Management agreement for trading in international securities - Online trading

The following agreement (“the Agreement”) is entered into between DNB Bank ASA (“DNB”) via DNB Markets (“DNB Markets”) and the customer (“the Customer”) in regard to online trading of international securities under the “Agreement for online trading of financial instruments etc.”

In this agreement, international securities will be financial instruments registered abroad and made available for online trading on DNB’s online platforms, hereinafter referred to as International Securities. The management agreement will hereinafter be referred to as the Agreement.

1. What the agreement applies to and does not apply to

The agreement applies to the parties’ rights and obligations in the administrative area related to delivery and payment for the Customer’s online sales and purchases, including subscription to secondary offerings and share issues etc., hereinafter referred to as Management, and storage of International Securities that are given to Managers to administer. The Management the Customer uses under the “Agreement for online trading of financial instruments etc.”, hereinafter referred to as Online Management, will be transferred to the Manager automatically. Managers do not act as brokers, investment advisers, active managers, clearing houses etc. under the Agreement.

It is up to the customer to decide which Management will be used for the available securities, including the type, quantity, composition, currency/market etc.

The agreement only applies to the markets that are made available for Online Management. If the Customer would like management of securities in other markets, the Customer must enter into a management agreement with DNB Bank ASA for international securities that are not tied to online trading.

Managers have the right to refuse funds and securities for management and have the right to refuse to carry out instructions and other obligations under the Agreement when the Manager has reason to assume that management or execution of instructions or obligations will lead to a breach of rules or market practice for the market in question, the request is rejected by an international manager or for any other objective reason.

The customer understands that the following is not included in the Agreement:

• The Customer will not be able to exercise their voting rights at issuers’ AGMs or any other voting rights for the securities the Customer has under the Agreement.
• Managers will not apply for tax refunds on the Customer’s behalf under the Agreement.
• The Customer will not be able to choose to receive dividend securities but will always have to select cash disbursements where a right to vote is granted.
• Subscription rights will always expire unless, by a deadline set by the Manager, the Customer has provided necessary subscription instructions. Any purchase of subscription rights or sale of received subscription rights must be made by the Customer themselves.

However, the customer can give the Manager instructions on voting rights and tax refunds, at prices that are in accordance with the price list.

2. Nominee account and bank account

The Manager will create a nominee account in the Customer’s name. The nominee account must always state which International Securities the Manager possesses on behalf of the Customer and must show all transactions under the Agreement. How the International Securities are stored and/or registered will depend on the market in question. As a rule, the securities will be registered in the Manager’s name, labelled “DNB Clients”. The accounts the securities are registered in abroad will often be the same for several customers so separate accounts will not be created for each customer.

The bank account used for the “Agreement for online trading of financial instruments etc.” will also be associated with the nominee account. The Customer hereby accepts that the Agreement entails that the Customer gives the Manager management authority over this bank account, limited to that which is specifically regulated by the Agreement, so the Manager will debit/credit the Customer’s bank account. For conditions or circumstances not regulated by this Agreement, refer to “Agreement for online trading of financial instruments etc.”.

Settlement when buying or selling International Securities online will be debited from/credited to the above bank account, which is an account in Norwegian kroner. Amounts that are debited/credited will be converted from the currency in question to Norwegian kroner at the prevailing rates for international payment orders in DNB. The Customer understands that the exchange rate given when placing the order may be indicative and therefore differ from the final exchange rate.

Where agreed, bank accounts in foreign currencies can be used as accounts for disbursements of returns. In this case, the customer must have set up this account and advise the Manager that this account will be used. When changing bank accounts associated with the nominee account, the Customer must notify the Manager of this in writing by email (see item 15). Any changes will take effect after the Manager has received and implemented the notification. If the Customer has not connected the foreign currency account to the nominee account, the received return will be converted to Norwegian kroner and credited to the bank account in Norwegian kroner.

3. Customer’s responsibilities

The Customer is responsible for ensuring that the Customer’s entering into and compliance with the Agreement is in accordance with the currently applicable rules, articles of association, guidelines etc. that apply to the Customer. If the Manager so requires, the Customer shall, at the time of entering into the agreement or at a later date, present board decisions or the equivalent as documentation for any necessary authorisation.

The Customer is also responsible for ensuring that cash funds and securities managed by the Manager under the Agreement at any time are free of charges of any type, such as pledges, possessory liens, freezing of assets etc.

4. Manager’s responsibilities

4.1

The Manager shall inform the international manager that the Manager uses that the Customer’s securities, as long as it is possible under local law, must be held separately from securities that the Manager has proprietary rights to, and the Manager must at all times register which securities belong to the Customer.

4.2

The Manager shall specify that securities must be held separately from securities that belong to the foreign managers that the Manager uses. However, it may be the case that local laws, provisions, regulations, market practice etc. involve a different form of registration.

4.3

Unless otherwise stated in other agreements, securities that are managed in accordance with the Agreement cannot be used to cover the Manager’s claim against the Customer or to cover claims from the Manager’s creditors, although in accordance with the management authority, the Manager can cover claims as per the Agreement’s price list.

4.4

At any time, the Customer can manage the securities using Online Management or by instructing the Manager without any form of special payment to the Manager, apart from the Manager’s claims as per the price list under the Agreement.

5. The Customer’s instructions and other notifications

5.1

Any instructions beyond the Online Management must be provided as stated in item 15. The Manager is entitled to trust instructions given in such an agreed way and assume that they are given by the Customer.

5.2

The Customer understands that instructions, including Online Management, will be carried out in accordance with the prevailing rules and legislation and in accordance with procedures and market practice on the relevant stock market, billing and settlement system, securities register and market where the individual trade will be made.

5.3

Instructions, including Online Management, will be carried out on banking days during the Manager’s normal working hours (regular time and summer time) and according to any of the Manager’s and the relevant market’s cut-off times and provided that it is also during normal office hours and a “business day” in the relevant market where the instructions are to be implemented. Implementation times will depend on the market to which instructions are sent.

5.4

If the Manager has reason to regard received instructions as unclear or to doubt that they come from the Customer, the Manager has the right to not carry out the instructions. The Manager must then immediately inform the Customer of this.

6. Manager’s obligations

6.1

Without instructions from the Customer, the Manager shall have the following management authority and obligations under the Agreement:

• With Online Management, or after receiving information in accordance with item 7, to ensure that the securities are transported in a satisfactory way with legal protection. As a rule, this will be a simultaneous delivery and payment, but it is hereby assumed that the Customer understands that for some transactions and in some markets, settlement will not be made in a way as to result in simultaneous delivery and payment. This will apply even in cases where the Customer has provided instructions for simultaneous delivery and payment.
• With Online Management, to make/receive payment and supply/receive securities.
• To carry out such other credits and debits against the Customer’s bank account to cover claims as per the price list to which the Customer’s instructions give rise.
• To receive and credit the Customer’s bank account for all returns on the securities.
• To forward to the Customer information that the Manager has received in accordance with share issues, share splits etc. and other changes of an administrative nature regarding the individual security as soon as this is received by the Manager.
• To arrange switching of temporary securities to final securities.
• To take care of all reporting to Norges Bank.

6.2

The Manager only has the right to carry out the following after receipt of and in accordance with the Customer’s instructions:

• Trade conversions, subscription rights or other discretionary rights that apply to the managed securities, cf. however item 1.

Besides that stated in item 6.1, the Manager is only responsible for the execution of the obligations specified in the Agreement.

7. The Customer’s obligations

1. In addition to Online Management, the Customer must give any instructions under the Agreement to Managers with enough notice so Managers can reasonably carry out the instructions.
2. The Customer must immediately inform the Manager of any Management, other transaction or other matter besides Online Management with automatic updates.
3. The Customer shall regularly check the ‘available portfolio’ against the holdings overview and their own notes, cf. “Agreement for online trading of financial instruments etc.”, and immediately inform the Manager of any inconsistencies. In doing so, the Customer must be particularly aware of any company events in the securities the Customer owns, such as splits and reverse splits, as the nominee account will not be reconciled against the foreign depository/register until the settlement date and not on the trade date.
4. The Customer must give the Manager evidence of their taxpayer status and domicile, and must present commercial paper, escrow funds or other information or documents that Managers may reasonably need to comply with the Agreement, the current rules and legislation, regulatory requirements etc.

8. Brokerage fees, commissions, costs etc.

DNB Markets takes payment for executing the Customer’s orders in the form of brokerage fees. Brokerage fees will be charged at the currently applicable rate for the Customer to buy/sell financial instruments online through DNB Markets. The brokerage rates can change with immediate effect from the date the information on price changes is reported to the Customer or posted on DNB’s website. For International Securities and for unlisted financial instruments, higher rates may apply than for instruments listed on the Oslo Stock Exchange.

When subscribing, any subscription costs will be shown in the information posted online for the relevant sale, share issue etc.

Costs involved in opening, holding, managing or closing the bank account, interest rates, interest rate calculation etc., are stated in DNB’s General terms and conditions for deposits and payment orders, DNB’s applicable price list, account information and/or reported in any other way. The costs associated with VPS accounts and nominee accounts will be stated in the agreement for that specific account.

9. Payment and prices of payable services

The Customer must pay the currently applicable prices for the different payable services that DNB Markets offers under the agreement and which the Customer has chosen to use. The currently applicable prices will be shown on DNB’s website.

10. Payment and bookkeeping

When the Customer enters an order under the agreement for purchasing financial instruments and when the Customer uses the payable services under the agreement, the bank account that Customer has opened under

the Agreement will be charged in accordance with the order or the service(s) and thereby involve limited management authority over the bank account for DNB Markets. When entering into a secondary offering, share issues etc., the Customer must grant a separate debit authorisation. The Customer accepts that no special prior notice will be given for such charges. For charges related to the Customer’s use of payable services, the charges will appear on the bank statements in the normal way. When buying financial instruments, the amount charged to the bank account will be shown on the contract note. When subscribing, the amount charged to the bank account will be shown on the award confirmation. Information can also be sought through the online channels the Customer uses.

Net amounts from sales orders for financial instruments under the Agreement will be posted to the bank account by DNB Markets under the agreement per settlement date. The net amount posted to the bank account will be shown on the contract note. The net amount will normally be available in the bank account immediately; however, it will only be available for reinvestment in new securities covered by the agreement. If the available net amount in the bank account after the sale of securities is used before the settlement date, for any other payment services that apply for the bank account, including withdrawals and payment transfers, the Customer’s bank account will become overdrawn. This also applies to reinvesting in markets with shorter settlement periods. In this case, the Customer will be charged overdraft interest as specified in DNB’s general terms and conditions for deposits and payment orders and DNB’s applicable price list. The Customer’s use of amounts that are available under the Agreement but are not entered into accounts, will be considered a material breach of the agreement.

11. Disclosure of information, rules and legislation

The Customer accepts that the Customer does not have the right to disclose to others – electronically or otherwise – information obtained under the agreement. This applies to information of any kind from payable services to any free information, and whether the information is passed on in the processed or unprocessed form and whether it has been obtained directly or indirectly via other customers.

The Customer is responsible for following the currently applicable laws, rules, market practice etc. in Norway and abroad for trading financial instruments, including rules on rate manipulation and insider dealing.

12. Control and suspension

If there are any technical errors of any kind, security problems or other circumstances at DNB Markets, with customers or otherwise, DNB Markets reserves the right to suspend the agreement resulting in the service being interrupted, without the Customer having the right to financial compensation for this period. Any such suspension will apply until the actual cause of the suspension is corrected or until the Agreement is cancelled with immediate effect. In accordance with the different rules and legislation, DNB Markets reserves the right to take control of procedures, systems, data connections and other matters associated with the Customer’s automatic order execution.

The different market places may, according to the different rules and legislation and in the case of other criteria, have the right to stop automatic order execution from DNB Markets and/or other members.

13. Changes to framework conditions and applicable agreements

In the event of a change to legislation, rules, agreement terms and conditions or decisions in the marketplaces in question, new internal rules, technical changes, technical developments or other objective reasons, DNB Markets may need to change the Agreement. The changes take effect from the date on which the new terms and conditions are imposed upon the Customer. New agreements will be sent to the customer by regular post, email or otherwise in accordance with DNB’s procedures. The Agreement is binding for the Customer when the Customer, after having received the amended version from DNB, submits online orders to, enters agreements or executes online trades with the investment firm. Online orders, trades etc. that are entered into or executed before the new terms and conditions are sent to the Customer or accrued claims or rights will not be affected by the changes in question, unless laws, rules and legislation, instructions etc. establish an earlier effective date.

14. Consent for customer orders to be executed outside of regulated markets or Multilateral Trading Facilities

The Customer consents to order execution being made outside of regulated markets or Multilateral Trading Facilities, and to other points in DNB Markets’ Guidelines for order execution in financial instruments, see DNB’s web pages about the MiFID requirements.

15. Termination and cancellation

The Agreement can be cancelled with at least one month’s written notice. Termination notification is made by regular post or email. In the event of a material breach by one of the parties, including that the party is subject to debt negotiations or bankruptcy, the Agreement can be cancelled by the non-offending party with immediate effect.

16. Law and jurisdiction

The Agreement is subject to Norwegian law.

Unless otherwise stated by the Financial Contracts Act, all disputes under the Agreement shall be settled in the Oslo District Court, which is hereby adopted as the legal venue.