group, it shall not have any negative consequence, but involved in cases related to the same other than the impossibility of receiving dedi- customer or the same transaction; cated commercial communications. • to companies belonging to the Group or controlled by it or linked to it pursuant to article 3. Categories of data handled 2359 of the Italian Civil Code (even if located Fineco processes personal data collected directly from the data subject or from third parties, abroad), when this communication is allowed which includes, by way of example, identifi- as a consequence of a regulation from the cation data (for example, surname, forename, Privacy Guarantor or of a legal provision; and address, date and place of birth), data relating • in the other cases set out under the current to image (for example, identity card photo) and regulations on data protection including, in voice recording (i.e. Registration of telephone particular, companies on behalf of whom the orders, registration of telephone conversations Bank carries out the activities of an interme- with the data subject, also to safeguard the diary for the sale of their products / services. rights in the event of litigations or for quality The detailed list of the entities to whom the control purposes) and other data attributable to data may be communicated can be consulted at the above-mentioned categories.The Bank does the “Privacy” section of the website www.fineco- not request and does not process on its own in- bank.com. itiative any special categories of data of Data Subjects(for example, data which reveals the 5. Rights of the Data Subjects racial or ethnic origin, political opinions, and re- The current regulations on data protection give ligious or philosophical convictions, trade union specific rights to the Data Subject who, to exer- membership, genetic data, biometric data aimed cise those rights, may address themselves di- at identifying in an unequivocal way a physical rectly and at any time to the Data Controller. person, data relating to health or to sexual activity or sexual orientation of the person). However, The rights that may be exercised by the Data it is possible that, in order to execute specific Subject are described below: requests for services and operations inherent • Right of access; in the relationship with the client (for example • Right to rectification; payment of dues to parties or unions, subscrip- • Right to erasure; tions to associations, etc.) it has to process this • Right to restrict processing; data. Because the Bank cannot intercept or re- • Right to data portability; and fuse these requests, the contract proposal can • Right to object. only be accepted if the Data Subject has given The Data Subject may at any time amend their their written consent to the above-mentioned optional consent preferences.

28 Right of access Right to portability The right to access sets out the possibility for The right to portability allows the Data Subject the Data Subject to know what personal data to receive the personal data concerning him or concerning him or her are being processed by her, which he or she has provided to the Bank, the Bank and to receive a copy of it (in the case for other purposes. Each Data Subject may ask of further copies being requested a contribution to receive the personal data relating to them or to based on the costs incurred may be debited). The request their transfer to another data controller, in information provided include: the purposes of the a structured format, in common use and legible. processing, the categories of personal data concerned, where possible, the envisaged period for Note, data portability only relates to personal which the personal data will be stored, or, if not data (for example, surname, forename, address, possible, the criteria used to determine that peri- date and place of birth, residence), as well as a od , as well as the guarantees applied in the case set of data generated by the transaction activity of transfer of data to a third country and the rights that the Bank has defined for each macro-cate- that may be exercised by the Data Subject will be gory of product / service (for example, current detailed. or extinguished relationships, current account transactions). This right does not apply to non-au- Right to rectification tomated processing (for example, paper files or The right to correction allows the Data Subject to records). update or correct inaccurate or incomplete data held by the Bank relating to them. Right to object The right to object allows the Data Subject to ob- Right to erasure (so-called “right to be forgotten”) ject to the processing of their personal data in The right to be forgotten, allows the Data Subject certain circumstances. to require the erasure of personal data concerning a. Exceptions to the exercise of the rights him or her in the following special cases: The regulations on data protection recognise • personal data which are no longer necessary specific exceptions in relation to the exercise of for the purposes for which they were collected the Data Subject’s rights. and processed; The Bank may continue to process personal data • the Data Subject withdraws the consent on despite an Data Subject’s exercise of their rights which the processing is based, if there is no if one or more of the following applicable condi- other legal basis for the processing: tions applies: • the Data Subject objects to the processing • execution of a legal obligation applicable to and there are no further legitimate ground for the Bank; the processing carried out by the Data Con- • resolution of litigation and / or disputes (own troller: or of third parties); • to pursue a legitimate interest of its own or • internal and / or external investigations / in- third parties and there is no prevailing legal spections; basis of the Data controller to proceed with • requests from Italian and / or foreign public the processing, authorities; • for direct marketing purposes, including the • reasons of relevant public interest; profiling connected with that; • execution of a contract in force between the • the personal data of the Data Subject has bank and a third party; and/or been processed illegally; and • any further blocking conditions / status of a • the personal data have to be erased for com- technical nature identified by the Bank. pliance with a legal obligation. This right may be exercised even after withdrawal b. Procedure for exercising rights of consent. In order to exercise his/her rights, a data subject may contact the Bank Right of restriction • at the email address privacy@finecobank. A Data Subject may request the Bank to limit the com or way their data are processed under certain cir- • make the request in writing to FinecoBank, cumstances. The right of restriction of processing Via Rivoluzione d’Ottobre 16, 42123 Reggio may be exercised by the Data Subject in the case Emilia. of: The period for the response is one (1) month, • the processing is unlawful, as an alternative to extended to two (2) months in cases of particular erasure of the data; or complexity; in these cases, the Bank shall provide • request for correction of the data (pending ver- at least one interim communication within one (1) ification of the request); month. In principle, the exercise of the rights is • When an individual has objected to process- free; having assessed the complexity of dealing ing (pending verification by the Bank of the with the request and, in the case of clearly un- objection); founded or excessive requests (including repeat- • When the Bank has no further need for the ed requests) the Bank reserves the right to ask for data but the Data Subject requires the person- a contribution. The Bank has the right to ask for al data to establish, exercise, or defend legal further information necessary for the purposes claims. of identifying the requesting party. With the exception of storage, where processing has been restricted any processing of the personal 6. Personal data storage periods data is prohibited. Fineco processes and keeps the personal data

29 of the Data Subject throughout the period of nication), with registered office in Belgium (www. the contractual relationship and for period af- swift.com). ter the contract is at an end, for the execution of the obligations inherent and consequent upon The Bank informs S.W.I.F.T. (Controller of the it, to respect the applicable legal and regulatory S.W.I.F.T. Net Fin system) of the data necessary obligations, as well as for its own or third-party for execution of the transactions (for example, defence purposes, up to expiry of the period for the names of the payee, the beneficiary and the storage of data. In particular, the period of stor- respective banks, the bank details, the amount age of personal data of the Data Subject runs: and, if stated, the reason for the payment). • for products / services included in the mul- The normal functioning of the service includes ti-contract: from extinction of the current a continuous and massive transborder data account, independently of closure over time flow, due to the location of the SWIFT operating of other connected products / services; and/ centres. The store-and-forward capability of the or two SWIFT operating centres in Europe and in • for all other products / services regulated the US operates as follows: the messages are by specific contracts (for example, credit decrypted automatically in the operating cen- cards, loans): from the date of closure of tres to store and forward the information in a few the contractual relationship relating to the milliseconds. This “store-and-forward” process is specific product / service. intended to validate (control the correctness or Fineco has the obligation to communicate the the presence of letters/numbers in the manda- request for erasure to other data controllers who tory message fields) the information (for instance process personal data for which the Data Subject make sure that the correct currency code of the has requested erasure. transfer is filled in, e.g. “EUR”) on the basis of con- At the end of the storage period, the personal tents that is standardized. During this process, data referring to the Data Subject will be erased the information is also stored for 124 days in both or kept in a form that does not allow the iden- operating centres for security (back-up) reasons tification of the Data Subject, unless its further which then act as perfect “mirrors”. This ensures processing is necessary for one or more of the that the data storage is parallel and the data are following purposes: identical. • resolution of disputes and / or litigation com- As a consequence of the TFTP (“Terrorist Fi- menced prior to expiry of the storage period; nance Tracking Program”), SWIFT is subject to le- • to follow up investigations / inspections by gally binding requests to provide the U.S. Treas- the functions of internal monitoring and or ury Department (UST) with data located in its US external authorities commenced before ex- operating centre, which is necessary for the pur- piry of the preservation period; and pose of the prevention, investigation, detection • to comply with requests from Italian and / or or prosecution of terrorism or terrorist financing foreign public authorities sent / notified to The Bank recalls that the Data Subject retains the the Bank prior to expiry of the preservation rights indicated in paragraph “Rights of the data period. subjects” of this privacy notice.

7. Transfer of data to other countries 9. Information note on the processing of data for Personal data may also be transferred to coun- navigation on web site, cookies and data refer- tries not belonging to the European Union or ring to the use of the Call Centre) to the European Economic Area (so-called This section describes the FinecoBank S.p.A. “Third-Party Countries”) recognised by the Euro- website function, with reference to the process- pean Commission as having an adequate level ing of personal data of users who consult it. The protection of personal data. Fineco shall only information is provided only for the websites of transfer data to other Third-Party Countries if FinecoBank S.p.A. and not for other websites such countries have an adequate level of pro- that may be consulted by the user through links. tection of personal data compared to that of the European Union (for example, through the The information also considers Recommenda- signing of the standard contractual clauses set tion no. 2/2001 that the European Authority for out by the European commission) and the Fine- the protection of personal data, gathered in the co suppliers located in the third-party country Group established by art. 29 of directive no. have agreed to appropriate measures so that 95/46 / CE, adopted on May 17, 2001 to identify the exercise of the rights of the Data Subject is minimum requirements for collection of personal protected. data online and, in particular, the methods, times and nature of the information provided to users 8. Information note on the processing of data when they link to web pages. within the transfer activity of funds carried out Place of data processing by S.W.I.F.T. The processing of data connected to the web To support international financial transactions services takes place at the aforementioned (for example bank transfers abroad) and any Registered Office and is handled only by Fine- specific operations in the national area (for ex- coBank S.p.A. personnel, persons authorized to ample transfers in foreign currency and / or with process personal data or by authorized persons a non-resident counterparty), requested by the of FinecoBank S.p.A. No personal data deriving Data Subject, it is necessary to use international from the web service is disclosed. The personal messaging service handled by S.W.I.F.T. (Socie- data provided by users are used for the sole pur- ty for Worldwide Interbank Financial Telecommu- pose of performing the service requested and

30 are communicated to third parties only if this is obtain what is requested. necessary for this purpose. Processing methods and security measures Navigation data Personal data are processed with automated The IT systems and software procedures used and non-automated tools, for the time strictly to operate this website acquire some personal necessary to achieve the purposes for which data whose transmission is implicit in the use they were collected. Specific security measures of the Internet, which is based on the TCP / IP are observed to prevent the loss of data, illicit or protocol. This information that is not collected to incorrect use and unauthorized access. be associated with identified interested parties, To find out more, you can consult the section of but which by its very nature could, through pro- the web site dedicated to safety cessing and association with data held by third Cookie parties, allow users to be identified as navigators. Identification of the consumer habits and pro- This category of data includes the “IP addresses” pensities of the Data Subject will be analysed or domain names of the computers used by us- by means of the use of cookies and other similar ers who connect to the site, the addresses in URI technologies, in the respect of the appropriate (Uniform Resource Identifier) of the requested safeguards and necessary measures, according resources, the time of the request, the method to the applicable regulation. used submitting the request to the web server, The full Cookie policy is available at the dedicat- the size of the file obtained in response, the nu- ed area on the website www.finecobank.com. meric code indicating the status of the response Underage given by the web server (successful, error, etc .) FinecoBank S.p.A. does not use its website to and other parameters relating to the operating request data from persons under the age of 18. system and the IT environment user. These data are used for the sole purpose of obtaining anon- 10. Claim or report to the Italian data protection ymous statistical information on the use of the authority (Garante per la protezione dei dati site and to check its correct functioning on the personali) FinecoBank S.p.A. website. It should be noted Where the Data Subject believes he/she has that the aforementioned data could be used to suffered a breach of their rights they may make ascertain responsibility in the event of computer a claim or a report to the Italian data protection crimes against the FinecoBank S.p.A. website or authority or contact the relevant legal authorities to other sites connected to it. In other case, the in his/her own jurisdiction. Contact details of the navigation data are deleted immediately after Information Commissioners Office can be found the relative statistical processing and in any case at www.garanteprivacy.it. are kept for 24 months from the time of collection. 11. Changes to this Privacy Policy Data provided by the user on voluntarily basis Fineco reserves the right to make changes to Some particular services requested by the inter- this policy from to time to time. Please check ested party (e.g. chat, contact forms, etc.) involve back on the website to be aware of any updates. the subsequent acquisition of some personal data of the applicant, including the e-mail address, necessary to respond to requests. Annex I Specific summary information will be progres- sively reported or displayed on the pages of the ORDER EXECUTION POLICY site prepared for these particular services on re- This document identifies, for each category of instru- quest. ments, the trading venues which, in the opinion of the Call center Bank, will enable you to achieve the best possible The systems and procedures of Bank’s Call long-lasting result. Center acquire some data referring to customer The execution policy will only be represented in the calls. This category includes the remote number event of significant changes and you can always re- of the caller (where not hidden), the navigation cover it from the website page dedicated to MiFID data in the IVR mast (i.e. the actions / keystrokes regulations. that the customer performs to access the various services), the duration of the call, as well as only Execution Policy in cases expressly provided and with prior notice Index to the interested party, audio recording of the call. The aforementioned data are processed in or- 1 Foreword der to obtain statistical information on the use of 1.1 Introduction the Call Center, to check its correct functioning 1.2 Customer classification and ensure its safety, as well as to ascertain re- 1.3 Asset classes and Investment Services sponsibility in the event of any offenses, to the offered detriment of the Bank or of the customers of the 1.4 Scope same. 1.5 Execution venues Optional personal data 1.6 Assigning newly issued financial The user is free to provide personal data con- instruments tained in the specific electronic request forms, in 1.7 Aggregation of orders the sections of the website set up for particular services on request, excluding for those regard- 2 Execution of orders ing navigation data. It should be noted that the 2.1 General aspects refuse to provide such data make impossible to 2.2 Individuation of the Execution Venue

31 2.2.1 Identification of possible Execution tomers and eligible counterparties. The interme- Venues diary must apply the adopted Execution Policy to 2.2.1.1 Direct execution by the Bank on retail and professional customers. Its application Regulated Markets and/or MTF and/or may also be extended to those eligible counter- OTF parties who have explicitly requested treatment 2.2.1.2 Indirect execution through an as professional customers. intermediary 1.2. Customer classification 2.2.2 Evaluating criteria of the Execution FinecoBank S.p.A. (hereinafter also “Fineco- Venues for executing orders Bank” or the “Bank”) operates in respect of 2.2.2.1 Price retail clients, professional clients and eligible 2.2.2.2 Costs counterparties. The classification made by the 2.2.2.2.1 Direct execution of the order by the Bank is communicated to each customer prior Bank on a market to providing investment services together with 2.2.2.2.2 Transmission of the order to a the warning concerning the possibility of asking negotiating intermediary the Bank for a different type of classification. In 2.2.2.3 Speed of execution accordance with the above relevant legislation, 2.2.2.4 Likelihood of execution the Execution Policy does not apply to eligible 2.2.2.5 Likelihood of settlement counterparties, unless these should request to 2.2.2.6 Other criteria be treated as professional customers. 1.3. Asset classes and Investment Services offered 3 Execution Venues The Bank has defined the financial instrument 3.1 Definition of homogeneous groups of classes (“Asset Classes”) based on the character- orders istics of the instruments themselves. Each financial 3.1.1 Definition of the financial instrument instrument belonging to a certain class is subject classes (Asset Classes) to the provisions contained in this Execution Poli- 3.2 Evaluation of Execution Venues cy for its Asset Class on a differentiated basis ac- 3.3 Equities and similar securities cording to the investment service offered. 3.3.1 Domestic equities (UK) and similar 1.4. Scope securities The Execution Policy applies to the execution 3.3.2 Foreign equities and similar securities of all orders given by customers to the Bank for 3.4 Rights of option and warrants purchasing or selling financial instruments. The 3.5 Bond securities Bank performs, according to its own free choice, 3.5.1 Italian government bonds discretionary orders (e.g. automatic stoploss 3.5.2 Other debt securities listed on orders) whilst respecting the best interests of regulated markets and/or MTF and/ the customer. Moreover, should the customer or OTF to which the Bank has direct indicate in his instructions a different Execution access (interconnected markets) Venue, in any case included among those made 3.5.3 Bonds not listed on interconnected available by FinecoBank, the Bank will follow markets these instructions. In such cases, the Execution 3.6 Covered warrants Policy will only apply to aspects other than the 3.7 Certificates identification of the Execution Venue, thereby 3.8 Repurchase agreements and considering the commitment to provide the best Securities loan possible result to the customer as fulfilled. 3.9 Derivatives 1.5. Execution venues 3.9.1 Domestic regulated derivatives In drawing up this Execution Policy, the Bank 3.9.2 Foreign regulated derivatives examined various Trading Venues (Regulated 3.9.3 OTC Derivatives Markets - MR, Multilateral Trading Facilities - MTF, 4 Final provisions Organised Trading Facility - OTF, Systematic In- ternalisers - SI, Market Makers and other liquidity 5 Attachment 1 providers) in order to assess their potential in re- 5.1 Regulated, MTF and OTF lation to providing the best possible result for the interconnected markets customer on a lasting basis. 5.2 Intermediaries When the Bank has no direct access to an Exe- 5.3 Classes of financial instruments cution Venue, it uses other intermediaries for executing an order. In this regard, the Bank has de- 1. Foreword veloped relationships with several intermediaries 1.1. Introduction who, over time, have offered timely and reliable Intermediaries must adopt an “order execution execution services, without significant quality strategy” (hereinafter also “Execution Policy”) in differences. In accordance with the principle of order to obtain the best possible result (hereinaf- seeking the best possible result in the interest of ter also “Best Execution”) for their customers. the customer, the Bank carries out regular peri- Identifying an Execution Venue for orders (here- odic reviews of inafter the “Venue” or “Market”) as the “best” is the intermediaries selected for this purpose. not, however, a guarantee of obtaining the best The Bank reserves the right to also execute or- possible result for each individually executed orders on its own behalf, acting as a direct counter- der but for the whole of the orders handled. party of the customer; usually this happens: Current legislation also requires that all custom- • In general, in order to allow the customer the ers should be classified in one of the following possibility of placing orders for low-liquidity categories: retail customers, professional cus- financial instruments, especially during par-

32 ticular market conditions and / or to reduce tities will be carried out in accordance with the settlement risks; time priority principle of order receipt. • Specifically, for certain equity instruments listed on a Trading Venue, the Bank may execute 2. Execution of orders the order by internalising it on its own System- 2.1 General aspects atic Internaliser; in any case the Bank guaran- This Execution Policy constitutes an integral part tees a price at least equal to the best one of- of the general conditions applied to investment fered by the relevant market to the customer. services provided by FinecoBank. The customer authorises the Bank to assess, at The Execution Policy includes, in respect of each its own discretion, in the case of an order placed class of financial instruments and investment ser- with a price limit concerning shares traded on a vice provided, information concerning the Execu- Trading Venue, which cannot be executed im- tion Venues where the intermediary will execute mediately under prevailing market conditions, customer orders and the selection criteria of the whether it is appropriate to make public, in whole selected Locations. or in part, the order at issue so that it may be These Venues enable the Bank to obtain, in a easily accessed by other market participants. lasting manner, the Best Execution for customer In giving such authorisation, the Customer ac- orders. This does not mean that the Bank takes knowledges the implication that his order may responsibility for achieving the best possible not be visible to the market. outcome for each individual order; rather that 1.6. Assigning newly issued financial instruments the Bank must apply its Execution Policy to each The allocation of newly issued financial instru- order so as to obtain the best possible result in ments as part of Initial Public Offering transac- accordance with the terms of its declared execu- tions (IPO’s), should the retail customers’ ap- tion policy strategy. To that effect, it is necessary plications for subscription be higher than the and sufficient that the use of the procedure laid availability of financial instruments offered to the down in the Execution Policy should determine, public, is carried out by random draw, according in most cases, the achievement of the best pos- to specific procedures (generally defined in the sible result for the customer. Offer Document) designed to uphold the princi- In any case, the customer has the right to give ples of equity and fairness in their allocation. specific instructions regarding the Execution Ven- Although the rules of Best Execution do not ap- ue where the order must be executed, in any case ply in the case of these transactions, the para- among those made available by FinecoBank, for graph has been included in this Execution Policy each single order. In this case the Bank is obliged in order to illustrate the rules of conduct followed to follow the customer’s instructions and will apply by the Bank when placing financial instruments this Execution Policy only to aspects other than as part of IPO operations. the identification of the Execution Venue, thereby 1.7. Aggregation of orders considering the commitment to provide the best The Bank may place an order made by a cus- possible result to the customer as fulfilled. tomer together with other customers’ orders. Aggregation of orders will be carried out in order Note: customers that provide specific instructions for to minimise the risk of penalising any one of the the execution of an order on a Venue other than the customers whose orders are aggregated. one defined by the Bank in accordance with this Ex- In the event that the regulations of the individual ecution Policy, do it at their own risk; the Bank will not Execution Venues used by FinecoBank (Regulat- provide any further specific warnings on this matter for ed Markets, Multilateral Trading Facilities, etc.) each single order performed according to specific in- should envisage minimum lot size (e.g. based on structions from the customer. volume or equivalent value), the Bank may proceed with the aggregation of orders to meet the FinecoBank applies a static type of Execution minimum lot size. Specifically: Policy. This means that the Bank has established • Orders received by the Bank at market price rules in order to obtain the Best Execution of an for a quantity equal or multiple to that of the order, according to which orders with the same minimum lot size will be sent to the trading characteristics will always be routed to the same markets; Execution Venue, without prejudice to cases in • Orders received by the Bank at market price which the Bank makes use of the option to exe- for a lower or different quantity than the min- cute orders as the customer’s direct counterpar- imum lot size or its multiples will remain valid ty (see 1.5). The chosen static method excludes until cancelled and may be aggregated to the current price quoted on the various possible achieve the minimum lot size. Execution Venues when placing an order, as an Should the process of order aggregation enable option factor for the Execution Venue of said achieving the minimum lot or its multiples, the order. Therefore, neither real-time monitoring of aggregate orders will be sent to the market for existing prices on the various markets, nor of the execution during the closing auction of the same actual costs for the specific executed order will day of receipt of the orders; should the aggre- be carried out. gate orders received during the day not achieve 2.2 Individuation of the Execution Venue the minimum lot size (or its multiples), or should Within the guidelines laid down by regulations, the aggregate orders sent to the market in the the Bank defines its Execution Policy inde- closing auction not be executed, the orders will pendently and at its own discretion, following a be sent to the market during the following days procedure which involves the following steps: in the manner described above. In case of partial • Definition of the Asset Classes; execution, the allocation of the executed quan- • For each Asset Class, definition of homo-

33 geneous groups in which to classify orders each homogeneous group of orders, are, in or- according to the following variables: type of der of priority, as follows: customer (retail/professional), type of order • The price of the financial instrument; (limit, market or “at the market” orders), size • The costs associated with the order process- of the order, the liquidity of the financial in- ing; strument; • The speed of execution of the order; • Identification of Execution Venues on which • The likelihood of execution and settlement it is possible to execute orders concerning of the order; financial instruments belonging to a particu- • Any other relevant factor to the execution of lar Asset Class; the order. • Definition of the criteria on which to assess For retail customers the main component in or- the “quality of execution” that FinecoBank is der to deliver the best possible result is the “To- able to offer for each Venue; tal Consideration”, consisting of the price of the • Definition of the weights to be assigned to financial instrument and of the costs related to each evaluation criterion in order to assess the order execution. the “quality of execution” for each homoge- 2.2.2.1 Price neous group of orders; In order to determine the benefits of a Execution • Enhancement of the evaluation criteria con- Venue with reference to the price criterion, the cerning “quality of execution” for each iden- Bank considers the price-forming mechanisms tified Venue; of the various selected Venues. In particular, the • Determination of the Execution Venue for quality of the price is evaluated in relation to the each homogeneous group of orders based market liquidity, to the average applied spread on the ranking of the Venues according to (bid-ask differential) and to the number of trading the weighted values assigned to each eval- participants in the Venue. In general, the Bank uation criterion of the “quality of execution”. prefers Execution Venues which constitute the The Venue with the best “quality of execu- reference market or which adopt its prices, if tion” is the one chosen to channel the indi- they offer a guarantee of liquidity. Specific price vidual orders belonging to the same group. formation methods (order driven, quote driven or The above analysis will be reviewed at least an- hybrid models) may be preferred depending on nually and whenever there are significant varia- categories of financial instruments. tions in the elements considered (such as defin- 2.2.2.2 Costs ing new classes of financial instruments, defining Costs represent a part of the “Total Considera- new investment services offered, availability of tion” and are evaluated in relation to the follow- new Execution Venues with important operating factors: ing volumes, changes in the evaluation criteria 2.2.2.2.1 Direct execution of the order by the Bank on concerning the “quality of execution” considered a market sufficient to alter the Venue ranking). Costs include, in addition to the trading fees ap- 2.2.1. Identification of possible Execution Venues plied by the Bank, the costs of third-party suppli- The Bank has considered the Execution Venues ers (e.g. market costs, including those related to which have a significant trading volume in rela- transaction settlements). tion to the different Asset Classes, taking into 2.2.2.2.2 Transmission of the order to a negotiating account the direct or indirect (through another intermediary intermediary) access possibilities. Among the The Bank may use a negotiating intermediary to examined Venues, the possibility that the Bank which it transmits the order for its execution. In this itself should act as a direct counterpart to the case, in addition to the costs mentioned above, it customer when executing the order has also is necessary to add the intermediary’s costs. been taken into consideration. 2.2.2.3 Speed of execution 2.2.1.1 Direct execution by the Bank on Regulated Mar- The period of time which elapses between the kets and/or MTF and/or OTF receipt of the customer’s order and confirmation Direct connections to Regulated Markets and/or of the order processing by the Execution Venue. to MTF and/or to OTF created by FinecoBank are The speed of the execution of the order by the specified in Attachment 1, par. 5.1. Venue essentially depends on its market model. 2.2.1.2 Indirect execution through an intermediary 2.2.2.4 Likelihood of execution If the Bank does not have a direct connection The likelihood of execution of an order is directly to the Market, it uses an intermediary to whom it related to the liquidity and depth of the Venue. transmits the order to be executed. In this case 2.2.2.5 Likelihood of settlement costs will also include those charged by the ne- With regard to the likelihood of settlement, it gotiating intermediary. The Bank chooses its ne- considers the risk connected to the transaction gotiating intermediaries among the major inter- liquidation and to settlement or the possibility of national brokers on the basis of criteria such as: failing to duly comply with obligations to deliv- direct access to the markets of interest, availabil- er financial instruments or the related payment ity of electronic platforms for transmitting orders flows. via dedicated lines, reliability of the counterparty 2.2.2.6 Other criteria also as concerns transaction settlement activi- The Bank’s Execution Policy also considers oth- ties. The list of intermediaries currently used by ers “quality of execution” evaluation criteria such the Bank is given in Attachment 1, paragraph 5.2. as compensation system, circuit breaks, sched- 2.2.2 Evaluating criteria of the Execution Venues for uled auctions or other considerations that could executing orders be relevant in order to achieve the best possible The “quality of execution” evaluation criteria, for result for the client.

34 3. Execution Venues on the Regulated Market or MTF or OTF, a mini- The methods for defining homogeneous groups mum lot size other than 1 must be given, the Bank of orders and the evaluations carried out in order may proceed to aggregate the orders as indicat- to identify the chosen Execution Venue, based ed in paragraph 1.7 “Aggregation of orders”. on the criteria described in section 2.2.2 and for Orders relating to the financial instruments under each defined Asset Class, are given below. consideration, may be executed by the Bank, as 3.1. Definition of homogeneous groups of orders the direct counterpart of the customer, outside In order to define homogeneous groups of orders, the regulated market, in the following cases: for each of which the Execution Venue according • When they concern automatic orders placed to the procedure described in the previous para- for compulsory closure at the end of day con- graph must be identified, the following order char- cerning a position in intraday margin trading acteristics have been taken into account: remaining open; the price in this case will • The class of financial instrument subject of correspond to that of the closing auction on the order; the MTA (Electronic Stock Market); • The class of the customer placing the order • When they concern orders regarding the (retail or professional); financial instruments identified by the Bank • The nature of the order (limit, market, “at the which are listed in a specific section of the market” price); reserved area of the website, for which the • The size of the order (lower/equal or great- Bank itself, as Systematic Internaliser, lists er equivalent value than a predetermined bid and ask prices, equal to the best offered threshold); and from time to time by the above-mentioned • The liquidity of the financial instrument sub- reference market. In any case, the Bank reject of the order (the thresholds used to de- serves the right to update its quotes at any fine whether the financial instrument is liquid time and to withdraw them in the event of or illiquid have been specified for each Asset exceptional market conditions (e.g. suspen- Class). sion of the title from trading on the reference 3.1.1 Definition of the financial instrument classes (As- market). The Bank shall decide the quantity set Classes) of its quotations. Financial instruments with similar characteristics 3.3.2 Foreign equities and similar securities are grouped into classes. All financial instru- Generally, the stock exchange of the issuing ments belonging to an Asset Class are subject country of said financial instruments offers the to the provisions of this Execution Policy for that highest liquidity and consequently the greater class. The full list of the above-quoted classes is likelihood of execution and the best prices. given in Attachment 1 (paragraph 5.3). Consequently, the negotiation of foreign se- 3.2 Evaluation of Execution Venues curities occurs on Stock Exchanges of the Each homogeneous group of orders was as- issuers’ home country: directly, should the signed a weight for each evaluation criteria used, Bank adhere to the market of interest, or thereby defining a ranking list of the Execution through an intermediary in the other cases. Venues under consideration, which allowed Orders for certain securities listed on Equi- identifying the chosen Execution Venue under duct – a section of the Regulated Market of this Execution Policy. The following paragraphs the Berlin Stock Exchange, will be sent to will illustrate the choice made in relation to each an intermediary who, excluding pre-defined type of Asset Class. cases, will execute them on that market. The 3.3 There is counterparty risk when the execution/ constantly updated list of these securities is transmission of orders is provided over-the- published on the FinecoBank website. counter and the Bank will upon receipt of a spe- Orders relating to the financial instruments cific customer request, supply additional infor- under consideration, may be executed by mation regarding the consequences of the OTC the Bank, as the direct counterpart of the execution.Equities and similar securities customer, outside the regulated market, in In addition to equities and similar securities, this the following cases: Asset Class also includes convertible bonds, eq- • When they concern automatic orders uity warrants (as they are tradable in the same placed for compulsory closure at the segment of the equity securities of reference) end of day concerning a position in intr- and ETFs (Exchange Traded Funds). aday margin trading which has remained 3.3.1 Domestic equities (UK) and similar securities open; the price in this case will corre- Domestic equities and similar securities are spond to that of the closing auction on traded on Regulated Markets (London Stock Ex- the reference market; change) or MTFs or OTFs on which these instru- • When they concern orders regarding the ments are admitted for trading; should the instru- financial instruments identified by the ment subject of the order be traded on more than Bank and listed in a specific section of the one above-mentioned Trading Venues, the orders reserved area of its website, for which the will be transmitted to the Regulated Market. Bank itself, as Systematic Internaliser, lists Orders concerning Exchange Traded Funds bid and ask prices, equal to the best of- (ETFs), Exchange Traded Commodities (ETCs) fered from time to time by the above-men- and listed Mutual Funds are normally executed tioned reference market. In any case, the via the electronic trading system of Borsa Ital- Bank reserves the right to update its iana called ETF Plus (“Electronic Market for ex- quotes at any time and to withdraw them change-traded funds and ETFs”). in the event of exceptional market con- In the event that for a given financial instrument ditions (e.g. suspension of the title from

35 trading on the reference market). The financial instruments under consideration, may Bank shall decide the quantity of its quo- be executed by the Bank, as the direct counter- tations. In the event that for a given finan- part of the customer, outside the Trading Venue, cial instrument on the regulated market or when these concern automatic orders placed MTF or OTF, a minimum lot size other than for compulsory closure at the end of day of a 1 must be given, the Bank may proceed to position in intraday margin trading which has re- aggregate the orders as indicated in para- mained open; the price in this case will be equal graph 1.7 “Aggregation of orders”. to the best price offered by the MTFs, the OTFs 3.4 Rights of option and warrants or the Regulated Markets of reference as men- The same considerations outlined above con- tioned in the previous paragraph, even for quan- cerning domestic and foreign equities shall also tities greater than those associated with the best apply to preemptive rights, as these are financial price in such MTFs, OTFs or markets’ books. instruments directly related to the underlying 3.5.3 Bonds not listed on interconnected markets shares. In the interest of customers, in order to Customers’ orders concerning bonds not listed limit the direct costs associated with executing sell on the interconnected markets are generally orders of unexercised options, the Bank reserves transmitted to the counterpart identified on the the right to group these orders and to send them market which offers the best conditions of exe- cumulatively to the market in a manner that en- cution in terms of price, taking into account the sures equal treatment to all interested customers. likelihood of execution and the size of the order. 3.5 Bond securities Should FinecoBank be able to offer its listing on This category includes debt securities (e.g. better terms than other market counterparties, Government bonds, supranational organisation orders may be processed by FinecoBank deal- bonds, bonds issued by companies). ing as a principal acting on its own behalf. In this 3.5.1 Italian Government bonds case the Bank does not assume any obligation FinecoBank offers the possibility of subscribing to conclude the transaction, but merely provides to Italian Government bonds on issue. To this its own price based on the calculation of the fair end, the Bank participates in government bond value of the financial instrument according to auctions through an authorised intermediary to prevailing market conditions. whom it transmits the requests received from 3.6 Covered warrants customers. Orders for covered warrants are directly execut- On the secondary market, FinecoBank offers ed on the respective domestic Stock Exchanges the possibility of negotiating Italian government (if the Bank adheres to that market) or through an bonds on the regulated Borsa Italiana market - intermediary. The best execution price is guar- MOT segment - and on the MTF EuroTLX. In the anteed by the execution on the issuing country’s absence of any instructions from the customer, market. the Trading Venue chosen by FinecoBank for this 3.7 Certificates type of financial instrument is MOT which, accord- Primary Market: FinecoBank offers the possi- ing to analyses conducted, has shown on average bility of subscribing to newly issued certificates a better quality of performance in terms of total exclusively in cases where FinecoBank has re- consideration (price + costs of execution), and/or ceived a mandate to place such certificates by a greater liquidity and, consequently, a greater the relevant issuer. In this case the transaction is likelihood of execution compared with EuroTLX. carried out over-the-counter with the issuer. Orders relating to the financial instruments under Secondary Market: Customers’ orders concern- consideration, may be executed by the Bank, as ing certificates of which the Bank has handled the direct counterpart of the customer, outside the placement, can be traded by FinecoBank on the regulated market, when these concern auto- its own behalf until these instruments are listed matic orders placed for compulsory closure at the on the markets given below. end of day of a position in intraday margin trading In this case the Bank does not assume any ob- which has remained open; the price in this case ligation to conclude the transaction, but merely will be equal to the best price offered by MOT, provides its own price based on the calculation even for quantities greater than those associated of the fair value of the financial instrument ac- with the best price in that market’s book. cording to prevailing market conditions. 3.5.2 Other debt securities listed on regulated markets From the moment the certificates are listed on the and/or on MTFs and/or on OTFs to which the MTF Sedex or on the Cert-x segment of EuroTLX, Bank has direct access (interconnected markets). orders relating to such financial instruments will For securities which, in addition to being listed be carried out at these Trading Venues. on a regulated market or on an MTF or on an 3.8 Repurchase agreements and securities loans OTF – other than EuroTLX – are accessed direct- Customers can enter into repurchase agreements ly by the Bank, and which are also listed on the (repos) exclusively with FinecoBank as the direct MTF EuroTLX, the chosen Execution Venue is the counterpart. The Bank operates dealing as a MTF EuroTLX which, according to analyses con- principal, quoting the rate offered to the custom- ducted, showed on average a better quality of er based on the duration of the operation and of execution in terms of total consideration (price + the amount invested. The terms applied are pub- costs of execution) compared with the MOT. Con- lished on the www.finecobank.com website. versely, securities that are not listed on EuroTLX, Securities loan operations, offered with refer- but only on a different MTF, OTF or Regulated ence to a particular selection of equities iden- Market to which the Bank has direct access, the tified by the Bank, are also always carried out chosen Execution Venue is said different MTF, directly between the Bank and the customer at OTF or Regulated Market. Orders relating to the predetermined rate conditions. The list of securi-

36 ties on which loan operations may be carried out time for time offered by the Market of reference, and the related terms applied by the Bank are can be executed by the Bank, as a direct coun- published on the www.finecobank.com website. terparty of the customer, outside of the regulated 3.9 Derivatives market. This Asset Class includes all categories of finan- In any case, the Bank reserves the right to up- cial instruments set out in paragraphs from 4 to date its price quotations at any time and to with- 10 of Section C of the TUF (Consolidated Finance draw them in the event of exceptional market Act) attachment. conditions (eg suspension of the security from 3.9.1 IDEM regulated derivatives trading on the Market of reference). The Bank Orders related to IDEM regulated derivatives, decides on the quantity of its price quotations. In traded on the basis of standardised contracts, order to guarantee the settlement of transactions are executed on IDEM. Operations concerning concluded within the Systematic Internaliser ca- the following instruments: pacity, the Bank provides an adequate guaran- • Futures, minifutures and options on the FTSE tee to protect the investor by depositing financial MIB; instruments with third-party intermediaries. • Futures and options on individual stocks. 3.9.3 OTC Derivatives In relation to the FTSE MIB options, short sale Each contract for derivatives unlisted on regulat- orders are not accepted (i.e. it is only possi- ed markets is carried out directly between the ble to trade options which are in the personal Bank and the customer based on an individual portfolio). Short sale orders of put options are negotiation. The Bank guarantees that the ap- not allowed in respect of options on equity plied terms are in line with prevailing market securities, while the execution of short sale conditions. With reference to CFDs (Contracts for orders of call options is subject to the avail- Difference as laid out in Directive 2014/65/UE, ability of the underlying shares, which in this Section C of Annex I (9)), the Bank offers the cus- case are made unavailable for the entire du- tomer its quotes, within the special section of the ration of the transaction (i.e. until the option reserved website area, from the date on which it expires, or until closure of the short position starts trading these instruments. through the option repurchase). This Venue provides the necessary liquidity 4. Final provisions thanks to the presence of several market For those financial instruments which cannot makers. The Clearing House and Guarantee be classified in any of the Asset Classes listed Fund (GCC) which operates as the central above, the Bank will ask the customer for specif- counterparty guarantees settlement of all ic instructions concerning the Execution Venue transactions carried out therein. of the order. Should the Bank, due to holidays Orders concerning financial instruments identi- or special events affecting the Execution Venue fied by the Bank and listed in a special section selected or any technical problem, not be able to of the reserved area of its website, for which the execute the order upon its receipt in accordance same Bank, in the Systematic Internaliser capaci- with the requirements of this Execution Policy, ty, publishes ask and bid prices, equal to the best said order may be placed on a different Venue time for time offered by the Market of reference, provided the interest of the customer is pursued can be executed by the Bank, as a direct coun- in terms of price, costs, speed of execution, like- terparty of the customer, outside of the regulated lihood of execution and settlement. Should the market. alternative Execution Venue also not be availa- In any case, the Bank reserves the right to up- ble, the Bank will need to receive the custom- date its price quotations at any time and to with- er’s instructions. If an order is received outside draw them in the event of exceptional market the chosen Venue’s trading hours, the order will conditions (eg suspension of the security from be sent to the Venue on the next trading day. trading on the Market of reference). The Bank Should the customer wish to place an order on decides on the quantity of its price quotations. In the same day, he will have to indicate a Execu- order to guarantee the settlement of transactions tion Venue, among those on which the Bank can concluded within the Systematic Internaliser ca- operate, to which the Bank can still transmit the pacity, the Bank provides an adequate guaran- order. FinecoBank will not transfer to another tee to protect the investor by depositing financial Venue all those orders which have already been instruments with third-party intermediaries. transmitted to the Execution Venue (other than 3.9.2 Other Foreign regulated derivatives the Bank itself) but have not yet been executed. Orders related to foreign regulated derivatives, The Bank will inform the customer within the first traded on the basis of standardised contracts, working day following the execution of the order. are directly executed on the foreign reference The Bank is obliged to inform the customer in markets (if the Bank adheres to that market) or respect of the non-executed order only at said through an intermediary. These Venues provide customer’s request. both the necessary liquidity thanks to the pres- The application of the Execution Policy is essen- ence of several market makers and a guarantee tially based on computer systems; in case of tem- of transaction settlement by virtue of the pres- porary unavailability of the systems, the Bank will ence of clearing houses. select the Execution Venue at its own discretion Orders concerning financial instruments identi- with the intent of pursuing the customer’s inter- fied by the Bank and listed in a special section ests. This Execution Policy is subject to periodic of the reserved area of its website, for which the reviews - at least once a year - and in any case same Bank, in the Systematic Internaliser capaci- should any events occur which may concretely ty, publishes ask and bid prices, equal to the best affect FinecoBank’s ability to obtain the best pos-

37 sible result for the customer. If necessary there- ExtraMOT (limited to the type of instruments fore, it may be varied. Any significant change mentioned below) will be immediately communicated to customers • Corporate Bonds through appropriate means. The updated ver- • Bank Bonds sion of the FinecoBank Execution Policy is available on the www.finecobank.com website. Hi MTF (limited to the type of instruments men- The Bank summarise and make public on its tioned below) website on an annual basis, for each class of fi- • Government securities nancial instruments: • Supranational Bonds - the top five execution venues in terms of • Sovereign Bonds trading volumes where they executed client • Corporate Bonds orders in the preceding year; and • Step Up Bonds - information on the quality of execution ob- • Bank Bonds tained. • Emerging Market Bonds The Bank, in relation to its Systematic Internal- • Structured bonds iser activity, makes available to the public on its 5.2 Intermediaries website on a quarterly basis, data relating to the • Equity instruments quality of execution of transactions on that ven- - KCG ue; periodic reports include details about price, - Pershing costs, speed and likelihood of execution for indi- - Goldman Sachs vidual financial instruments. - Cortal Consors - Deutsche Bank 5. Attachment 1 - Cai Cheuvreux 5.1 Regulated Markets, MTFs and OTFs intercon- - Mandatum nected - Glitnir Domestic UK Markets - Bnp Paribas • London Stock Exchange - SETS cash markets - Credit Suisse Foreign markets - Merrill Lynch • Borsa Italiana - cash markets - Bear Stearns a. MTA - Blue Chip - Nomura b. MTAStar MTA - Standard 1 - NBG c. MTA - Standard 2 MTA - Expandi 1 - State Street d. MTA - Expandi 2 e. MTA - Afterhours • Debt instruments f. SEDEX - HSBC g. SEDEX Afterhours - UBS h. MOT/EuroMOT - Barclays • Deutsche Boerse - Xetra cash markets - ABN AMRO • Deutsche Boerse - Eurex derivatives - BNP Paribas • Nyse-EuronextAmsterdam - Eurolist cash - CSFB markets - Deutsche Bank • Nyse-Euronext Paris - Eurolist cash markets - Dresdner Bank • Nyse-Euronext Paris - Matif derivatives - Goldman Sachs • Nyse-Euronext Lisboa - Eurolist cash markets - ING • OMX Stock Exchange - Nordic list cash mar- - JP Morgan kets - Kredietbank LUX • SIX Swiss Exchange - SIX cash markets - Merrill-Lynch • Bolsa de Madrid - Sibe cash markets - Nomura • Equiduct Börse Berlin - cash markets - Rabobank • IDEM - Italian Derivatives - RBC • EUREX - EU Derivatives - Citigroup • CME - USA Derivatives - Toronto Dominion • Bloomberg Multilateral Trading Facility • Derivatives • Tradeweb Europe Limited MTF - JP Morgan • Tradeweb EU B.V. - • MTS S.P.A. - Bond Vision Europe 5.3 Categories of financial instruments • Similar shares and titles EuroTLX (limited to the type of instruments men- - Domestic tioned below) - Foreign • Government securities • Rights of option and warrants • Supranational Bonds • Bond bonds • Sovereign Bonds - Italian Government bonds • Corporate Bonds - Other debt securities listed on the MOT • Step Up Bonds and EuroTLX • Bank Bonds - Non-listed bonds on the MOT • Emerging Market Bonds • Covered warrants listed at Sedex • Structured bonds • Covered warants listed in other countries • Certificates • certificates • Repo and loan securities

38 • Derivative Financial Instruments volved in the provision of the Services. - regulated domestic derivatives-regulat- The Bank, has adopted a Remuneration Policy, ap- ed derivatives proved by the Board of directors and the Sharehold- - Foreign ers’ Meeting,which establishes principles to ensure - Derivatives OTC that the incentive mechanisms for staff are not contrary to the best interest of clients. In addition, the formation of a specific company re- Annex II sponsible for Asset Management meets the need to MANAGING CONFLICTS OF INTEREST POLICY - further improve the separation of functions between SUMMARY the production and distribution of the managed sav- By way of summary, the FinecoBank Group (the ings products. “Group”) provides a wide range of investment services As a further organizational measure to handle conflicts and ancillary services to its customers (the “Services”). of interest, the Compliance department which provides This situation, together with the many activities carried independent guidelines and control – has been given out by the Group which include, the provision of credit, the task of identifying and defining the methods with placing financial instruments and asset management which to manage potential conflicts of interest within activities, increases the possibility of conflicts between the Group. the interests of the Bank and the interests of the Bank’s The Group have adopted a Code of Conduct, which customers. sets out the legal and ethical standards that the Bank In compliance with the conflicts of interest provisions follows in order to protect the interests of customers, in MiFID FinecoBank SpA (“Fineco”) holding company mitigate risks, comply with the rules of financial regu- of the Group: lators, ensure market transparency, and to safeguard 1. has identified, with reference to the investment confidential information. services and activities and ancillary services The Bank has adopted specific policies and processes provided by the Group, the circumstances that for the provision of services including: generate or could generate a conflict of interest • a process aimed at ensuring consistency with that could adversely affect the interests of one or external and internal regulation of products, ser- more customers; vices and commercial initiatives offered to the 2. defined appropriate measures to identify and Bank’s customers, after an assessment of the prevent or manage such conflicts of interest; and operational impact, overall risk and reputational 3. established an appropriate system for register- implications; ing conflicts of interests. • a Product Governance policy considering the The main activities and interventions put in place best interests of customers at all stages of the by the Group are summarized below for each of the product life cycle, both when the Bank operates points indicated above. as a producer and when the Bank distributes In order to identify, prevent or manage conflicts of in- third party products; terest, a series of organizational measures have been • a Pricing Policy aimed at establishing the criteria establised including the: for determining the prices of the services and • establishment of organizational barriers between products; the Group companies and the Group’s divisions • a Execution / Transmission Policy aimed at in- even within the same company; forming customers on the choices made by the • implementation of internal procedures to regu- Bank on the methods of trading the various finan- late the processes for the performance of certain cial instruments; potentially conflicting investment services so as • a authorization process for Outside Business to avoid potential negative effects for customers; Interests aimed at identifying and managing • establishment of hierarchical barriers (separate personal intersections of employees that could management of structures that perform conflict- conflict with the interests of the Bank and / or its ing activities) and segregation of functions. In the management of the various types of potential customers; and conflicts of interest particular importance has • procedures for assessing the compliance of the been attributed to the procedures and measures incentives received by the Bank in providing in- aimed at ensuring that the interests of clients will vestment services. not be damaged; In cases where the measures taken to manage con- • establishment of informational barriers and in- flicts of interest are not considered sufficient to ensure, ternal procedures aimed at preventing or con- with reasonable certainty, that the risk of harming the trolling the exchange of information which might interests of customers is avoided, the Bank: conflict with our clients’ interests. • may decide not to provide the service; or The Group and the Bank have adopted an organiza- • may, where permitted under MiFID inform the cli- tional model based on a structure that includes com- ent of the nature of the conflict and the measures panies specializing in different businesses and, more- that will be taken to mitigate the conflict so that over, business segments specialized on a specific type the customer can make an informed decision of customer. about whether to proceed. This approach is reflected both in the hierarchical inde- The Bank has also allowed for the keeping of a register pendence of each manager who takes decisions with- of situations where a conflict of interests arose or could in predetermined parameters, and in a managerial and arise, with the risk of a negative impact on the interests informative separation of the various companies and / of one or more clients. or divisions of the Group, thus protecting the faculty to At the customer’s request, the Bank will be able to pro- assume the autonomous decisions by the parties in- vide more details about this conflict of interest policy.

39 Annex III UNDERSTANDING FINANCIAL INSTRUMENTS AND Any other, different type of communication or re- ASSOCIATED RISKS quest for information may be sent to the following e-mail address: [email protected]. A. Information about the Bank and the investment You can also contact: services it offers. Client Service, which can be reached at the fol- A.1 Corporate data about the Bank Tradename: lowing numbers and at the following times: free- FinecoBank S.p.A. Legal form: Joint Stock Com- phone number 0800 640 66 67 for calls from pany Registered office: Piazza Durante, 11, Milan UK, or +44 20 706 57 557 from abroad. General Management: Via Rivoluzione d’Otto- Operator service bre, 16, Reggio Emilia From Monday to Friday, from 08:00 to 21:00 Entry in Milan Companies Register and Tax Code hours. 01392970404; VAT reg. 12962340159; ABI [Ital- Operator service to block cards and to block ian Banking Association] 03015.5 codes:365 days per year 24h/24 The Bank is entered in the Banking Register kept If you are not a client of the Bank please call by the Bank of Italy (www.bancaditalia.it) (regis- the free- phone number 0800 640 6465, from tered office is at Via Nazionale 91, Rome – CAP Monday to Friday, postcode 00184 – tel. +39 06 47921) and is the from 08:00 to 21:00 hours Parent Company of the FinecoBank Banking A.3 Complaints. Group – registered in the Register of Banking Any complaints may be sent to the Complaints Groups (referred to also as the “Group”). The Office at FinecoBank S.p.A., at Piazza Durante, Bank is authorised by the Bank of Italy (Via Na- no. 11, 20131 (MI), fax no. 02.303482643, com- zionale, 91, Rome 00184) to provide investment [email protected] or at the certified e-mail services (authorisation no. 039839 of 13 Decem- address [email protected]. ber 1999). Complaints are handled by the Complaints A.2 Communications between the Client and the Department. The Bank has adopted suitable Bank You may communicate with the Bank in procedures to ensure the required handling of English. The Bank will communicate with you in complaints made by clients. The procedure for English. The forms of communication between handling complaints is completed, as a rule, with- you and Fineco, in relation to the provision of in a maximum of 60 days following the receipt individual investment services, are regulated of the complaint. The Bank allows for a process in the particular contracts. The information that in which several structures take part, in order to regulates that aspect, in general, appears be- ensure a clear examination of the issues which low. FinecoBank is a direct bank which offers emerge from the complaint. The response to the its own services through remote communication complaint is sent in good time and, at any rate techniques (e.g. the Internet and telephone). and according to the policy, within the above Therefore, the types of communication with deadlines, by the same means as used to send you prioritise telematics channels (the Internet, the complaint. If you are not satisfied with how e-mail, GSM systems and landline). For this rea- your complaint was handled by the Bank, you son, when they start relations with the Bank cli- can refer your complaint to Financial Ombuds- ents should give their consent to the use of such man Service in accordance with clause 22. means of remote communication and provide A.4 Investment services offered an e-mail address as evidence that they have FinecoBank has been authorised by the Bank of regular access to the Internet. As for the ways Italy to carry out the investments services and of sending your orders to the Bank about the in- activities described in brief below: vestment services and the financial instruments • Execution of orders on your behalf (including and products, we wish to point out as follows: through negotiations conducted on its own 1. Your orders about financial instruments and any behalf): the service consists in the receipt of orders to cancel may be given to the Bank by your orders geared to financial instruments telephone, via Customer Services; and their execution in a trading venue to • by computer or GSM cellphone connected to which the Bank has direct access. The ways the Internet; of performing the service and the trading • by accessing the bank’s website www.fine- venue where they are carried out appear in cobank.com for connections via the GSM the Execution Policy available on the Bank’s system or through other telematics systems website and a copy is included with these made available by the Bank. Terms of Business. Sometimes FinecoBank 2. If the orders are given by telephone, you ac- negotiates on its own behalf and acts as a di- knowledge that they will be recorded on mag- rect counterparty of the clients when execut- netic tape or another, similar back-up. ing their orders; for example, that happens in 3. In order to send orders using telematics, you will the following cases: need to have devices and programs which meet • the trading of financial instruments listed by the technical specifications established by the FinecoBank when acting as a Systematic In- Bank and published on the internet site. ternaliser (selection of securities such as, for 4. Once sent, your orders can only be withdrawn if example, shares, futures and Contracts for still not acted on. The ways of executing them (or Financial Differences - CFD); of sending them to another broker for execution) • the trading of securities not listed on the are identical, regardless of the channel which regulated markets or on Multilateral Trading you choose to send the orders. Facilities (MTF) (bond issues and certificates

40 and repurchase agreements); first working day after the execution of the or- • trading in OTC derivatives other than CFD der or after the Bank received confirmation from handled as a Systematic Internaliser. the broker to which the execution of the order • Collection and sending of orders: the service was sent, provides you with a written notice of consists of the receipt of your orders geared confirmation. This will contain the name of the to financial instruments and their sending to Bank which sent the communication, the name a dealer qualified to trade on its own account or other means of identifying the client, the infor- and/or execute orders on the behalf of cli- mation used to identify the executed transaction ents. That occurs when the Bank does not – such as, for example, the day and time of the have direct access to the venue where the execution, the type of order, the identification of order is executed. The trading brokers to the place of execution, the identification of the which the Bank may resort in that case ap- instrument, an indication if it is a purchase/sale pear in the Execution Policy available on the or a different transaction, the quantity, price per Bank’s website and a copy is included with unit, total sum of commissions and costs and these Terms of Business. the information if your counterparty is the Bank, • The services for the execution of orders on another broker in the Group or another client of the clients’ behalf and the collection and the Bank (except where the order is executed sending of orders are defined henceforth as through a system which produces an anonymous an “Execution”. negotiation). • Placement and distribution (referred to In the case of a transaction where the financial henceforth as “Placement”): the Bank car- instrument involves a settlement in a curren- ries out the service for the placement of fi- cy different than the settlement account, the nancial instruments and investment services above-mentioned notice is sent by the first work- and distributes financial products on the au- ing day after the fixing of the exchange rate. As thority of Group companies and third compa- a rule, that will be the day after the conclusion of nies. The services consist of the presentation the transaction, subject to any adjustments due and proposal of products, services and finan- to any public holidays on the exchange market. cial instruments. Those companies prepare The notice of confirmation can be found in the the relevant contractual documents. In addi- area reserved for you on the Bank’s website and tion, for transactions on the primary market can be printed. the Bank also acts as a placer (without an In the case of orders for quotas or shares issued irrevocable commitment, on the authority of by collective savings investment organisations, the issuers or other primary placers). the information is given directly by the asset • Supplementary Services: these are services management companies ICVCs at the frequen- off cy envisaged by the legislation and regulations • in connection with the provision of the adopted by the companies. On your request, it above-mentioned investment services; in provides it with information about the status of its particular: order and the make-up of the commissions and • safekeeping and administration of financial costs mentioned in the previous point, broken instruments on the clients’ behalf and related down into individual items. management services to manage ready cash 3. The Bank will notify you within one business and collateral guarantees; day if you have position in leveraged financial • brokerage in exchange, connected to the instruments or contingent liability transactions provision of investment services in ex- in your Account where the initial value of each change. instrument depreciates by 10% and thereafter at multiples of 10%. • In particular, the following are prominent 4. Provides you, at quarterly intervals (on 31 March, amongst the supplementary services: 30 June, 30 September or 31 December each • “Interest-bearing portfolio” service: service year), a statement of the financial instruments which allows the client to obtain a reward in and available funds held by the Bank, with an exchange for the transfer on loan to the Bank itemisation of them at the end of the period cov- of securities present in its securities deposit. ered by the statement; the statement is made The characteristics of the securities loan trans- available in electronic format in a special re- action and the associated risks are set out in served area on the Bank’s website and can be the paragraph D1.5.1 “Securities Lending”. printed. You can ask for a hard copy to be sent to A.5 Documents provided to the investor and state- your address. All transactions in regulated secu- ment on the activity carried out rities and derivatives feature in a daily statement, The Bank: through a consultation instrument available in a 1. when it receives an order, issues a certification to special area reserved on the Bank’s website. The you containing – amongst other things – not only information provided can be printed. the data which identify the order but also warn- 5. Provides you, at monthly intervals: - with details of ings from the Bank about conflicts of interest the the proceeds which matured for you on securities inadequacy / inappropriate nature of the trans- lending transactions concluded as part of the so- action associated with the order and bonuses. In called “Interest-bearing prtfolio” service. That in- the case of orders received over the internet and formation is made available in a special reserved via the call center, the certification can be found area on the Bank’s website and can be printed. in the area reserved for you on the Bank’s web- 6. La The Bank also provides, on a yearly basis, a site and can be printed. personalized annual disclosure regarding the 2. As soon as possible and, at the latest, by the costs and charges incurred with regard to finan-

41 cial instruments, investment services and ancil- accordance with the current regulation. lary services. The entity with which the securities are sub-de- A.6 Information about the indemnity or guarantee posited is Société Genéralé Securities Servic- systems es S.p.A., which can be abbreviated to “SGSS The Bank belongs to the Interbank Fund for S.p.A.”. Its registered offi is in Milan and it is the Protection of Deposits, covered by the Di- entered in the Banks Register kept by the Bank rective 94/19/EC of 30 May 1994. The Fund is a of Italy under number 5622. The latter has au- compulsory consortium regulated by private law thorised further sub-deposits. Italian securities and recognised by the Bank of Italy. Its activity is are deposited with Monte Titoli S.p.A. The Bank governed by the Statute and by the Regulation. informs you of any change of sub-custodian in The Fund serves to guarantee depositors of the a specifi notice or in a periodic statement given consortium banks which undertake to provide to it. You may allocate part or all of the rights the firesources needed to serve the Fund’s pur- inherent in the sub-deposited securities to oth- pose. The maximum limit of cover per depositor er depositors or may ask for the delivery of an is 100,000 euros. equivalent amount of securities of the same type The Bank belongs to the National Guarantee as those sub-deposited, in the forms envisaged Fund recognised as a compensation system re- by the central securities depository. ferred to in art. 62 of the Legislative Decree no. The Bank is also authorised to sub-deposit the 415 of 23 July 1996 transposing Directive 93/22/ securities with other centralised deposit agencies other than the central securities deposito- EC. The Fund indemnifies investors, within the ries who, however, will be allowed to carry out limits of the amounts and under the conditions custody and central securities depository. In turn, envisaged in the Fund’s Operating Regulation, if necessary, those agencies may entrust the ac- with credit, represented by financial instruments tual custody to third parties. and/or money linked to investment transactions, If the securities mentioned in the above para- in relation to brokers who belong to the Fund, as graph have characteristics of fungibility or, when defined by the above Regulation and arising from otherwise possible, the Bank – without prejudice the provision of the main investment services. to your responsibility to ensure the regular na- A.7 Policy to handle conflicts of interest ture of the securities – is also authorised to allow The policies to manage conflicts of interest them to be grouped together by those organisa- adopted by the Bank are set out in the document tions and you agree to receive instead other se- “Managing Conflicts of Interest Policy”, which is curities of the same type and in the same quan- enclosed with this document and is delivered tity. In such cases, the sub-deposit is made on with it, thereby forming an integral part. The doc- “omnibus” accounts, held in the Bank’s name on ument may be consulted on the Bank’s website behalf of third parties. Only financial instruments at www.finecobank.com. are allowed to enter which belong to multiple cli- The Bank also provides – within the scope of the ents and so your name is not given. However, the services for the Placement and distribution of “omnibus” accounts are always separated from financial instruments and financial banking prod- the accounts for the financial instruments which ucts - information about any conflicts of interest belong to the Bank. regarding the financial instrument or product For securities issued or circulating abroad, the which figures in the instruction. Bank is authorised to be replaced, in transac- A.8 Policy for the sending and execution of the or- tions in relation to the service for the safekeep- ders ing and administration of securities, by foreign An analysis of the Bank’s policies for the han- sub-custodian companies established for that dling of orders connected to the provision of in- purpose. Consequently, it deposits the securi- vestment services can be found in the “Execution ties with them. The service is conducted in the Policy” section prepared by the Bank. It has been form envisaged by those foreign sub-custodian enclosed with this document and is delivered to companies. Only in cases where the nature of clients as an attachment to the Agreement. the financial instruments or the services or ac- The document may also be consulted on the tivities of investment connected to them means Bank’s website at www.finecobank.com. that they have to be deposited with a particular subject may the Bank deposit or sub-deposit B Information about the safekeeping of the clients’ your assets with subjects established in Coun- financial instruments and sums of money tries whose systems do not have regulations B.1 Information about sub-deposits and the Bank’s and forms of supervision over subjects involved responsibility in the safekeeping and administration of finan- As part of the provisions for the securities account cial instruments and so segregatation of those and financial instruments for safekeeping and ad- assets is not guaranteed. ministration, the Bank is expressly authorised by As for the securities which are sub-deposited, you to sub-deposit the securities andfinancial in- the Bank remains responsible vis-a-vis you. struments (referred to henceforth as “securities”), B.2 Information about preferential claims and including via another broker who has joined the rights to compensation central securities depository in accordance and LEGAL PRIVILEGE: for the purposes of art. 80 and ff. of the Legislative The Contract with you envisages that: Decree no. 58 of 24 February 1998 (Consolidated - if you do not meet its obligations in time and Law on Finance) and the regulation to implement in full, the Bank will warn you about payment it, as well as with any other custodians qualifi in and, if you stay in arrears, the Bank may pro-

42 ceed to exercise its right to compensation satisfied after the claims of the other stakeholders or may proceed to sell – directly or through (subordination). All shares in a company have the another authorised broker – an adequate same nominal value and all those which belong to quantity of financial instruments it holds; the same category give the holders equal rights. - before realising the securities, the Bank in- Our system recognises different types of shares, forms you in a letter sent by recorded deliv- differentiated according to: ery of its proposal and will give you a further (a) the rights they give. Each type of share gives deadline of 10 days; the holder different specific rights: adminis- - the Bank is content with the net proceeds of trative (voting right, right to contest the reso- the sale and the remainder is available to you. lutions of the shareholders’ meeting, right of LEGAL AND VOLUNTARY COMPENSATION: withdrawal, preemptive right) and econom- The Contract contains the rules for legal and ic-patrimonial (right to the dividend, right to voluntary compensation between you and the reimbursement). The shares are differentiat- Bank, in cases where there are several relations ed, for example, between: in place or several accounts, of any type or na- - ordinary: type of share which does not ture, including deposit accounts. give the holder any privilege in terms of B.3 Information about the Bank’s use of the Cli- the distribution of dividends or the distri- ent’s financial instruments bution of assets during the winding-up of The Bank, as part of the services called the “In- the company (subordination); terest-bearing portfolio”, may use the financial - Savings: type of share without a voting instruments held on your behalf. The nature of right but which enjoys patrimonial privi- those services, the obligations and the responsi- leges compared to ordinary shares (pre- bilities which the Bank accepts to provide them, dating); the conditions for return and the associated risks - preferential: type of shares which gives are summarised in paragraphs A.4 - “Investment its holders a right of preference com- services offered” – and D1.5.1 - “Securities Lend- pared to the ordinary shareholders ing” – and illustrated in detail in the rules which during the distribution of profits and the regulate those services, contained in the Gener- reimbursement of the capital if the com- al Conditions of the contract and available on the pany is wound up but which involve the Bank’s website. limitation of some or all administrative rights (right to vote, right to contest the C Information about the financial instruments resolutions of the shareholders’ meeting, and products right of withdrawal, pre-emptive right). C.1 Types of financial instruments and products (b) legal regime of circulation. The shares may handled be registered or to-bearer. The former sup- The Bank makes available to its clients, in the con- poses the compulsory registration of all the text of the investment services, the following types share holdings. An exception is made for of financial products and instruments. Please see savings shares, which may be issued to the the following paragraphs for a description in terms bearer. To-bearer shares are transferred with of their nature and risk. Depending on the com- the mere delivery of the security, whereas a mercial choices which the Bank may make, from registered share may be transferred through time to time, some of the types of product listed authentication by a notary or another subject, below may not be available: according to the provisions of special laws. - Securities which represent the risk capital; As for shares and financial instruments traded - Debt instruments; or destined for trading on the regulated mar- - Derivatives; kets, the transfer may proceed through the - Quotas and shares of collective investment entry in accounts geared to record the move- schemes (mutual funds and ICVCs); ments of the financial instruments. In that - Other products handled by the Bank (includ- case, if the shares are registered, entry into ing Securities lending). the account will be equivalent to a transfer. The risks associated with that type of instrument C1.1. Securities representing the risk capital are the price risk and the risk of the issuer’s in- The most common security representing the risk solvency (for a detailed description of the risks, capital is the share. It is the minimum unit of par- please see paragraph C3 - “Main risks associat- ticipation in the share capital of a joint stock com- ed with the investment in financial instruments pany. A shareholder becomes, for all purposes, a and products”). member of the company which issued the security on the market. It participates (unless the articles C1.2. Debt instruments of association provide to the contrary), along with A debt instrument is a debt for the issuer and a the other members and in proportion to the num- credit for the subject who acquires it. Compa- ber of shares held, in the issuer’s economic risk. nies issue debt instruments mostly for collection Any remuneration connected to the possession purposes: in that case, the issuer (debtor) gains of an equity instrument is based on the econom- resources which it returns on a particular expiry ic progress of the company which issued it and date and for which it pays interest (fixed or vari- depends on the decision of the shareholders’ able, periodic or just at-term); the investor (cred- meeting to distribute part or all of the profits. If the itor) pays a sum which it will regain at-term and issuing company becomes bankrupt, the share- receives the interest in the agreed form. Each holder will be remunerated on a residual basis. In security represents a fraction of equal nominal other words, the shareholders’ claims will only be value and with equal rights as a single financing

43 transaction. are the interest risk, the credit spread risk and The characteristic features of a debt instrument the issuer insolvency risk. However, the credit are: risk for these instruments is generally modest - nominal interest rate, which may be: (for a detailed description of the risks, refer to - fixed, if calculated according to a pre-fixed paragraph C3 - “Main risks associated with in- return which does not change during the du- vestment in financial instruments and products”). ration of the loan. C1.2.3. Corporate bonds - variable, if a variable return over time is en- Bonds are among the most common debt instru- visaged. The amount is fixed periodically ments. Corporate bonds are those in which the by referring to financial or real parameters issuer, or the debtor, is represented by a company specified at the time of issue (e.g. Euribor) regulated by private law (e.g. banks and industrial or linked to the value of an Underlying Asset companies). They may be distinguished as: (shares, index, basket); a) Senior bonds - If the issuer is not able to pay - mixed, in other words the combination of a the interest or repay the capital, the bearer fixed and variable component. of the bonds may be satisfied in the same - duration; way as envisaged for the issuer’s other unse- - form of paying the interest (coupon or zero cured and non-preferential creditors. Senior coupon); bonds vary between: - form of reimbursement, which may be ordi- - Ordinary (plain vanilla): bonds which give nary (one-off reimbursement on the expiry a right to receive, in pre-fixed forms, date or gradual reimbursement on fixed ex- the interest and, on the expiry date, the piry dates) or extraordinary (early reimburse- repayment of the capital equal to the ment or re-purchase on the market); nominal value. There is no derivative - reimbursement price, which may be fixed or component. var iable. - Structured bonds: bonds broken down The coupon, which is periodic and at pre-fixed into a traditional bond, which gives a expiry dates, is one of the most common means right to receive, on the expiry date, the by which issuers pay interest to the investor. repayment of the capital equal to the However, securities without a coupon also exist, nominal value (and an eventual minimum as so-called zero coupons, where the interest is return), and a derivative which allows the paid on the expiry date, with the return of the in- subscriber to receive a random return vested capital, plus the interest which matured linked to the trend in one or more of the during the life of the security. Underlying Assets (e.g. shares and share, The issuer has considerable freedom when fixing merchandise and currency indexes). the content of those characteristic features and to - Convertible bonds: bonds which may be include in the debt instrument some optional fea- converted, at the option of the investor tures typical of derivative agreements. Depending and at pre- fixed times, into shares (soon the legal entity which issues them, we may called “converted shares”) of the compa- distinguish between government bonds, suprana- ny which issued the bonds or of a third tional debt instruments and corporate bonds. company. After the conversion, the inves- C1.2.1. Government Bonds tor ceases to be the creditor of the sub- Government Bonds are financial instruments is- ject who issued the bonds and acquires sued by national governments, either in euros or the patrimonial and administrative rights in a different currency than the euro, which allow due to the shareholders of the company for, as a rule, the reimbursement of the nominal which issued the converted shares. value on the expiry date and a coupon-type or b) Subordinate bonds which, in the event zero coupon return. For instance, gilts are UK of the liquidation of the issuer, are repaid government Sterling denominated bonds issued through capital and interest only after all by HM Treasury. The term gilt (or gilt-edged) is a the issuer’s other, not equally subordinate, reference to the primary characteristic of gilts as creditors have been satisfied. In any case, an investment - their security. such bonds will be repaid ahead of the issu- The risks associated with this type of instrument er’s shares and the other capital instruments are the interest risk, the credit spread risk and characterised by a greater degree of sub- the issuer insolvency risk, or the sovereign risk ordination. in the case of public debt instruments (for a de- In particular, if the issuer is a bank, the bonds tailed description of the risks, refer to paragraph are distinguished between: C3 - “Main risks associated with investment in - “Upper TIER II” subordinate bonds; financial instruments and products”). - “Lower TIER II” subordinate bonds; C1.2.2. Supranational debt instruments - “TIER III” subordinate bonds. Supranational debt instruments are bonds issued We will summarise some of the characteris- by international institutions (e.g. the European tics of subordinate bonds issued by banks. Investment Bank), who collect funds to finance “Upper TIER II” subordinate bonds are irre- government projects and projects of private en- deemable or redeemable bonds (non-repay- terprises in various parts of the world; they may able and repayable, respectively), with an be nominated in strong currencies (pound ster- expiry date equal to or greater than 10 years. ling, the euro, US dollar, etc.) or in currencies of They are characterised by clauses which: emerging countries. - Make the repayment on the expiry date The risks associated with this type of instruments of the bonds dependent on the prior au-

44 thorisation of the Bank of Italy; and credit to public authorities) and the issue by - Allow for the ability to suspend the right a bank, who need not be the assignor, of bonds to remuneration to the degee necessary guaranteed by the vehicle company, to be en- to avoid or restrict as much as possible forced on the assets gained and formed as sep- the emergence of losses, if there are arate assets. negative trends in the operating result The risks associated with this type of instrument (so-called interest deferral option); are the interest risk, the credit spread risk and - Make it possible for the issuer to use cap- the issuer insolvency risk. For these securities, ital and interest to cover negative operat- the credit risk is mitigated by the fact that the ing results, in the event of losses in the guarantee of the securitised credit portfolio op- balance sheet which cause a reduction erates in conjunction with that of the issuer (for a in the paid-up capital and the reserves detailed description of the risks, see paragraph below the minimum level of capital en- D3 - “Main risks associated with investment in visaged for authorisation for the banking financial instruments and products”). activity (so-called loss absorption clause). C1.3. Derivatives That is to enable the issuer to continue Derivatives are financial instruments whose val- to operate. ue depends on the trend in an underlying, which “Lower TIER II” subordinate bonds are bonds can vary in nature: it may be financial (equity se- with a duration of 5 or more years (if the expiry curities, indexes, interest and exchange rates) or date is not fixed, prior notice of repayment of at real (tobacco, coffee, cocoa, oil or gold). least 5 years is anticipated). There may be claus- Derivatives may be: es for early repayment, which can occur only on - Transferable securities; the issuer’s initiative, after authorisation from the - Contracts. Bank of Italy. “TIER II” subordinate bonds may The risks associated with derivatives are mainly allow for clauses which provide an automatic those linked to the Underlying Assets or, poten- review of the remuneration rate, connected to tially, the whole range of financial risks. In order the early repayment option (so-called step-up), to correctly fix the associated risks, it is impor- provided they can be exercised no earlier than tant to be aware of the specific characteristics in the 5th year of the loan and the sum of the of each derivative. Below we illustrate the main step-up does not exceed, alternatively, 100 basis categories of derivatives handled by the Bank. points or 50 per cent of the spread compared Detailed information about the forms of opera- to the reference base, net of the differential be- tion used by the Bank to develop the trading of tween the initial reference base and that used to derivatives is found in the Help section dedicat- calculate the increased rate. ed to Trading on the website www.finecobank. “TIER III” subordinate bonds are bonds with a com. duration of equal to or longer than 2 years (if the C1.3.1.Derivatives represented by “transferable se- expiry date is not fixed, early notice of repayment curities” of at least 2 years is envisaged), subject to the This category includes warrants, Exchange Trad- so- called “lock-in clause”, by which the capital ed Commodities (ETC) and securitised deriva- and the interest cannot be repaid if the repay- tives. ment reduces the overall amount of the issuer’s The warrant is a derivative very similar to an op- patrimonial funds to a level below 100% of the tion. It gives the holder an option to buy (warrant overall capital requirements. call) or sell (warrant put), to be exercised on (or The risks associated with this sort of instrument by) a certain expiry date (if of the European or are the interest risk, the credit spread risk and American type) on a particular Underlying Asset the issuer insolvency risk. Generally speaking, and at a pre-fixed price. The warrant (call type) is the latter are linked to the Rating given to the used, in particular, by companies to make its own issuer (cf. paragraph C4 - Classification criteria bonds more appealing (bonds cum warrant) or to adopted by the Bank and risk indicators). gather fresh resources via capital increases. Apart from the above risks, convertible bonds The warrant is an instrument which can circulate are also subject to the price risk of the convert- separately from the main security. ed share. Apart from the risks of the traditional ETCs are derivatives issued in light of the issu- bond, structured bonds suffer from the sort of er’s direct investment in commodities and in risk(s) associated with the derivative included in contracts, including derivatives on commodities. the bond. Apart from the risks of the traditional The value of the ETCs is linked to the course of bond, subordinate bonds are prone to the risk the prices of the assets which figure in the invest- associated with the type of subordination (for a ment or to the value of the basket indexes for detailed description of the risks, see paragraph those assets. The price of the ETCs is therefore C3 - “Main risks associated with investment in tied directly or indirectly to the trend in the Un- financial instruments and products”). derlying Asset. C1.2.4. Covered bond (or guaranteed bonds) In practice, the ETCs are securities without an The Covered bond is a bank bond with a modest expiry date issued by a Special Purpose Vehicle risk profile, as it is guaranteed by assets geared, (SPV) in light of a direct investment in a raw ma- if the issuer becomes insolvent, to the prioritised terial or in contracts on commodities concluded satisfaction of the rights of the bond holders and by the issuer with international operators with a high liquidity. The operating scheme envisages high standing. The range of commodities repli- the transfer by a bank to a vehicle company of cated by the ETCs is particularly broad and is not assets with a high credit quality (mortgage credit restricted to individual raw materials. It extends

45 to their indexes and sub-indexes. the certificates into 4 macro-classes: instru- That enables the saver to count on the positive ments with protected / guaranteed protection, trend in an individual raw material or to diversify instruments with conditionally protected capital, the investment through a basket of commodities. instruments with unprotected capital and lever- The assets gained by the issuer with the pro- aged instruments. The certificates described in ceeds derived from the subscription of the ETCs numbers 1), 2) and form separate capital for all purposes from SPV 3) are commonly called “Investment Certificates” and from that of any other issuers. (without a leverage effect). Moreover, the assets gained with the proceeds The certificates mentioned in number 4) are derived from the subscriptions, as well as the pro- commonly called “Leverage Certificates” (with a ceeds generated by the same assets, are geared leverage effect). exclusively to the satisfaction of the rights includ- 1) Protected / guaranteed capital certificates ed in the financial instruments in question and These are instruments which focus on a rise eventually to cover the operating costs. (or fall) in the Underlying Asset. The invested Shares from creditors other than the holders of capital is protected from falls (rises). The level the ETCs are not included in the assets in the of protection is defined when the product is separate capital. issued, in order to offer total protection for In summary, the ETCs: the invested capital (100%) or partial protec- - are traded on the Exchange, just like shares; tion (e.g. 90%, 80% or below). - replicate, in a passive way, the performance 2) Conditionally protected / guaranteed capital of the raw material or the raw material index- certificates es to which they refer. These are instruments which focus on a rise Securitised derivatives may only be issued by in the Underlying Asset while, at the same a financial broker by companies or entities with time, protecting the invested capital (but only particular capital or supervisory requisites or by if the Underlying Asset does not reach the counties and international agencies. protection barrier). For some types of cer- To avoid situations of conflicts of interest, the is- tificates, they allow earnings, if the falls are suìer of a securitised derivative must not be the modest. same as the issuer of the Underlying Asset. 3) Unprotected / non-guaranteed certificates At the moment, securitised derivatives are These products allow bearers to invest in sub-divided into two categories of instruments: a particular Underlying Asset and expose covered warrants and certificates. themselves to its performance, either to Both may have as underlying shares and Gov- a rise or a fall, to a proportionate or even ernment Bonds with high liquidity, indexes, inter- disproportionate degree. The Underlying est rates, currencies and commodities. Assets for these certificates are usually in- Covered warrants are financial instruments dif- dexes, commodities, baskets and, more gen- ferent from warrants which give the holder the erally speaking, Underlying Assets not easily option of buying and/or selling, on (or by the) ex- accessible to an individual saver with a direct piry date a certain quantity of Underlying Assets investment. (financial instruments, precious metals, rates, cur- 4) Leverage Certificates rencies and indexes) at a pre-fixed price (strike Among the unprotected capital certificates, price). The exercise of a covered warrant may leverage instruments offer potentially the involve the physical delivery of the Underlying highest returns, although they allow exposure Assets or the monetary settlement of the differ- to higher risks. A leverage product enables ence, if positive, between the price of the Under- the investor to gain a right to buy (bull) or sell lying Asset and the strike price (in the case of (bear) an Underlying Asset at a price (strike) a covered warrant call) or the difference, if pos- and on a pre- fixed date. The employment itive, between the strike price and the price of of capital to invest in a product of this type is the Underlying Asset (in the case of the covered lower than that needed for a direct investment warrant put). At the moment, all the covered war- in the Underlying Asset (so-called leverage rants traded on SeDeX envisage the automatic effect). The leverage effect allows the per- monetary settlement on the expiry date, if there formance of the Underlying Asset to multiply. is a positive differential. However, the leverage does not only expand Certificates are financial instruments made up of earnings but also any losses and the investor a combination of options which replicate, with or is exposed to the risk of the early repayment without a leverage effect, the trend in the Un- of the certificate and the total loss of the in- derlying Asset to which they refer. Certificates vested capital, if the Underlying Asset reaches without a leverage effect (investment certificate) a prefixed barrier (stop loss). amount, both in terms of the capital invested and in terms of the risk, to an alternative to direct C1.3.2. Derivatives represented by “contracts” Deriv- investment in the Underlying Asset. Certificates atives represented by contracts are divided into with leverage (leverage certificate) may be of the regulated derivatives and OTC derivatives. bull or bear type. Regulated derivatives are represented by con- Based on the classification adopted by ACEPI tracts whose characteristics are standardised (“Italian Investment Certificates and Products and defined by the authority of the market where Association”, which includes the main issuers they are traded. Those characteristics concern of structured products and promotes in Italy a the Underlying Asset, the duration, the minimum developed culture of investment products, es- trading volume, the forms of settlement, etc. The pecially certificates), it is possible to subdivide complete list of markets on which such instru-

46 ments are traded and to which FinecoBank gives for the payment of the delivery price. In this access appears in the document called “Execu- case, we speak of physical delivery; tion Policy” available on the Bank’s website. - With the payment of the monetary difference OTC derivatives are traded beyond the regulat- between the current price of the Underlying ed markets and directly between the parties. It Asset, on the maturity date, and the delivery may prove difficult to liquidate a position or -as price given in the contract. The difference, sess the effective value and real exposure to if positive, will be due from the seller to the the risk. For this reason, transactions geared to buyer or viceversa, if negative. In this case, OTC derivatives involve the acceptance of high- we speak of a delivery for the difference or a er risks and / or more difficult to gauge risks. In cash settlement. such transactions, the Bank figures, as a rule, as The main types of fixed-term contracts are for- the counterparty to the investor. The parties are ward and future contracts. free to establish all the characteristics of the in- Future contracts differ from forwards by being strument; as a rule, they are swap and forward. standardised contracts, negotiated on the regu- Before conducting these types of transactions, lated markets. the investor should become familiar with all the The future is a fixed-term contract where the relevant information about them, the rules which counterparty accepts the obligation to buy or sell apply and the resulting risks. a given quantity of a specific Underlying Asset on The main objectives of trading in derivatives are a fixed date in the future and at a pre-fixed price as follows: (so-called future price). - Cover of positions (hedging): this is to pro- The future price reflects the delivery price of the tect the value of a position from unwanted forward contracts but, as it is listed, it is not strictly fluctuations in market prices. Using the deriv- speaking contracted by the parties because, like ative makes it possible to neutralise adverse all securities traded on the regulated markets, trends on the market by balancing the loss- it results from the combination of the proposed es / gains on the position to hedge with the buying and selling. It is usually given in “index gains / losses on the derivatives market; points”. Depending on the Underlying Asset, the - Arbitrage: the exploitation of a momentary future contract has various names: commodity misalignment between the trend in the price future, if a commodity, and financial future, if a of the derivative and that of the Underlying financial asset. The standardisation of the con- Asset (designed to coincide with the expiry tracts and the possibility of trading them on regu- of the contract), by selling the over-valued lated markets has significant repercussions: instrument and buying the under-valued one - The possibility of an early closure of a future and, therefore, making a risk-free profit. position without waiting for the maturity date, - For example, the more common derivative by its trading; contracts include: - Significant earnings in terms of the liquidity of - Fixed-term contracts (forward and futures); the trades and, consequently, reduced costs - Options. for the traders. Below we will also set out the characteristics of A further aspect which distinguishes the future Contracts for Financial Differences (CFD), as OTC from the forward, connected to its trading on derivatives envisaged as part of Fineco’s offer. regulated markets, is the presence of a single counterparty for all the transactions, i.e. the Fixed-term contracts (forward and futures) clearing house which, for the Italian market, is A fixed-term contract is an agreement between the Clearing and Guarantee House (referred to two subjects for the delivery of a particular quan- henceforth as CC&G). Its job is to ensure the tity of a certain Underlying Asset at a price (deliv- successful outcome of transactions and the dai- ery price) and on a pre-fixed date (maturity date). ly settlement (understood as a calculation) and The Underlying Asset may be of various types: clearing of the profi and losses made by the par- - Financial assets (shares, bonds, exchange, ties. The clearing house fiin all the transactions derivatives, etc.); concluded on the futures market: when two sub- - Commodities (oil, gold, grain, etc.). jects buy and sell a contract, they immediately In the fixed-term contract, the buyer (the one inform the clearing house, which proceeds to who undertakes to pay, on the maturity date, the buy the future from the party which sold it and delivery price to receive the Underlying Asset) to sell it to the party who bought it. In that way, opens a long position, while the seller (the one if one of the party defaults, the clearing house who undertakes to deliver, on the maturity date, takes over its obligations and guarantees a suc- the Underlying Asset and to receive in exchange cessful outcome to the transactions. It will then the delivery price) opens a short position. take action against the party in breach. Fixed-term contracts are generally structured In order to carry out its tasks systematically and in such a way that, when they are concluded, continuously and to ensure the efficiency of the the two services are equivalent. Naturally, if, at system, the clearing house adopts a series of the start, the at-term price matches the delivery measures, including the margins system, which price, later – during the course of the contract – envisages the payment by the counterparties of it will be amended to reflect, essentially, fluctua- an initial margin and variation margins during the tions in the current price of the Underlying Asset. course of the contract. On the maturity date, the contract may be exe- When the contract is bought and sold, the two cuted as follows: parties – the buyer and seller – should pay to - With the actual delivery of the Underlying As- CC&G the opening margins, which will be reset asset by the seller to the buyer, in return turned on the maturity date.

47 During the course of the contract, the CC&G cal- the right to exercise the faculty by the matu- culates on a daily basis the difference between rity date of the contract are called American the value of the contract on the day and that of options; the previous day and asks for the payment of - The exercise price (basis or strike price). This is the difference, the so-called variation margin, to the price at which the holder of the call or put the party who, compared to the previous day, option may buy or sell the Underlying Asset. sustained the loss. The margin will be credited - The asset which underlies the option con- to the party who achieved the profit. tract may be: This calculation mechanism will continue on a - a fiasset, such as shares, bonds, currencies, daily basis until the maturity date, when the last derivatives, etc.; variation margin will be settled and the initial - A commodity, such as oil, gold, grain, etc.; margin paid by the parties will be returned. - An event, of a diff nature. It is important to note that the margins system In any case, the Underlying Asset should be ex- involves the payment of daily calculation and changed on a market with offi or publicly recog- clearing of profits and losses which accrued nised listings or, if an event, should be objective- for the counterparties, unlike with the forward, ly traceable. where the profits and losses made are calculat- The two parties in the option contract are called ed and paid only on the maturity date. the buyer (holder) and seller (writer) of the option. Consequently, in the case of future contracts, The buyer, after paying a sum of money, called there are cash flows at the time when the con- the premium, gains the right to buy or sell the tract is concluded (initial margin), during its Underlying Asset. The seller receives the premi- course (variation margins) and on the maturity um and, in exchange, is obliged to buy or sell the date (liquidation of the contract). Futures involve Underlying Asset, when requested by the buyer. a high degree of risk. The sum of the initial mar- Following the terminology used by the traders, gin (also known as the guarantee margin) is the buyer opens a long position, while the seller lower than the value of the contracts and that opens a short position. produces the so-called “leverage effect”. This When the buyer of the option exercises its right, means that a relatively small fluctuation in the it decides to buy (call) or sell (put), the following market prices will have a proportionately high- situations arise: er impact on the guarantee margin. That effect - in the case of the call option, the buyer of the may be either favourable or unfavourable to the call option will receive from the seller the diff investor. So, the initial margin paid could be lost between the current price of the Underlying completely. Asset (so-called spot price) and the exercise In order to mitigate that risk, FinecoBank has price; in troduced a system to monitor the positions. - In the case of the put, the buyer of the op- It allows for the activation of automatic orders tion will receive the diff between the exercise to close them when a fluctuation in the market price and the spot price. The diff between price unfavourable to the client reaches a cer- the spot price and the exercise, in the case tain pre-fixed threshold (so-called stop-loss). of the call, and the exercise price and the FinecoBank allows you to customise the level of spot price, in the case of the put, is common- guarantee margins in place and the positioning ly known as the intrinsic value. The intrinsic of the related stop-loss closing position. value cannot be negative, as the bearer has Options a right, but not an obligation, to buy or sell. An option is a contract which gives a right, but not Therefore, if the current price of the Underly- an obligation, to buy (option call) or sell (option ing Asset at the time of the exercise is lower put) a given quantity of an asset (the Underlying than the exercise price of the call (or vicever- Asset) at a pre-fi ed price (strike price or exercise sa, for the put), it will simply avoid exercising price) by a certain date (maturity date) or when the right and the loss will be restricted to the it is reached. Such contracts may be negotiated sums paid for the premium. either on the regulated markets or OTC. - For some types of options, execution of the The characteristic features of an option are: contract may proceed as follows: - The Underlying Asset. It may be a share, an - With the actual delivery of the Underlying index, a foreign currency (or exchange rate), a Asset, when we speak of a physical delivery; future contract, a commodity or any financial - With the delivery of the cash diff between the instrument or real asset. All options written current price of the Underlying Asset and the on the same Underlying Asset amount to a exercise price (cash settlement). “series”; Purchasing an option is a highly volatile invest- - The faculty. The options which give the hold- ment and the likelihood that the option may er the faculty to buy the Underlying Asset on reach maturity without any value is very high. a future date are called the call options. The If that happens, the investor will have lost the options which give the holder the faculty to entire sum used to buy the premium, plus the sell the Underlying Asset are called put op- commissions. tions. All options of the same type (call or put) Following the purchase of an option, the inves- amount to a “class”; tor may maintain the position until the maturity - Maturity date. The options which give the date or carry out a transaction in the opposite holder the right to exercise the faculty only direction or, for “American” type options, exer- on the day which coincides with the maturity cise it before the maturity date. The exercise date of the contract are called European op- of the option may involve a cash settlement of tions, while the options which give the holder the difference or the buying or selling of the Un-

48 derlying Asset. If the option is geared to future are “autonomous” and separate from that of the contracts, the exercise may cause the taking of individual participants. That separation of assets, a position in futures and related obligations con- which serves mainly as a guarantee, means that cerning the adjustment of guarantee margins. the fund’s assets are not influenced by the cred- An investor tempted to buy an option for an as- itors of the management company. In the event set whose market price is far removed from the of individual actions to protect the credit or if price at which it would be convenient to exer- the company becomes bankrupt, they may sat- cise the option should consider that it is unlikely isfy their credit claims only from the company’s that the exercise of the option will ever be profit- assets and not also from the assets of the fund able. which belongs to the subscribers. The sale of an option involves, as a rule, a much The subscription of the shares is the vehicle for higher risk than its purchase. participating in a mutual fund. Such shares, all of In fact, even if the premium received for the sold an equal value, are represented by registered option is fixed, the losses which the seller of the or to-bearer certificates which incorporate equal option may sustain may be potentially unlimited. rights. Each participant gains a right over a portion For this reason, it is not a type of transaction of the assets, proportionate to its cash contribu- which the Bank usually offers to its own clients. tion. In that way, it also accepts the risk arising Contracts for Financial Difference (CFD) from the investments made by the manager. The A CFD is a derivative, as its value is linked direct- value of each individual share, calculated each ly to that Underlying Asset and therefore follows day, derives from the ratio between the net val- its exact course. In particular, a CFD envisages ue of the entire assets, divided by the number of the cash payment of the price Difference re- shares in circulation. corded, on a particular underlying, between the Among the various types of mutual funds on the moment of the opening and the closing of the market we find the real estate type, which in- CFD contract, without that involving any physical vest solely or predominantly in real estate and exchange of the Underlying Asset. in stakes in real estate companies, and those of The Underlying Asset may comprise, for exam- the securities type, which invest in instruments ple, an index, another financial instrument (e.g. on the securities market (equity securities, debt a share) or an exchange between currencies or instruments, derivatives, etc.). While those of the commodities (so-called CFD on indexes, CFD on real estate type, owing to the type of investment shares, CFD forex, CFD on commodities). which characterises them, are always closed- To enter into a CFD, only the payment of the min- end, the securities type can be open or closed: imum portion of its counter-value is required (so- - Open funds, including ICVCs, under which called Guarantee Margin), while the Difference is the number of units or shares are not fixed. compared to the entire counter-value, the CFD is New units can be created for new investors characterised by a strong leverage effect. and units belonging to investors wishing to The purpose of concluding a CFD is to benefit sell will be cancelled. from the economic effects of a price variation in - Closed funds, which issue a fixed number of the Underlying Asset but without gaining owner- shares which are not redeemable from the ship and without having to employ to that end the fund. Unlike open-end funds, new shares in a entire counter-value of the instrument. closed- end fund are not created by manag- Consequently, the purpose of a CFD is specula- ers to meet demand from investors. tive and, as such, it is highly risky. In particular, if - Investment in mutual funds and ICVCs allows: there are unfavourable fluctuations in the price - The entrustment of savings management to of the CFD, the losses sustained may exceed the subjects who carry out that task profession- Guarantee Margin. That risk is mitigated through ally; the Stop Loss mechanism which, under normal - A diversification of investments difficult to- ob market conditions, causes the closure of the po- tain from individual investors, as their savings sition before the loss can exceed the Margin. flow into large-volume assets. C1.4. Quotas and shares of OEIC (mutual funds and For mutual funds and ICVCs, the Bank provides ICVCs) the client with information about the management Mutual funds and ICVCs (Variable Capital In- company and the make-up of the assets. Clients vestment Companies) belong to the category of are also informed about the categories to which OEIC (Open-Ended Investment Company). they belong and the rating according to the clas- These are portfolios of instruments where the sification criteria used by the independent finan- associated risks concern the instruments which cial research company called Morningstar. comprise them, potentially the whole range of C1.4.2. Alternative investment funds (AIFs) financial risks. In order to correctly identify the Non-harmonized funds (AIFs) are not subject to associated risks, it is important to be familiar with the same rules for containing and splitting risks the specific characteristics of each fund (for a de- which UCITS funds are subject to. As a result, AIFs tailed de scription of the risks, refer to paragraph are riskier instruments than UCITS mutual funds. C3 - “Main risks associated with investment in The most prominent types of AIFs include hedge financial instruments and products”). funds, private equity funds (which include ven- C1.4.1. Mutual fund and ICVCs ture capital funds), real estate funds, infrastruc- The mutual fund is an autonomous asset which ture funds and commodity funds. belongs to multiple participants. It is divided into Speculative funds (hedge funds) are mutual funds quotas and is managed from above by an Asset in which the assets can be invested in different Management Company. The managed assets Assets, which can be even risker than those en-

49 visaged for the open funds, as a derogation from action carried out, acknowledges to you a return the prohibitions and prudent rules to contain and calculated according to the effective duration of divide the risk established by the Bank of Italy. the loan, the annual rate published from time to It is also possible to apply the distinction be- time in the area reserved on the Bank’s website tween open and closed-end funds to speculative and stated in the securities lending confirmation funds. Shares in speculative funds can be sub- and the price of the financial instrument given in scribed at any time, while repayment can occur the official price lists on their delivery date. monthly (or every quarter in some cases). In relation to each loan transaction and until the Speculative funds cannot be subject to public subscription of the contract for the service, you offers. authorise the Bank to transfer the financial in- C1.4.3. Exchange Traded Fund struments identified at the discretion of the Bank Exchange Traded Funds (ETF) are a particular from its securities deposit to the deposit which type of OEIC with two main characteristics: belongs to the Bank and to carry out all the for- - They are traded on the Exchange as a share; malities required for that purpose. On the maturi- - Their only investment objective is to replicate ty date of the transaction, the Bank returns to you the index to which they refer (benchmark) financial instruments of the same type and quan- through a totally passive management. There- tity as those taken on loan, together with any fore, an ETF combines the characteristics of supplementary rights which have matured (inter- a fund and a share. It allows investors to en- est, dividends and/or other distributions) on the joy the strong points of both instruments: the loaned financial instruments during the course of diversification and reduction of risk found in the loan, by crediting them to the current account funds; the flexibility and the transparency of in- linked to the securities deposit, net of any with- formation about the trading in real time found holdings, in line with current tax provisions. in shares, which allow an immediate valuation The Bank has unrestricted authority to consider of the shares and allows the investor to use from time to time whether to proceed (or not) to them for mid to long-term, shortterm or ex- conclude the securities lending transactions. It tremely short-term investments. will decide independently, within the limits de- One of the principal advantages of an ETF is the fined in the context of the “Specific Terms re- presence of restricted costs, in terms of the man- garding the Interest-bearing portfolio service”, agement commissions paid by the investor. That on the type and quantity of financial instruments typically arises from the passive management, to use. It accepts no obligation to you to execute which is geared to replicate exactly the bench- specific loans, even if you give instructions to the mark index. This calls for minimum intervention Bank. by the asset manager and a low rate of rotation By the tenth Working Day after the end of the for the investments. month when the loan was made, the Bank will A particular type of ETF is the structured ETF, provide the client, in the area reserved on the that is to say OEIC negotiated as shares and website finecobank.com, the confirmation of the managed with techniques geared to pursue re- transaction, with its essential features. turns which depend not only on the trend in the When the individual contracts are concluded, benchmark index but also to sometimes protect you will be debited no commission or charge. the value of the portfolio, while participating in The risk associated with this type of transaction any increases in the market in question, or to is the counterparty insolvency risk, resulting from take part in a more than proportionate degree in the transfer of the ownership of the financial in- the trend in an index (“leverage ETF”). struments from you to the Bank. In particular, the Bank might financial it is impossible to face up C1.5. Other products handled by the Bank C1.5.1. to its own contractual commitments vis-a-vis the Securities lending client (return of the financial instruments or their Securities lending is a contract by which a sub- counter-value, the payment of the remuneration ject (the borrower) gains the ownership and the and/or the fruits arising from the financial instru- availability of a certain amount of fi instruments ments). from another subject (the lender) for a pre-fi ed The Bank is committed to returning the securities period of time and on the maturity date or, if the to you at the maturity of the loan. In any case, contract allows, on the lender’s request, under- the Bank guarantees each loan transaction, takes to return to it securities of the same type providing, as collateral, listed and/or unlisted and quality and to pay the fi agreed as remuneration. bonds with a minimum Moody’s rating of “Baa1” The “Interest-bearing portfolio” service proposed or equivalent grade of other primary rating agen- by FinecoBank is based on the securities lending cies. The financial instruments provided as collat- contract and envisages the granting by you to eral are deposited in cumulative form in a specif- the Bank of a mandate to conclude with the Bank ic account with Société Génerale Securities Ser- individual loan agreements equal to one Work- vices S.p.A., for an amount that guarantees the ing Day by using part or all of the financial in- total amount of loan contracts, from time to time, struments, dematerialised from time to time, reg- with all customers. For the purposes of assessing istered in the securities deposit in its name. The counterparty risk, it is important to note that the service allows you to achieve a further remuner- guarantee provided by the Bank are represented ation over and above any the distributions arising by financial instruments issued by third parties from the financial instruments (interest, dividends and, therefore, in the event of the insolvency of and other distributions), if the Bank takes the se- such parties, this guarantee may not operate. curities on loan. In fact, the Bank, for each trans- C2. Places where orders received from the clien-

50 tele are traded The following account, which is geared to identify The clients’ orders may be executed on a reg- and provide a concise analysis of the main risks ulated market, on a Multilateral Trading Facility usually associated with investments in financial (MTF) or “over the counter” (OTC). products and instruments, does not claim to be C2.1. Regulated market either complete or exhaustive. It is designed to A regulated market is a multilateral system which provide the clients with a supplementary support enables or facilitates the coming together, within when choosing the best investment possible, it and based on non-discretionary rules, of multi- bearing in mind the personal degree of exposure ple interests of third parties to buy and sell finan- to the risk and the economic possibilities. cial instruments accepted for trading in line with C3.1. Main risks the rules of the market, in order to pave the way Market risk for contracts. The regulated market is managed When we speak of market risk, we are referring by stock exchange companies. in general to the risk that the market value of the C2.2. Multilateral Trading Facility instruments on portfolio may fall as the result of Multilateral trading facilities are similar to regulated changes in market conditions (share prices, inter- markets, with the difference that they may be man- est rates, credit spread, exchange rates and their aged not only by regulated market management volatility). companies but also by an Italian investment com- The market risk may be divided into different cat- pany and banks authorised to provide that service. egories. The influence of each on the trend in the The management of multilateral trading facilities price of the investment may differ. is an investment service that can bring togeth- 1. Price risk: the risk of fluctuation in the price er, on the basis of pre-fixed rules, offers to buy of a financial instrument whose value is re- and sell coming from multiple traders. Authorised flected, in fact, in the market price. In general, subjects should comply with certain requisites we speak of price risk in a strict sense when and rules to ensure a fair, orderly and transparent it is not possible to precisely identify other trading procedure for users and notify to the rele- risk factors which influence the price of an vant Supervisory Authority a series of information instrument. In addition, a distinction is made about the subjects and instruments allowed for between the “generic” price risk, which takes trading, the operating rules of the system and the into account the whole market in question supervisory rules adopted to ensure the orderly (e.g. share market), and the “specific” one, course of trading. which refers to the individual security (e.g. a company share). Let us consider an investor C2.3. Over the counter market who holds shares on portfolio. The market The “over the counter” (OTC) market is a mar- value of its investment is sensitive to the ket not subject to a specific regulation over the trend in the quotes (prices) for the securities organisation and operation of the market where held. However, in the case of an investment financial instruments are exchanged, placed and in derivatives (or instruments with a deriva- repaid. The lack of regulation is demonstrated tive component), the price risk is expressed by the fact that the functioning of that market, the indirectly as a potential reduction to the mar- securities and the traders allowed are not subject ket value of the investment following varia- to the specific controls and authorisation of the Fi- tions in the quote (price) of the Underlying nancial Market Supervisory Authority and are not Asset security. A covered warrant investor, entered in the specific association. The forms of for example, bears the risk arising from pos- contracting are not standardised and it is possible sible adverse fluctuations in the price of the to conclude “atypical” contracts. Generally speak- security which figures in the covered warrant. ing, securities handled on an OTC market are less 2. Interest risk: this concerns bonds and all se- liquid than those handled on official markets. curities, including derivatives, which as a rule C2.4. Systematic Internaliser are sensitive to variations in interest rates. Systematic Internalisers amount to trading sys- Imagine an investor who holds a bond on tems – alternatives to regulated markets – of portfolio. The price of the instrument on the a bilateral nature, as a direct counterpart of the maturity date is equal to the repayment val- broker with the client. Exercise is reserved for in- ue, which generally coincides with the nomi- vestment companies, banks and regulated mar- nal value. Ahead of the maturity date, a rise in ket managers. interest rates means a reduction to the price To start the activity of systematic internalisation, of the bond. The further away the maturity no further authorisation is needed beyond that date of the security is, the greater the risk. required for trading on one’s own behalf, but the The interest rate may act as the Underlying subject is expected to notify to CONSOB a series Asset in certain derivatives. of information about the activity of internalisation 3. Exchange risk: this emerges when the mar- and the instruments handled and that it complies ket value of the investment is sensitive to with rules for transparency similar to those al- fluctuations in exchange rates. Let us con- lowed for the regulated markets and the multilat- sider the purchase of American shares or eral trading facilities. At the moment, FinecoBank covered warrants on those shares by a Euro is the Systematic Internaliser of certain shares, Area investor. In both cases, the value of the futures, Daily Options and CFDs (an updated list investment is influenced by the possibility of is published on the website finecobank.com). adverse fluctuations in the Euro – US dollar C3. Main risks associated with the investment in exchange rate. The exchange risk may also financial instruments and products contribute to the fixing of the value of certain

51 derivatives. in the price of a bond cannot be explained 4. Volatility fluctuation risk (prices, interest rates by movements in the general conditions on and exchange rates): concerns investments in the market (interest rates, exchange rates, derivatives (or those with a derivative compo- etc.) but concern the issuer’s particular situa- nent) and it emerges when the market value tion. “Credit spread” means the difference in of the instruments on portfolio is sensitive to the return between bonds issued by issuers fluctuations in the anticipated volatility (and with different credit ratings, all other market not historic volatility) of other market variables conditions being equal and with the same is- such as interest rates, exchange rates and sue characteristics. The measurement of the share prices. That risk is typically associated spread depends on the degree of subordina- with options or warrants. Let us consider the tion of the security: for subordinate bonds, the purchase of a covered warrant on the S&P/ required spread will be higher than for ordi- MIB index: the investor bears, amongst others, nary (so-called senior) bonds. To measure the the risk associated with unexpected fluctua- credit spread of a bond, the return on bonds tions in the index during the remaining life of issued by subjects with an excellent credit rat- the warrant. ing (often defined as risk free or similar) is usu- 5. Liquidity risk: this emerges when a financial in- ally used as a reference for comparison. As a strument is not converted quickly into curren- rule, the credit spread falls with the remaining cy without that involving a loss of value. The life of the security. liquidity risk depends, first of all, on the char- 11. Issuer insolvency risk: this is when the issuer acteristics of the market where the instrument may not be able in the future to face up to the is handled. In general, all other things being obligations to pay entered into (as payments equal, instruments handled on organised mar- of warrants or capital repayments) on the fixed kets are more liquid than those not handled dates. on those markets, as the supply and demand 12. Sovereign risk: this occurs when a national for securities originating from numerous trad- government does not manage to face up to ers flows mostly into those markets and leads its own debt commitments. In other words, it to the formation of more reliable prices, as concerns the credit risk of a sovereign issu- they reflect the result of numerous exchang- er. Just like a company which issues financial es (or proposed exchanges). However, it is instruments runs the risk, owing to meagre necessary to consider that the divestment of liquidity or a temporary crisis, of not being financial instruments handled on organised able to meet its own contractual obligations, markets to which access may be difficult may a State, in conditions of substantial indebt- create, for the investor, difficulties in liquidat- edness, may not be able or may not wish to ing its own investments and the need to toler- meet its own commitment to pay (Government ate extra costs. As for subordinate bonds, you bonds and similar) on the agreed expiry dates. are reminded that the issuer may proceed to In that situation, the sovereign debtor could freely repurchase them for an amount of no also amend its own contractual commitments more than 10% of the issue value. Any repur- to the creditors. chase of a sum which exceeds that threshold 13. Subordination risk: in the event of the liquida- requires authorisation from the Bank of Italy. tion / insolvency of the issuer, the subordinate The existence of that constraint could make it investor may incur a loss – possibly a total difficult for bond- holders to supplement their loss – of the invested capital, probably worse investment in the liquidation. In other words, than that of an ordinary creditor. In fact, subor- the liquidity risk might rise. dinate bonds will only be repaid after all the 6. The liquidity risk is potentially associated with other preferential and unsecured creditors all instruments and depends on the charac- have been satisfied. For that reason, the re- teristics of the market where the various in- maining available funds of the issuer may not struments are traded (provided that they are be adequate to repay – even partially – the negotiable). subordinate creditors. However, subordinate 7. The exchange risk concerns the currency in bonds will be repaid at an equal pace and which the instruments were issued and not with precedence over the issuer’s shares their intrinsic characteristics (apart from deriv- and other capital instruments characterised atives on exchange). by a higher degree of subordination than the 8. Credit risk above bonds. 9. When we speak of the credit risk, we are referring to the risk that the market value on C4. Classification criteria of the financial instru- an instrument on portfolio falls owing to un- ments adopted by the Bank and risk indicators expected changes in the issuer’s solvency or Time Span financial situation. In general, it is possible to The recommended Time Span is the minimum classify two categories of credit risk, which are time recommended for the holding of the invest- jointly reflected by the credit spread: the risk ment. It is calculated according to the liquidity of of variation in the spread itself and the future the instrument and the time required to amortise insolvency risk. An issuer’s credit risk may the costs of subscribing the investment made. It constitute the Underlying Asset reference in is determined by specific methods identified and certain derivatives. ratified by the Bank. One of the following values 10. Credit spread risk or credit spread: contrib- may be adopted: utes to the formation of the market risk for list- - SHORT-TERM: up to 18 months; ed instruments. It emerges when fluctuations - MID-TERM: over 18 months and up to 60

52 months; Bank, for the purposes of measuring the market risk - LONG-TERM: over 60 months. through VaR2, according to the following classes of risk: Rating VaR2 is a statistical measure (estimate) of the risk of fi- The rating is the valuation of an issuer / guarantor nancial investments adopted by the Bank, summarised or an issue made by a specialist agency (therat- in a number from 0 to 1,000, applicable to all types of ing agency) and shown in abbreviated form by financial instrument and portfolios of instruments. VaR2 using letters or figures. Over time, the rating may measures the market risk, including the fluctuation in change owing to circumstances which induce the the credit spread, but does not take into account either rating agency to reconsider its previous assess- the issuer’s insolvency risk or the liquidity risk of the ment. The award of a rating is also helpful to issuers in the procedure for the pricing and placement financial instruments. of the securities issued. Rating is a useful tool for VaR2 is calculated according to historic simulations: a an investor because it allows it to assess the credit biannual historic series of market prices or risk factors risk associated with the investment in a particular is employed which determine the prices of the financial financial instrument. The rating of an issuer / guar- instruments to estimate the maximum weekly potential antor provides a global valuation of the solvency loss which an instrument or a portfolio may sustain in of a particular subject, in other words its general 95% of cases (e.g. VaR2 16 represents the maximum suitability to honour its financial commitments on estimated weekly loss on an investment of €1,000 or the due date. The rating given to subordinate €16 for every € 1,000 invested). VaR2 is recalculated debt is lower than that given to ordinary debt (so- every day to reflect developments on the financial mar- called senior debt). A rating may also be given to kets and credit. an individual issue: in that case, the valuation also concerns the specific characteristics of the finan- Instruments risk VAR2 cial instrument in question. The rating of an issue of the instrument reflects the issuer’s ability to repay the capital and pay the interest on the fixed date. LOW Up to 7 Up to 7 MID-LOW From 8 to 15 From 8 to 15 A AA A A A A BBB B BB Issuer R. A A + A A- + - + B B- MID-HIGH From 16 to 27 From 16 to 27

A B HIGH From 28 From 28 AA A A A A BBB BB Issue R. A A B + A A- + - + B- A B C5. Particular product categories Investment Category (investiment grade) C5.1 Complex Products

BB B B B B CCC CC CC C S i) financial products arising from securitization Issuer R. B D + B B- + - + C C- C D of credits and other assets (for example Asset Back Securities) BB B B B B CCC CC CC C S Issue R. B D + B B- + - + C C- C D ii) Financial products where on the initiative of Speculative Category (non-investiment grade) the issuer, conversion into shares is envisaged for example to enable the issuer to meet regu- Speculative Category (non-investment grade) latory capital requirements The shift from AAA to D reflects a gradually decreasing likelihood of repayment. iii) Credit-linked financial products (exposed to the credit risk of third parties) Classes of Liquidity Based on pre-determined criteria and requisites, the iv) Derivative financial instruments not traded in Bank identifies the liquidity class of the financial instru- trading venues entered intofor purposes other ments. If it is not possible to attribute to an instrument than hedging purposes. a liquidity class owing to a lack of the necessary data, the Bank will put in the relevant form the value 0. Con- v) Structured financial products not traded in sequently, the values given by the Bank are as follows: trading venues, which do not guarantee full 1: illiquidity repayment at maturity of the capital invested 2: low liquidity by the customer. 3: mid-low liquidity 4: average liquidity vi) Derivative financial instruments other than 5: mid-high liquidity those referred to in point IV. 6: high liquidity 0: not calculated vii) Financial products with payments linked to Each value from 1 upwards to 6 reflects a higher de- indices that do not comply with the ESMA gree of liquidity of the financial instrument, understood guidelines for ETFs as the possibility of disposing of it within a reasonable period of time and at significant price conditions. viii) Perpetual bonds.

Market risk ix) Alternative funds Financial instruments / products are classified by the

53 bank bond could see their shares converted and / or x) Structured financial products, traded in trading reduced (in whole or in part), but only if the resources venues, which do not guarantee the full return of shareholders and those with subordinated debt (ie on the capital invested by the customer. riskier instruments) have proved insufficient to cover losses and recapitalize the bank, and provided that xi) Financial products with leverage greater than 1. the relevant regulator does not decide to exclude such credits on a discretionary basis, in order to avoid the xii) UCITS pursuant to art. 36 of EU Regulation no. risk of contagion and to preserve financial stability. 583/2010 and class III or V policies with similar There are some exclusions from the application of the characteristics bail-in. Among these are: a) deposits up to € 100,000, ie those protected by The products listed from I. to V. (the so-called Black the Italian Deposit Guarantee Fund. This protec- List) are not normally suitable for retail customers and tion concerns, for example, the amounts held in therefore can neither be recommended nor distributed the current account, in deposit accounts (such as directly to retail customers. time deposits), in deposit books and in registered In the case of recommendation / distribution of the oth- certificates of deposit covered by the Guarantee er types of instruments with very high complexity from Fund; however, it does not concern other forms VI. at XII. (c.d. Gray List), the intermediary must inform of use of savings such as bonds issued by banks. the customer about the nature of the product as well as Even for the part exceeding 100,000 euros, de- provide for controls.C5.2 =Products subject to Bail in posits of natural persons and small and medi- The Banking Resolution and Recovery Directive, um-sized enterprises receive preferential treat- “BRRD”), establishes a harmonized regime within the ment. In particular, they would bear a sacrifice European Union for crisis prevention and management only if the bail-in of all instruments with a lower of banks and investment firms. degree of protection in the bankruptcy hierarchy When the conditions for launching the intermediary was not sufficient to cover losses and restore an “crisis” management procedures are in place, the Bank adequate level of capital. of Italy has: b) guaranteed liabilities, including guaranteed bank a) the reduction or conversion of shares, other eq- bonds, liabilities deriving from derivative con- uity investments and equity instruments issued tracts hedging the risks of receivables and secu- by the institution to remedy the potential bank- rities sold as collateral for the obligations, within ruptcy or risk of failure of the intermediary; the limits of the value of the assets pledged as b) when the measures in (a) above do not reme- collateral, as well as liabilities towards of the tax dy the failure or risk of failure, the adoption of administration and social security institutions, if measures for termination of the intermediary or the relative credits are assisted by a privilege or compulsory administrative liquidation. other legitimate right of pre-emption; The resolution measures include internal bail-in, a tool c) any obligation arising from the holding by the en- that allows the reduction of the value of the shares and tity subject to resolution of customer availability, of some credits or their conversion into shares to ab- including the availability held in the provision of sorb losses and recapitalize the institution which is in services and investment and ancillary activities difficulty sufficiently to restore adequate capitalization or from or on behalf of collective investment un- and maintain market confidence; or in case of sale, to dertakings or alternative investment funds , pro- reduce the nominal value of the transferred liabilities or vided that these customers are protected in the applicable bankruptcy proceedings; to convert these liabilities into capital. (d) any obligation arising as a result of a fiduciary The bail-in is applied by the authorities broadly fol- relationship between the institution under reso- lowing a hierarchy where those who invest in riskier lution and a third party, as a beneficiary, provided financial instruments sustain losses before others who that the latter is protected in the applicable insol- invested into less risky instruments. vency proceedings. After having exhausted all the resources of the most risky category is the next category. First, the interests D Information about costs and charges associat- of the “owners” of institutions, ie of existing sharehold- ed with the provision of services ers, are sacrificed, reducing or eliminating the value of INFORMATION CONCERNING THE EVALUA- their shares. Secondly, certain categories of creditors, TION OF APPROPRIATENESS CARRIED OUT BY whose assets can be transformed into shares - in order THE BANK IN THE PERFORMANCE OF INVEST- to recapitalize the institution- and / or reduced in value, MENT SERVICES in the event that the zeroing of the value of the shares Depending on the services provided to custom- is not sufficient to cover losses. ers, the Bank is required to assess appropriate- The order of implementation of the bail-in is as follows: ness. a) ordinary shares, retained earnings and reserves The assessment of appropriateness is carried (net of goodwill); out in order to allow the Bank to act according to b) convertible bonds; the best interests of the client. For this reason it c) subordinated debt, ie medium / long-term sub- is essential that the customer provides complete ordinated debt (5 years) and any excess of value and accurate information when completing the adjustments with respect to expected losses (eg Bank’s questionnaire. Tier I and Tier II bonds); In particular, when the Bank provides investment d) other subordinated debts (eg Tier III bonds); services, it is required to assess whether the lev- e) other eligible liabilities (eg ordinary bonds and el of knowledge and experience of the client is deposits for the amount exceeding € 100,000). “appropriate” with regard to the specific type of For example, in the event of a bail-in, those with a instrument or service proposed or requested. If

54 the Bank deems that the instrument and / or ser- records remain available for at least 5 (five) years vice is not appropriate, it warns the customer of from the date of the order. Orders are sent to the this situation. Bank via telematics (Internet, GSM system and In the case of services rendered to a profession- other telematic channels which the Bank feels al client, the Bank may assume that with refer- it would be appropriate to use) after the typing ence to the products and services for which it of a User ID, a Password and a PIN issued to has been classified as a professional client, it has you after the signing of the contract. The Bank, the level of knowledge and experience such as in order to preserve the security of information, to understand and risks and the characteristics of may replace those codes only after notifying the such products / services. client in good time. All orders placed through The following is a summary of the information telematics are given a unique identification by that the Bank uses to perform the assessment of the Bank through a number. The entry of that appropriateness: number on the Orders screen confirms the order 1) Level of knowledge of the client: it is deter- received. You may keep a copy of the confirma- mined taking into account both the qualifi- tion by printing the relevant page. All orders are cation obtained by the client, his profession recorded by the Bank on informational back- up (current or previous) and his interest in keep- and are duly filed. The Bank’s recordings prove ing up-to-date on financial market trends, the giving of orders via the telematic service. and through questions related to basic con- In order to send orders via telematics, you need cepts on investments in financial instruments to have equipment and programs which meet such as: the technical specifications fixed by the Bank • the risk / return ratio linked to each finan- and which are published on its Internet site. cial instrument, Once given, your orders may only be withdrawn • the impact of diversification on the level if they have still not been executed. of risk. The Bank is not responsible for the non-execu- • currency risk tion of orders due to your failure to meet obliga- • liquidity risk. tions arising from the Contract. 2) Level of customer experience: the customer The terms of this point also apply to withdrawals is asked to provide data on the transactions of orders placed by you. conducted in the last year with other finan- The Bank is required to report transactions to rel- cial intermediaries (number of transactions evant reglators and as part of those reports must carried out, total value and the instruments specify the identification codes of those who on which they operated). have arranged them. For the purposes of these Further information on the investment expe- reports, the Bank requires a corporate Cus- rience is recorded automatically by the Bank tomer’s Legal Entity Identifier (LEI) code and for based on the customer’s. natural persons their NIC (National Identification Code) code. The Bank also requires the LEI and E Summary of the main clauses concerning the NIC codes of every person entitled to operate on investment services and the “general contrac- the account by virtue of a delegation granted by tual conditions” which contain the regulations the Client as well as by the legal representative over the banking, financial and investment of a natural person operating as a consumer. The services provided by the bank to its own cli- Client is required to provide the Bank with these ents codes (LEI / NIC) and / or the personal data nec- E.1 Characteristics of the services essary for the determination of the NIC codes, The Bank carries out activities related to services and to promptly report any changes to it. The for the receipt and sending of orders, the execu- Customer is aware and accepts that the Bank will tion of orders on the behalf of clients, including not be able to follow up an order subject to the through the negotiation on its own behalf of fi- reporting obligations in the event that the same nancial instruments, the placement and distribu- does not have the aforementioned identification tion of financial instruments, investment services codes or said codes are invalid. In the event of and financial insurance products. a change in the aforementioned legislation, the When performing the Services, the Bank is au- provisions will be applied from time to time. thorised to act on your behalf and also in its own E.3 Handling orders name. The Bank applies measures which ensure a E.2 Giving and withdrawal of orders (as part of the quick, correct and effi handling of your orders Service for the receipt and sending of orders compared to your other orders and the Bank’s and the execution of orders on the clients’ trading interests. When executing orders, the behalf, including through trading on own ac- Bank acts in your best interests, in compliance count) with regulations in place at the time concerning Orders are given in writing, by telephone or via the service rendered. This is without prejudice, in telematics. any case, to compliance with any specifi instruc- Upon receipt of an order the Bank will issue tions given by you and what is stated in point to the Client a paper certificate containing the E.4 below.The Bank handles equivalent orders name of the Customer, the time and date of rein order and promptly, unless the characteristics ceipt, the essential elements of the order and of the order or the prevailing market conditions any ancillary detail. If orders are given by tele- make that impossible or your interests require phone, the Bank records them on magnetic a different approach. The Bank will inform you tape or on another, equivalent back-up. These about any significant difficulties that could influ-

55 ence the correct execution of the orders, as soon orders and, unless you have withdrawn them as it becomes aware of them. When performing in time, it will send or execute them by the day the service for the receipt and sending of orders, when operations resume. In addition, the Bank is the Bank sends in good time your orders to oth- not compelled to execute orders received in all er brokers authorised to perform the service of cases where it is impossible to operate owing to the execution of orders on your behalf, trading the Exchange filters. In such cases, the Bank will on own account or placement. You expressly au- inform you of the irregularity found in the order thorise the Bank to send the orders to brokers and, then, if it receives confirmation from you, will belonging to the same Group as its own. The decide whether or not to execute. Bank has authority to not send your order and E.4 Strategies for the sending and execution of will notify you immediately. You recognise that orders the Bank reserves the right, including in order An analysis of the strategies employed by the to protect its own clients, to restrict and/or ex- Bank for the sending and execution of orders clude in general, including just temporarily, the can be found in the section “Strategies for the possibility of the purchase of certain securities or sending and execution of orders” (so-called Ex- particular types of financial instruments. Such re- ecution Policy) delivered / made available by the strictions will be made known in the form indicat- Bank to you. By signing the Contract, you give ed from time to time by the Bank.In general, the your consent to the content of that document Bank is authorised to arrange for its replacement, and give your express consent, in general, to the for the execution of orders received, by sub-cus- fact that the orders it has given can be execut- todian subjects or other qualified and equivalent ed outside a Trading Venue. The Bank makes brokers. you aware of any significant changes to the If the Bank, when executing an order, becomes above-mentioned strategies. If the orders sent your counterparty – without prejudice to the op- by the Bank are executed on a Trading Venue, tion to not execute the order and to notify you the rules observed therein will be followed. You immediately – it will inform you, when it receives recognise that the rules of such venues, in order the order, of the price at which it is prepared to to allow the orderly course of trading, allow the buy or sell the financial instruments, while ob- broker entrusted with the trading to control the serving the current obligations in terms of the prices and the quantities and frequency of the execution of orders under the most favourable orders received. So, orders may be blocked if conditions, and carries out the trading with your there are provisions which bring to light irregu- consent. larities in terms of the profiles given.You recog- The Bank may aggregate your orders with an or- nise and are aware of the fact that any specific der from another client, thereby minimizing the instructions it gives about the execution of the risk that could follow. It distributes correctly the orders (in particular, about the Execution Venue aggregated orders and transactions according to to which to forward them) may compromise the its own allocation strategy. In any case, you rec- measures envisaged and applied by the Bank ognise that the aggregation of the order could and by the brokers - to which the latter resorts to be to its detriment. The Bank may also aggre- execute the orders - to obtain the best possible gate transactions on its own account with one or result when they are executed. more of your orders, provided that the allocation of the relevant transactions cannot harm you in E.5 Inappropriate transactions – conflicts of inter- any way. In the case of the partial execution of est The Bank observes the rules found in current aggregated orders with transactions on its own laws and regulations in terms of the assessment account, the Bank allocates the executed trans- of the appropriateness of the transactions made actions to you before the Bank. The transactions with or on your behalf during the performance carried out may be allocated proportionately to of the services to receive and send orders, the the Bank if, according to the strategy employed execution of orders on the clients’ behalf, includ- for the allocation of orders, without aggrega- ing through the trading on its own account of tion the order could not have been executed financial instruments, the placement and dis- in similarly advantageous conditions or it could tribution of financial instruments, investment not have been executed at all. The prohibition services and financial insurance products.If the against clearing orders in the opposite direction Bank receives from you instructions for a trans- remains.In any case, the Bank is not obliged to action which is not appropriate, in light of the send or execute orders received in all instances information it provided about its knowledge and where it would be impossible to operate owing experience of investments in fi instruments, the to causes for which it is not responsible or, in any Bank will inform it of that fact. It is understood case, to delays due to malfunctioning of the mar- that, if you have not provided such information, kets, a lack of or irregular sending of information the Bank will tell you that it cannot assess the or causes beyond its control, including (but not appropriateness. limited to) delays or faults in the system line, other The Bank observes the rules in laws and regula- problems caused by interruptions, suspensions, tions in force at the time over conflict of interest defects, malfunctioning or the non-operation of in the provision of investment and supplemen- telephone or electronic systems, trade union dis- tary services. The Bank is required to adopt all putes, Acts of God or strikes. Without prejudice appropriate measures to identify and prevent to the fact that, in such situations, the Bank will or manage conflicts of interest that may arise not be responsible for the harmful consequenc- between the Bank itself (including executives, es you might suff , it will immediately inform the employees and connected agents or persons latter that it is impossible to send or execute directly or indirectly connected) and its Custom-

56 ers or between two Customers at the time of the original outlay. Consequently, it cannot be provision of investment and accessory services quantified before- hand. or a combination of these services. The Bank In order to carry out transactions with the fi- maintains and applies effective organizational nancial instruments mentioned in this point, and administrative provisions in order to take all the parties should conclude a specific ad- reasonable steps to avoid that conflicts of inter- ditional contract, for which the Contract is est negatively affect the interests of its Custom- a necessary pre-condition. The provision ers. of this point does not apply, in any case, to When the measures taken to tackle the conflict transactions geared to warrants and cov- of interest do not prove sufficient to ensure, with ered warrants, which can proceed by virtue a reasonable degree of certainty, that the risk of of the Contract.In accordance with current harming the clients’ interests can be avoided, provisions, in the case of transactions which The Bank clearly informs Customers, before act- could trigger actual or potential losses which ing on their behalf, of the general nature and / or exceed the purchase price of the financial sources of such conflicts of interest and of the instruments, the contract indicates and reg- measures taken to mitigate such risks. ulates, in relations to execute, receive and It is also the Customer’s right to request further send orders, the threshold for the losses clarifications regarding the Bank’s conflict man- beyond which a specific notice needs to be agement policy. The Bank reserves the right, if sent to you. a transaction proves not to be appropriate or E.8 Transaction documents required is characterised by a conflict of interests about When performing the services for the receipt which you should be informed, to ask the client and sending of orders, the execution of orders, to give its express confirmation or authorisation including through trading on its own account, as in order to proceed with the transaction. well as the placement and distribution of financial If you gave the order by telephone, the informa- instruments, investment services and financial in- tion about inappropriate transactions, conflict surance products, the Bank will provide you by of interest and the confirmation and authorisa- the next Working Day after the execution of the tion will be recorded on magnetic tape or on order or after the Bank received confirmation an equivalent back-up. You acknowledge such from the broker instructed to execute the order, forms and specifically accepts them in accord- with aspecific notice of written confirmation. That ance with current regulations. notice will contain the name of the Bank which is If you sent the order by a computer connected sending the communication, the name or other to the Internet or via other telematics, that infor- particulars that can identify you and information mation and the related confirmation and author- able to identify the transaction carried out en- isation will also be online, owing to a telematics visaged by current regulations. Amongst other procedure. You acknowledge those forms and things, the notice will give the following infor- specifically accept them in accordance with cur- mation, if relevant: the type (e.g. an order with rent regulations. a price limit or market price) and the nature of E.6 Transaction risks and the variable nature of the order; the day, time and place of execution; the value of the investments made the identity of the instrument, whether it is a pur- You acknowledge that each transaction it arrang- chase / sale or a different transaction, the quan- esin line with the Contract is carried out on its tity and price per unit of the financial instrument; behalf, at its expense and at its own risk. It de- the total reward; the total sum of commissions clares that it has been fully informed and is ful- and expenses charged; information if your coun- ly aware, including in relation to what is set out terparty is the Bank, another client of the bank in the information document which it received, or another broker who belongs to the same about the inherent risks in investments in finan- Group as the Bank (except where the order was cial instruments. You acknowledge that there is executed via a system which carries out anony- no guarantee that the value of the investments mous trading). In the case of a transaction where made will remain constant. the financial instrument involves settlement in a With regard to orders concerning financial instru- currency other than the settlement account, the ments not traded on a Trading Venue, other than above notice will be sent within the first work- Government stocks or securities guaranteed by ing day after the exchange rate has been fixed. the State, you recognise that such investments The confirmation notice is made available in the may involve: special area reserved for the client on the Bank’s - a risk that it may be difficult to liquidate them; website and the former may print it out. The - a lack of appropriate information which would documents mentioned in this point may also be make it possible to easily ascertain the current sent via telematics, using remote communication value. techniques, and in the form and ways allowed for E.7 Transactions geared to derivatives by the current provisions of laws and regulations As for the derivatives mentioned in Directive and, at any rate, by using technical resources 2014/65/EU, Section C of Annex I (4-10), you rec- which will enable you to obtain a hard copy. ognise that: The provisions of the above paragraph do not - The market value of such instruments is sub- apply to quotas or shares issued by Open-ended ject to market fluctuations; investment companies if the notices in question - Investments made on such instruments in- are sent to you directly by asset management volve the acceptance of a high risk of loss- companies or by ICVCs. es, the scale of which can even exceed the In relation to insurance products, the insurance

57 companies will directly provide periodic infor- the subject responsible for the placement and, mation in accordance with the terms of the in- based on the terms of applicable regulations and surance products.On your request, the Bank those instructions, provides to you and/or makes provides you with information about the status available to you the relevant documents of the of your order and the make-up, divided into in- offer.To accept each placement, you should sign dividual items, of the commissions and expenses the specific form prepared by the issuer, offeror mentioned in point E8. or subject responsible for the placement. The Bank makes available to you, every quarter You recognise that acceptance of the placement (on 31 March, 30 June or 30 September and 31 involves the application of the economic Con- December each year) or, if you choose, each ditions envisaged in the information prospectus month, a statement of the financial instruments about the financial instrument placed. and available funds held by the Bank. The state- A list of the main types of financial instruments ment will contain an itemisation of them at the placed appears in point C.1 above. end of the period covered by it. The statement As part of the placement service, the Bank may is available in electronic format in the special perform on your behalf continuous activity after reserved area on the Bank’s website and it can the placement. In accordance with the provisions be printed. You can also ask for a hard copy to of the agreements with the issuer and offeror be sent to its address. Moreover, all transactions companies, the Bank receives and forwards in securities and derivatives appear in a daily requests from you, even for transactions after statement, according to the value date, through the subscription, such as for example new con- a consultation document available in the special tributions, repayments or switch, and provides reserved area on the Bank’s website. The infor- assistance to you in that connection.The other mation given can be printed out.Every month, the provisions of Section I of the General Conditions Bank provides you with the following:- an itemi- of the Contract apply to the placement service, sation of the bonuses which the client earned as long as they are compatible with the relevant by taking part in active financing transactions regulatory rules and with the instructions given through securities (securities lending service, so- by the issuer and the subject responsible for the called “Interest-bearing portfolio”). That informa- placement. tion is available in electronic format in the special E.11 The terms of point F10 above apply to any bo- area reserved on the Bank’s website. The infor- nuses received by the Bank in connection with mation given can be printed out.On your written the performance of the placement service. request and expense, the Bank promptly makes Distribuzione di prodotti finanziari assicuratvi available the documents and records in its pos- The Bank distributes financial-insurance prod- session which concern you. ucts. When carrying out that activity, the Bank E.9 Bonuses observes the provisions found in article 84 of The Bank, may receive or pay compensation or the CONSOB Regulation on Intermediaries. In commissions or provide or receive non-mone- particular, it checks the appropriateness and tary benefits (incentives) from any person other observes the provisions in terms of conflicts of than the Customer or a person acting on their interest mentioned in point E.5 above. behalf, where payments or the benefits: You recognise that the subscription of financial a) have the purpose of increasing the quality of insurance products distributed by the Bank in- the service provided to the Customer; volves the application of the economic condi- b) do not prejudice the fulfillment of the obligations given in the documents prepared by the tion to act honestly, fairly and professionally, company which issued the financial products. in the best interests of the Client. The list of the main types of financial products The existence, nature and amount of the pay- distributed appears in point C.1 above. As part of ments or benefits or, if the amount can not be as- the distribution activity, the Bank – in compliance certained, the method of calculating this amount, with the terms of the agreements with the issu- will be clearly communicated to the Customer, in er companies – receives and forwards requests a complete, accurate and understandable way, from you, including in relation to transactions before provision of services governed by this after the subscription – for example, new con- contract. tributions, repayments or switch – by providing Any incentives that must be legitimately received assistance to you in that connection. or paid by the Bank in connection with the as- The provisions in point E.10 above apply to any sistance provided to the Customer subsequent bonuses which the Bank may receive for the dis- to the placement of financial instruments and the tribution of financial insurance products. distribution of insurance financial products will be notified in advance by the Bank to the Client in general or at the time of conferment of orders Annex IV and / or completion of individual operations. CLIENT CLASSIFICATION E.10 Placement service Information about the classification of the clients The placement service is geared to the Bank’s 1. Information about the classification categories activity to offer investment services and financial and the consequent level of protection Accord- instruments, financial insurance products, issued ing to the European Community provisions (Di- by Group companies and third companies to rective 2004/39/EC, so-called MiFID Directive), you. the Bank will classify Clients into the following When performing that service, the Bank heeds categories: the instructions of the issuer, the offeror and - Retail client;

58 - Professional client. Bank’s initiative or the client’s. - Eligible counterparty. The client, using a procedure illustrated on the Each category is afforded a different level of website www.finecobank.com in the reserved protection which influences, in particular, the area on the clients’ profiles, may ask the Bank obligations which every broker is expected to to move on to a more protected category (from satisfy. Professional clients are subjects with Professional Client to Retail Client) or to a less particular experience, skills and knowledge, so protected category (from Retail Client to Profes- it is assumed they are in a position to make con- sional Client on request). scious decisions about investments and to cor- In particular, in order to be recognised as a Pro- rectly assess the risks they accept. As a result, fessional Client on request, a Retail Client should for such clients, the regulation in question allows be able to prove that it meets at least two of the for a lower degree of protection in terms of the following requirements: assessments of adequacy and appropriateness 1) That it carried out significant transactions on and the obligations to provide information and the relevant market at an average frequency the written form of contracts. The rules which ap- of 10 transactions per quarter over the previ- ply have identified categories of subjects who, ous four quarters; by their very nature, should be regarded as pro- 2) Holds a portfolio of financial instruments with fessional clients: for example, banks, investment a value which exceeds 500,000 euros; companies, insurance companies, asset man- 3) Works or has worked in the financial sector agement companies, pension funds, institutional for at least one year in a professional posi- investors, foreign exchange brokers and large tion, which assumes knowledge of the trans- undertakings meeting two of the following size actions or services envisaged. requirements on a company basis: In the case of legal entities, the above assess- a) Balance sheet total not less than EUR ment is made in relation to the person authorised 20,000,000 to carry out transactions on their behalf and/or by b) Net turnover not less than EUR 40,000,000; the legal entity itself. c) Own funds not less than EUR 2,000,000. If a request is made to change the classification Retail clients – whether natural persons or legal made by the client, the Bank will assess it and is entities – who meet certain requirements may able to accept it or otherwise. In the case of le- apply to be treated as professional clients (so- gal entities, the assessment is made with regard called “professionals on request”). to the person authorised to carry out transac- Eligible counterparties are a sub-set of the cate- tions on their behalf and/or the legal entity. The gory ofprofessional clients. It appears only with Bank will notify the client of the outcome of its regard to the provision of services for the execu- assessment. In any case, professional clients are tion of orders, trading on their own account and expected to inform the Bank about any change the receipt / sending of orders and supplemen- which could affect their current categorisation. tary, related services. The rules of conduct envisaged for the other categories of investors do not Annex V apply to that client’s category. Retail clients are all those clients not classified DEPOSITOR INFORMATION TEMPLATE as eligible counterparties and as professional cli- Depositor Information Template ents. Basic information about the protection of deposit Retail clients are afforded the maximum protection with regard, in particular, to the fullness of Deposits in F.I.T.D. - Fondo Interbancario di FinecoBank S.p.A. Tutela dei Depositi ( 1 ) information which the Bank should give to them, are protected by: the carrying out of “suitability” and “appropriateness” checks on the services to be provided to EUR 100 000 per depositor per Limit of protection: them, and the execution of orders in financial in- credit institution ( 2 ) struments under the most favourable conditions (so-called best execution). If you have more All your deposits at the same 2. Initial classification deposits at the credit institution are ‘aggregat- The Bank, when it sends the notice about the same credit ed’ and the total is subject to opening of the current account and before it institution: the limit of EUR 100 000 ( 2 ) starts to provide the investment services, will notify the classification given to the client and If you have a joint The limit of EUR 100 000 account with other applies to each depositor inform it, at the same time, of any right to ask person(s): separately ( 3 ) for a different classification and any limits arising from the protection awarded. Retail clients rep- Reimbursement resent the majority of FinecoBank clients which, period in case of 20 working days ( 4 ) therefore, allows for a general application of the credit institution’s protections and compliance arising from that failure: maximum level of protection. However, it is an- Currency of ticipated that, if a Professional Client expresses a Euro or Pound sterling (GBP, £) reimbursement: clear intention to act as such when it enters into relations with the Bank, the latter will classify it as Fondo Interbancario di Tutela such. dei Depositi Via del Plebiscito, Contact: 3. Changes to the classification 102 - Roma - Tel. 06-699861 / The regulation allows the classification original- Fax 06-6798916 [email protected]. ly given to clients to be changed, on either the

59 More information: http://www.fitd.it dence or dwelling; b) a death, or the depositor’s marriage or civil Acknowledge- partnership, divorce, retirement, dismissal, ment of receipt by See Account Application Form redundancy or invalidity; the depositor: c) the payment to the depositor of insurance benefits or compensation for criminal injuries Additional information (all or some of the below) or wrongful conviction. More information can be obtained under ( 1 ) Scheme responsible for the protection of your http:// www.fitd.it. deposit ( 4 ) Reimbursement Your deposit is covered by a statutory Depos- The responsible Deposit Guarantee Scheme is it Guarantee Scheme. In addition, your credit Fondo Interbancario di Tutela dei Depositi Via institution is part of an Institutional Protection del Plebiscito, 102 - Roma - Tel. 06-699861 / Fax Scheme in which all members mutually support 06-6798916 [email protected] http://www.fitd.it. It will each other in order to avoid insolvency. If in- repay your eligible deposits (up to EUR 100 000) solvency should occur, your deposits would be within 20 working days until 31 December 2018; repaid up to EUR 100 000 by the Deposit Guar- within 15 working days from 1 January 2019 until antee Scheme. 31 December 2020; within 10 working days from 1 ( 2 ) General limit of protection January 2021 to 31 December 2023; and within 7 If a deposit is unavailable because a credit insti- working days from 1 January 2024 onwards, save tution is unable to meet its financial obligations, where specific exceptions apply. depositors are repaid by a Deposit Guarantee Where the Deposit Guarantee Scheme cannot Scheme. This repayment covers at maximum make the repayable amount within 7 working EUR 100 000 per credit institution. This means days, it will, from 1 June 2016 until 31 December that all deposits at the same credit institution are 2023, ensure that you have access to an appro- added up in order to determine the coverage priate amount of your covered deposits to cover level. If, for instance a depositor holds a savings the cost of living (in the case of a depositor which account with EUR 90 000 and a current account is an individual) or to cover necessary business with EUR 20 000, he or she will only be repaid expenses or operating costs (in the case of a de- EUR 100 000. positor which is not an individual or a large com- ( 3 ) Limit of protection for joint accounts pany) within 5 working days of a request. Again, In case of joint accounts, the limit of EUR 100 000 there are specific exceptions to this obligation. applies to each depositor. If you have not been repaid within these dead- However, deposits in an account to which two lines, you should contact the Deposit Guarantee or more persons are entitled as members of a Scheme since the time to claim reimbursement business partnership, association or grouping may be barred after a certain time limit. Further of a similar nature, without legal personality, are information can be obtained under http://www. aggregated and treated as if made by a single fitd.it. depositor for the purpose of calculating the limit of EUR 100 000. Other important information In some cases eligible deposits which are cate- In general, all retail depositors and businesses gorized as ‘temporary high balance’ are protect- are covered by Deposit Guarantee Schemes. ed above EUR 100 000 for nine months after the Exceptions for certain deposits are stated on the amount has been credited or from the moment website of the responsible Deposit Guarantee when such eligible deposits become legally Scheme. Your credit institution will also inform transferable. These are eligible deposits con- you on request whether certain products are nected with certain events including: covered or not. If deposits are covered, the cred- a) certain transactions relating to the deposi- it institution shall also confirm this on the state- tor’s current or prospective only or main resi- ment of account.

60 NOTE

61 FinecoBank S.p.A. - Registered Office Piazza Durante 11, Milan 20131 – Headquarters Via Rivoluzione d’Ottobre 16, Reggio Emilia 42123 – Share capital € 201.152.834,19, fully subscribed and paid-in – Bank enrolled in the Register of Banks and Parent Company of the FinecoBank Banking Group – enrolled in the Register of Banking Groups at No. 3015 – VAT No. 12962340159 - Tax ID No. and Milan-Monza- Brianza-Lodi Companies Register No. 01392970404 – Economic and Administrative Index (REA) No. 1598155 – Member of the National Compensation Fund and the National Interbank Deposit Guarantee Fund. - PEC: [email protected]. Authorised by the Bank of Italy and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request

MF02111UK - 03/2020 November 2020 finecobank.com