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.

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. Portfolio 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 linked to 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 for 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. The 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. may result in different 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", and immediately inform the Portfolio Manager in the event 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 Charges to the Customer’s bank account

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.

The Portfolio Manager shall have the right to debit the Customer’s bank account and without sending a specific advance notice

Customer:

• for the purchase/subscription etc. of securities in accordance with the Customer’s instructions and Electronic Disposition.
• to cover claims in accordance with the price list that the Customer must pay under the Agreement.
• upon termination of the Agreement to cover unpaid fees, costs and expenses.

9. Assistants etc.

The Customer’s Foreign Securities are usually stored/registered in depository/registers in foreign banks, cf. Section 2. Payment and delivery are also made through these. The Customer hereby accepts that the Portfolio Manager has the right to use such foreign banks or other foreign managers. The Portfolio Manager chooses who the Portfolio Manager will enter into a Manager Agreement with for the implementation of Disposition and Storage, etc.

The relevant foreign Portfolio Manager chooses who he wants to have as his contractual parties (“Agent”, “Sub Custodians”, etc.) to exercise his duties, as the Portfolio Manager will not have an influence on this choice. In addition, settlement and settlement systems etc. are often used to carry out the tasks the Agreement entails, and the securities will often be registered in securities registers. The Customer hereby accepts that the aforementioned will be subject to the relevant law, rules, member agreements, terms, instructions, market practice etc. relating to the execution of their duties, including where this involves opening custodian accounts, storage, registration, delivery etc., and that this thus also affects the Customer’s instructions.

10 Withholding of taxes etc.

When trading in foreign markets and through the possession of Foreign Securities, the Portfolio Manager or foreign Portfolio Manager may, in accordance with laws/tax agreements or regulations, be required to withhold amounts corresponding to different types of taxes or fees. Where this withholding is necessary, the Portfolio Manager can make a preliminary calculation of the relevant amount and withhold this amount. Insofar as it applies to any application on behalf of the Customer for a refund of withheld tax, refer to Section 1.

11. Portfolio Manager’s liability

The Portfolio Manager is liable to the Customer if their own or their employees’ negligent actions or omissions regulated by the Agreement have caused the Customer damage, loss or expense. The Portfolio Manager or the Portfolio Manager’s employees will not be liable for the Customer’s damages, losses or expenses incurred as a result of using foreign portfolio managers or other assistants, their actions or omissions or their default, or insolvency if the Manager has met general requirements for due diligence when selecting the assistants. The Portfolio Manager’s selection refers to both the original choice and the maintenance of the choice of foreign Portfolio Manager. The choice of foreign Portfolio Manager will have to reflect which country/market the Portfolio Manager is in. The Portfolio Manager will not be responsible if the Portfolio Manager has not had any influence on the selection.

The Customer is responsible for any consequences of the selected markets where the Disposition is made. The Portfolio Manager is not responsible for losses attributable to local and market conditions and thereby circumstances that are outside the foreign Portfolio Manager’s and the Portfolio Manager’s control. The manager does not guarantee the authenticity, validity or value of the securities the Customer has chosen to buy/subscribe to or otherwise receive and which are covered by the Agreement.

The Portfolio Manager is not responsible for the form, accuracy, completeness or content of any notice, circular, report, announcement or other material, nor for translation or summaries, that are not prepared by the Portfolio Manager, but which the Portfolio Manager has forwarded from a foreign Portfolio Manager, assistants, issuer or others to the Customer. In addition, the Portfolio Manager is not responsible for the accuracy, completeness or content of any translation or summary produced by the Portfolio Manager. The Customer is solely responsible for the taxes that may be imposed as a result of Disposition, dividends, corporate events of any kind and any other payment obligation associated with the securities covered by the Agreement.

Unless the relationship is specifically regulated in this Section 11, DNB Markets’ general business terms and conditions for financial instruments etc. apply, as worded at any given time. For bank accounts held with the Portfolio Manager, the Portfolio Manager’s general terms and conditions for deposits and payment orders and/or the Financial Contracts Act apply.

12. Customer’s responsibility

The Customer shall indemnify the Portfolio Manager for loss, damage, claims, obligations, expenses of any kind, including external and internal legal costs, that the Portfolio Manager incurs directly or indirectly, in this section called “Loss”, as a result of:

• The Client’s Foreign Securities being deposited/registered under the Portfolio Manager’s name, marked “DNB Clients” with a foreign Portfolio Manager, assistant, etc.,
• The Portfolio Manager has carried out instructions from the Customer under the Agreement or the Portfolio Manager has otherwise performed services under the Agreement,
• The Customer has failed to inform or has given deficient information or instructions under the Agreement, or the Customer has otherwise breached what follows from the Agreement,
• taxes are accrued as a result of the Agreement in connection with payment, settlement or other transaction,
• The Portfolio Manager has relied on information received from the Customer under the terms of the Agreement, including information in the certificate of registration, company decisions, articles of association, reports, escrow funds, instructions and/or consents.

13. Prices and possessory lien

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.

The Customer shall pay the Portfolio Manager in accordance with the price list under the Agreement, as the price list is displayed at any given time on DNB Markets’ website (dnb.no). The Portfolio Manager will, according to the right of disposal, make payment by charging the bank account the Customer has specified each year, cf. Section 8.

The Customer hereby declares they are aware that the Portfolio Manager has a possessory lien in securities for management under the Agreement in terms of all unpaid claims under the Agreement. The same may apply to the Portfolio Manager’s assistants, securities registers etc. and where there may also be other rules for possessory lien, sales rights, counter claims etc.

14. Termination and cancellation

The agreement may be terminated by either party with four weeks' prior written notice.

In the event of a breach by one of the parties, the Agreement may be terminated in writing by the non-breaching party with immediate effect. In the event of termination or cancellation by the Customer, the Customer shall instruct the Portfolio Manager which new Portfolio Manager the securities and any escrow funds in the bank account(s) should be transferred to, and the Customer will be responsible for any costs incurred in this regard.

15. Notifications

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.

The parties’ notifications must be made in writing. Communication between the Customer and the Portfolio Manager shall be electronic. Notifications to the Customer are sent electronically on the website associated with the Customer’s electronic trading solution (online bank), cf. however, the last paragraph of this section, and shall not otherwise be considered received.

Portfolio Manager:

DNB Bank ASA, Attn: Support Custody, Dronning Eufemias gate 30, 0191 Oslo.

Telephone: +47 23 26 86 10

Email: support.custody@dnb.no

16. Cooling-off rights

Consumers basically have 14-day cooling-off rights when they enter into agreements online or in other forms of remote communication. However, there are no cooling-off rights for products or services where the price depends on fluctuations in the financial markets that can take place before the end of the withdrawal period, and which cannot be controlled by DNB. If the Customer regrets setting up the nominee account, the Portfolio Manager should be contacted by telephone or email for clarification of whether the cooling-off rights can be applied. In order to exercise cooling-off rights, any holdings must be transferred to another nominee account. Regardless of the right of cancellation, the Customer can terminate their nominee account at any time in accordance with item 14. Certain services offered by DNB Markets require the customer to have a nominee account at DNB.

17. Entering into an agreement

The agreement is considered to have been entered into when the Customer completes the agreement procedure online. For corporate customers, the Agreement can also be entered into by signing a paper or electronic version of the service agreement. In both cases, the Portfolio Manager will confirm the conclusion of the agreement. Unless otherwise stated in the Agreement, DNB Markets’ general business terms and conditions for financial instruments etc. apply.

18. Changes

The Portfolio Manager reserves the right to change the Agreement. Significant changes take effect from the date the Customer is notified of them in writing. The Customer is deemed to have accepted to receive notification of changes by email. Other changes enter into force from the time and date they are published www.dnb.no/avtaler where the currently applicable Agreement will also be available. Changes will not have any effect on orders, transactions, dispositions etc. that are filed or executed before the date of notification of the changes.

19. 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