DNB FX Trader Service Agreement

This service agreement (“The Agreement”) on trading financial contracts for difference (CFDs) in currencies through DNB FX Trader is entered into between DNB Markets, part of DNB Bank ASA (“DNB”) and the customer. Access to the DNB FX Trader service is based on DNB’s approval of the customer’s application to use the service.

DNB will classify all customers in accordance with the provisions of the Norwegian Securities Trading Act. Whether the customer is a professional or a non-professional will determine which service DNB can offer. Only retail clients are given negative balance protection and are exclusively offered order execution. Only professional customers are offered advisory services from brokers.

The service is only offered in Norwegian.

The full agreement is as follows:

A. This agreement

B. DNB Markets General Business Terms and Conditions for Financial Instruments etc.

C. Other terms and conditions published by DNB in the online bank in connection with this service

The agreement requires the customer to use DNB’s online bank. Information about the service, regulatory framework and assistance is provided in the online bank.

DNB can, without notice, change the terms and conditions of the agreement or withdraw the customer’s access to the service, e.g. if the customer has been inactive for a long period. The customer is responsible for staying up-to-date with any changes to the service which will be published through the online bank or directly to the individual customer, including via email, and to follow these when trading.

For conditions or circumstances not regulated by this Agreement, DNB Bank ASA’s General Business Terms and Conditions for Financial Instruments etc. will apply as far as these are suitable.

The service is separate from any other dealings the customer may have with DNB and therefore cannot be used for regular foreign currency exchange.

The customer must not use the service until the customer has carefully gone through the Agreement with the current underlying agreements and appendices as stated above. If the Customer is unsure of how to use the service or has any questions, the customer must not make any trades, but should contact DNB Markets FX Trader IT Support for more information and guidance.

About using the service – margin account – mortgaging

Access to the service is provided through the online bank based on DNB’s assessment of the customer’s financial situation, knowledge and experience. The service is therefore only for personal use. All trades that are entered into by using the customer’s online bank are the customer’s own responsibility, regardless of who has used the service.

The service gives access to exposure to changes in one or more currency pairs with combinations of the currency types that are available in the service at any one time. Exposure is taken on in the form of trades where the customer establishes positions by buying/selling currency. DNB is the counterpart in all of the customer’s trades, and the positions can neither be transferred to others or closed in any other way than through DNB’s service. If the customer does not close the position, it will be rolled to the next day.

In this way, the customer takes on continuous exposure in the relevant currency pair(s). The result of positions that are rolled from one day to the next, or positions that are closed, is posted in the margin account.

Positions can also be established or closed through trades that the customer enters as conditional orders. Among other things, orders can be used to limit losses or take profits on a position in a given exchange rate. More detailed terms and conditions for using orders are provided in information in the online bank.

The customer must not use orders before these terms and conditions have been carefully reviewed and understood. This also includes the customer’s assessment of the need to add funds to the margin account when entering orders to avoid breaching margin requirements with the closure of the customer’s positions as a result of new positions being established by entered orders being filled.

Once the service is set up, a margin account will be established in the customer’s name in Norwegian kroner (NOK). The margin account will be accessible through the online bank. There will be requirements on baseline security on margin accounts in order for the customer to be able to enter into or maintain positions that provide exposure to changes in exchange rates.

Upon entering into the Agreement, the amount deposited in the margin account at any one time is pledged in favour of DNB as security for the Agreement with the trades with their associated positions that are entered into by using the service, cf. Section 4-4 of the Norwegian Mortgages and Pledges Act. The pledge also includes interest that is charged to the margin account. Notification of the pledge, with the establishment of legal protection, will be set up when entering into the Agreement, cf. Section 4-5 of the Norwegian Mortgages and Pledges Act. The pledge is confirmed when the customer signs the Agreement.

The margin account is blocked from withdrawals by the customer and can only be used by DNB as stated in this Agreement. In the event of any contradiction between the terms and conditions given in the Agreement and the account agreement, the Agreement’s provisions shall apply. Withdrawals from the margin account to another account can be made by DNB at the customer’s request and are dependent on sufficient funds being in the account to meet the security requirements. Information about amounts in the margin account is available in the service in the online bank. The amount in the account changes from day to day through DNB’s posting of results of the customer’s FX positions against the account.

When entering into the Agreement, the customer gives DNB the right to reserve (block) the margin account for the margin requirements that executed trades, with their associated positions, involve, and to credit and charge the margin account for rolling positions to the next day. Amounts calculated for the individual positions and trades to be posted against the margin account are finally established by DNB based on interest rate differences for the relevant currency pairs in each trade, plus margin. More information on this is given in the online bank.

The customer’s ability to take positions will depend on amounts in the margin account and the customer’s FX positions. Deposit requirements in the margin account differ depending on the different currencies that can be traded using the services.

The customer can use the service to enter into trades with an overall amount that is significantly larger than the amount deposited in the margin account. This ratio, i.e. the size of the customer’s overall FX positions measured against the deposit in the margin account, is usually referred to as leverage. Currency pairs that historically have large rate changes are normally given a lower leverage ratio than a currency pair with smaller price movements. Trading a currency with a low leverage ratio will thus place larger requirements on the deposit in the margin account than a currency pair with a high leverage ratio. Since the leverage ratio is based on historical price movements, these can regularly change. The leverage ratio used for the individual currency pair at any one time is therefore specified in the service. The impact on profits of the customer’s positions will be monitored at all times and measured against current market prices. A summary of positions, details of market prices, prices of executed trades and rolls as well as margin requirements will be shown in the service.

It is the customer’s responsibility to continuously monitor changes in margin requirements and to always ensure that there are sufficient funds in the margin account in order to cover margin requirements. By entering into this Agreement, the customer accepts that DNB has the right to close all of the customer’s positions without special prior notice if the margin requirement is breached. DNB will try to send warnings to the customer by email as a reminder that the customer should consider closing positions and/or add more funds to the margin account. Emails will be sent to the email address specified in the application form for the service, or to any other email address provided to DNB in writing. However, not receiving a margin warning by email does not exempt the customer from the obligation to fulfil the margin requirements. In unusual market situations with large price movements, losses and thereby breaches of margin requirements can also occur so quickly that margin warnings are not practical. Regardless of whether or not a warning is sent, the customer is responsible for losses sustained from closing the customer’s positions.

If the balance of the margin account is less than 100 per cent of the total margin requirement for the customer’s position, the customer can only reduce their positions, not establish new positions.

If the balance of the margin account is less than 50 per cent of the total margin requirement calculated by DNB based on the customer’s positions, DNB will close all open positions on the customer’s behalf and at the customer’s risk as soon as practically possible. All active orders submitted by the customer will also be cancelled.

DNB also has the right to terminate the service and close all positions if there are not enough funds in the margin account, and, as stated above, the right to terminate the service in the event of a breach.

A breach will have occurred if:

▪▪ the customer breaches the Agreement or any other obligation or contract with DNB;

▪▪ the customer has given false or deficient information in regard to circumstances of significance for entering into the Agreement in the application, or in any other manner, or significant changes have taken place in these circumstances, and this has not been reported to DNB;

▪▪ the customer dies, enters into special agreements with their creditors on payment postponements, becomes insolvent, initiates debt negotiations of any kind, suspends their payments or enters into bankruptcy proceedings or public administration.

In the event of a breach, DNB will settle the result of the customer’s positions against the margin account. Any submitted orders will be cancelled. When closing positions, DNB will safeguard the customer’s interests by ensuring that the positions are closed on the basis of prices that are reasonable in the market conditions. The customer’s liability for losses when positions are closed is not limited to the amount deposited in the margin account.

Costs – DNB profits

There are no costs involved for the Customer to set up the service.

DNB will cover its costs to operate the service and will take profits from a share of the difference between the buy and sell price offered to the customer. This difference may vary for different currency pairs and depending on the situation in the market. In addition, the bank accrues a spread when settling the customer’s FX positions at the end of each day. This is shown in the online bank. DNB will provide details of the costs of each individual trade and provide totals through annual reporting.

Risk

Trading through the service is based on the customer’s balance in the margin account. By using the service, the customer can gain exposure to significantly higher nominal amounts than their balance. In certain cases, therefore, the customer’s losses can also exceed the balance in the margin account.

In unusual market conditions, and also in other situations, it may be difficult or impossible to execute trades so the customer cannot establish or close a position or submit an order.

The customer is responsible for all submitted orders and established positions, and for ensuring there are sufficient funds in the margin account. The customer must be aware that the margin requirement can change quickly and that in some situations the service may be unavailable. DNB is in no way liable for losses that result from situations that prevent the registration or execution of orders or deposits in margin accounts.

Changes in foreign exchange rates may occur without prior warning. Historical changes, FX forecasts and market assessments do not provide certainty about future price changes and should therefore not be considered as recommendations for taking positions. All currency positions and orders made through the service are thus the customer’s responsibility and at their own risk.

Professional customers’ liability for losses linked to using the service is not limited to the amount deposited in the margin account. Among other things, larger price changes under unusual market conditions may result in losses after covering positions after margin breaches which exceed the amount deposited in the margin account. Retail clients are given negative balance protection as part of the service.

The customer must regularly evaluate their results and risk associated with the use of the service and, if necessary, close or reduce their positions.

DNB is not liable for losses resulting from unforeseen events, including power cuts, faults or breaches in electronic data processing systems or telecommunications networks and the like, fire, water damage, strikes, legislative amendments, orders from the authorities or similar circumstances. In general, we refer to our terms and conditions for using the online bank which are part of the Agreement.

Notifications after the Agreement – IT Support

Questions or assistance requirements for using the service can be directed to DNB Markets FX Trader IT Support. More details about this can be found on the fact sheet.

Notifications from DNB by email, including margin warnings, will be sent to the email address that the customer has provided in the application form. Any changes to the email address must be reported to DNB Markets FX Trader IT Support.

Declarations

By signing the Agreement/application in the online bank, I hereby confirm:

▪▪ that I have provided correct details on the application form and that I will inform DNB if any changes occur to these circumstances after the service has been taken into use;

▪▪ that I have read and understood the Agreement and accept the risk associated with using the service;

▪▪ that I understand the need for an ongoing evaluation of results achieved and for making any changes in order to ensure the trade at all times is suitable for my financial position and overall situation;

▪▪ that I understand that changes in foreign exchange rates may occur without prior warning and that historical changes, FX forecasts and market assessments do not provide certainty about future price changes and should therefore should not be considered as recommendations for taking positions;

▪▪ my responsibility for meeting the deposit requirements in the margin account at all times and DNB’s right to close all positions on my behalf and at my risk, without warning, if the deposit requirement in the margin account is not met;

▪▪ the pledge of the margin account.

DNB has the right, but not the obligation, to regularly monitor my use of DNB FX Trader. I undertake to continuously assess the scope and results of my trades and in this regard to seek the necessary advice from DNB or a third party.