Order Execution Policy

1. Purpose of this policy

1.1 Introduction to DNB and legal background

DNB Bank ASA (“DNB”) is an investment firm, licensed to perform investment services by the Norwegian Financial Supervisory Authority. In DNB, Investment banking activities are performed by the business areas DNB Carnegie and Wealth Management. In this document, DNB refers to activities in the business areas DNB Carnegie and Wealth Management.

Legal requirements for investment firms are set out in the EU Directive MiFID II.[1] This order execution policy is based on the requirements in MiFID II and defines best execution, describes various order types and trading venues, and specifies how DNB has organised trading in financial instruments to deliver best execution to our clients.

[1]Directive 2014/64/EU of the European Parliament and of the Council of 15 May 2014

1.2 What is Best Execution

Best execution is the requirement for DNB to take all sufficient steps to obtain the best possible result for our clients when acting on their behalf, taking into account relevant factors includingprice, cost, market impact, speed of execution, likelihood of execution and settlement, order size, and type, as well as any other relevant considerations. The relative importance of these factors may vary depending on the specific characteristics of the client order and the financial instrument involved.

The best execution provisions stated in this policy do not mean that DNB will achieve best execution on every single occasion but reflects our policy to ensure best execution on a consistent basis. In addition to our best execution obligations, DNB is bound by the overarching principle to act honestly, fairly and professionally in the best interest of our clients.

2. Scope of this policy

This policy applies to clients classified by DNB as Retail or Professional and is valid for DNB Bank ASA and its international branches.

Best execution rules applies when the client is relying on DNB to act in the client’s interest. If the client give DNB specific instructions, Best Execution will not apply to these instructions but may apply to other parts of the transaction.

For retail clients DNB will generally always owe best execution, unless DNB receive specific instructions from the client. For professional clients DNBs duty to owe best execution will typically apply when DNB are executing orders on the client’s behalf, but rarely when DNB respond to a request for quote (RFQ) as described later in this policy. Eligible counterparties are out of scope for best execution unless agreed otherwise.

The best execution obligation only applies to financial instruments captured under MiFID II such as equities, bonds, ETFs, money market instruments, interest rate-, foreign exchange- and commodities derivatives.

Best execution does not apply to for example, FX spot, deposits, loans, repos, and securities financing transactions that are not deemed financial instruments.

This Best execution applies when DNB performs the following investment services on the clients behalf in connection with financial instruments:

• Execution of orders
• Reception and transmissions of orders
• Dealing on own account

For Retail clients, best execution is determined on the basis of total consideration which includes the price of the financial instrument and related execution costs. While speed, likelihood of execution, and market impact are also important, these factors only take precedence if they contribute to achieving the best result in terms of total consideration for the client.

3. Methods for executing client orders

DNB may use one or a combination of different methods of execution and act in different trading capacities to ensure best execution for our clients.The execution method typically depends on the financial instrument in question.

For equities, DNB usually trade on behalf of clients, dealing as agent or trading on a matched principal basis. When acting as an agent, DNB will choose the venues that on a consistent basis ensure best execution.

For bonds, interest rate derivatives, foreign exchange derivatives, commodity derivatives and equity derivatives DNB typically trade as principal, including in a matched and/or riskless capacity.

When dealing on own account DNB will use the Exceptions Test (see section 4) to determine whether DNB owe best execution obligations to the client.

For further details on execution practices for relevant instruments, please see Appendix 1 hereto.

4. Exceptions test

The requirement to provide best execution is subject to certain exceptions. These are situations where the client do not rely on DNB to provide best execution. This may in particular be the case in quote-driven markets as described below.

As a starting point, Best Execution is assumed to apply when a retail client accepts a quote. However, if the 4-fold test indicates that the retail client does not rely on DNB to protectits interests in relation to the execution of the transaction, Best Execution does not apply.

Best Execution does not apply to professional clients accepting a quote, unless the 4-fold test indicates that the client relies on DNB to protect its interests.

Best Execution normally applies when the relevant instrument is traded in an order-driven market. Here Best Execution applies unless the retail client gives specific instructions or indicates, that it does not rely on DNB to protect its interests.

Best Execution also applies to professional clients in order driven markets unless the 4-fold test indicates that the client does not depend on DNB to protect its interests.

If the client is a Retail client, the assumption will thus always be that the client is owed Best Execution, while if the client, as a professional client, trade based on a quote provided by us, the assumption will be that the client do not rely on DNB to provide best execution.

These assumptions will be checked against the so-called four-fold cumulative test, suggested by the European Commission[1] to establish whether the client may rely on DNB to provide best execution. The four-fold cumulative test encompasses the following criteria, which must all be considered and factored into the decision on whether Best Execution applies. Meeting one criteria can be enough to decide whether Best Execution apply, but argument is stronger if more criteria apply.

[1] European Commission: Working Document (ESC-07-2007): Commission answers to CESR scope issues under MiFID and the implementing directive

5. Timing of the execution of orders

In cases where a client does not give specific instructions, DNB will disclose and commence the execution of the order immediately after receipt of the order from the client. This means that DNB will process incoming orders based on time priority unless DNB considers that Best Execution can be achieved by combining an order with other orders. DNB reserves the right to aggregate client orders with orders from other clients, individuals or companies associated with or not associated with DNB. The aggregation of orders may take place if it is unlikely that aggregation in general will entail a disadvantage for clients. However, clients are made aware that the aggregation of orders in certain cases may entail a disadvantage.

DNB reserves the right to aggregate client orders with transactions made for DNB's own account. If the total order is only partially executed, client’s orders will be given priority over DNB's orders. However, exceptions apply if DNB is not able to trade under corresponding favourable conditions without aggregation.

If orders are received outside the marketplace’s opening hours, orders will normally be executed when the marketplace reopens.

6. Pricing when asked to provide a quote

DNB will seek to quote an all-in price, consisting of the bid/ask price DNB would obtain under the prevailing market conditions, and a margin.

7. Execution venues and counterparties

DNB will seek to use the execution venues that enable us to provide our clients with the best possible result on a continuous basis. For certain instruments, there may only be one execution venue available. When executing a trade in such circumstances, DNB will assume that the selection of that venue satisfies the best execution factor regarding venue selection. DNB could also, where DNB find it beneficiary for the client, execute orders outside a Regulated Market or Multilateral Trading Facility.

Relevant types of execution venues are:

• Regulated Market (RM)
• Multilateral Trading Facility (MTF)
• Systematic Internaliser (SI)
• Market Maker (MM)
• Other Liquidity Provider (OLP)
• Organised trading facility (OTF) - for non-equity instruments

DNB will for some financial instruments take the position as SI, Market Maker, or provide liquidity by quoting prices. This will involve DNB acting as principal. Orders executed through these execution venues will be subject to the same best execution requirement as other orders, in accordance with this policy. Transactions may be executed with third parties, against own account, and be crossed with another clients’ order.

8. Acceptance

When signing DNB’s client agreement, new clients are asked to accept DNB’s order execution policy. Later updates of the execution policy will be handled as follows.

• Minor changes to the order execution policy will be published on DNB’s website. Clients will not receive any notification.
• Material changes will require a notification to clients. Notifications will be sent by email only, and clients are responsible for providing DNB with an updated email address.

Clients who place orders or request a quote with DNB will be deemed to have accepted the prevailing order execution policy.

9. Adverse conditions in the market or in systems

Should external conditions occur in the market or in technical systems, that has an impact on DNB’s ability to execute any trade, DNB refers to our general business terms regarding liability and exemption from liability.

10. Monitoring and review

DNB will benchmark transactions in scope against market data. Internal policies are established to monitor and follow up on outliers.

Procedures on how DNB monitor and evaluate our execution policy across different instrument classes are available on request.

This order execution policy is subject to review annually, or when an update is needed due to material changes in execution processes. The latest version of this order execution can be found on our website.

11. Annex 1: Trading Venues and Best Execution principles

Abbreviations used:

• RM: Regulated market
• SI: Systematic Internalizer
• MTF: Multilateral Trading Facility
• OTC: Over the counter
• RFQ: Request for Quote
• OTF: Organized Trading Facility