Rabobank Trading Practices

This disclosure sets forth our standard business practices and terms of dealing generally with our counterparties in principal-to-principal transactions. It sets forth how we will communicate and transact in relation to requests for quotes, requests for indicative prices, bid lists, discussion or placement of orders and all other expressions or indications of interests that may lead to the execution of transactions and our management of potential or actual conflicts of interest in our principal-dealing and market-making activities.

Rabobank is dedicated to upholding a high level of integrity and adhering to rules, regulations and requirements published by relevant international groups and regulatory bodies in our dealings with counterparties. In doing so, we also want to ensure that there are no ambiguities or misunderstandings regarding Rabobank’s practices and certain terms of dealing.

When Rabobank is willing to “work” a counterparty’s “order” (as such term is used herein) at a price (such as a limit order), Rabobank is indicating a willingness to consider entering into the trade at the price requested by the counterparty. Rabobank will exercise its discretion in deciding whether to work an order, which orders it would be willing to execute, when it would be willing to execute them, and how it would execute them, including whether to execute all or part of the order, unless we have otherwise expressly agreed to different terms of execution. As such, Rabobank’s receipt of an order or any indication of working an order received from a counterparty does not create a contract between the counterparty and Rabobank that commits it to execute any or all of the order in any particular way, nor is it a contract that binds the counterparty to execute the trade with Rabobank at the order price.

As it relates to timing of the execution of an order, Rabobank may look for market opportunities that satisfy both a price where we can execute a counterparty’s order at the counterparty’s desired price and earn a return for that activity, including while managing and prioritizing other interests, positions and executions for Rabobank and other counterparties. When Rabobank is willing to execute an order with a counterparty, the price at which Rabobank would do so may include a spread or markup over the price at which Rabobank transacted, or may have been able to transact, with other counterparties.

As a market maker or liquidity provider in financial products that handles a portfolio of positions for multiple counterparties’ competing interests, as well as Rabobank’s own interests, Rabobank acts as principal and may trade prior to or alongside a counterparty’s transaction to execute transactions for Rabobank or to facilitate executions with other counterparties, to manage risk, to source liquidity or for other reasons. These activities can have an impact on the prices we offer a counterparty on a transaction and the availability of liquidity at levels necessary to execute counterparty orders. They also can trigger stop loss orders, barriers, knock-outs, knock-ins and similar conditions.

In addition, as a market maker or liquidity provider in financial products, Rabobank may receive requests for quotations and multiple orders for the same or related financial products. Rabobank acts as principal and may seek to satisfy the requests of all of its counterparties and its independent risk management objectives, but it retains discretion with respect to how to satisfy its counterparties, including with respect to order execution, aggregation, priority and pricing. Generally speaking, Rabobank is not required to disclose to a counterparty when the counterparty attempts to leave an order that Rabobank is handling other counterparties’ orders or Rabobank orders ahead of, or at the same time as, or on an aggregated basis with, the counterparty’s order. Rabobank is under no obligation to disclose to a counterparty why Rabobank is unable to execute the counterparty’s order in whole or in part.

Unless otherwise expressly agreed, any firm or indicative bid, offer or price quoted by Rabobank to a counterparty is an “all-in” price, inclusive of any spread or markup above the price at which Rabobank may be able to transact, or has transacted, with other counterparties, regardless of the circumstances under which a counterparty receives or otherwise learns of a price. Appendix A below describes possible charges applicable to client trades and will be disclosed to clients in accordance with all prudential regulatory rules.

If and when a counterparty’s order can be executed at the order price, it does not mean that Rabobank held, acquired, or would acquire, inventory to complete the transaction at the order price level or that there exists a tradable market at that level. Rabobank reserves the right to execute a transaction with a counterparty using Rabobank’s inventory or through acquisition or other hedging activities.

When solicited for, and prior to the execution of, a transaction, Rabobank may risk-mitigate or hedge any exposure that would be created by such transaction.

Rabobank has discretion to offer different prices or services to different counterparties for the same or substantially similar transactions.

It should be expected that Rabobank’s sales, trading and other personnel may consult, including with respect to a counterparty’s interests, trading behavior and expectations, markup, spread, and any other relevant factors, on a need-to-know basis and subject to applicable laws, regulations and internal policies, in order to handle Rabobank’s market-making positions, and for the benefit of Rabobank’s trading positions and the handling of other counterparty transactions.

In certain markets, such as foreign exchange and interest rates, Rabobank utilizes a number of internally developed tools designed to access both external and internal sources of liquidity in order for Rabobank, as principal, to provide bids and offers, and executions, reasonably available under the circumstances. These tools may include algorithms and order routers that route orders or transaction requests to various external liquidity sources, including certain trading venues that electronically provide information to us regarding their available and accessible liquidity. In determining the price of a trade, Rabobank takes into account a number of factors that are described in Appendix A below. In addition, to the extent we execute a trade with you through internal sources of liquidity, and that liquidity is sourced from another client, Rabobank may also receive additional compensation of, and fees from, the trade with our other client.

Rabobank is a global financial services firm that has operated and continues to operate as a dealer, counterparty and market maker in the interest rate, currency, and commodity markets. As such, Rabobank engages in activities such as price discovery, price quoting, order taking, trade execution and other related activities. Unless otherwise expressly agreed, Rabobank engages in these transactions as principal. In that capacity, Rabobank does not act as agent, fiduciary or financial advisor or in any similar capacity on behalf of its counterparties. It should be noted that Rabobank and its counterparties may have divergent or conflicting interests.

Rabobank may on a regular basis trade (taking long or short positions, or both concurrently) in instruments identical or economically related to your transactions or the underliers. Rabobank may engage in these activities for its own principal accounts, for accounts under management or to facilitate transactions (including block transactions) on behalf of customers. Subject to any express agreement in the governing documentation, Rabobank may, in its discretion, decide to hedge its exposure under transactions by taking positions in the underliers or related instruments. Rabobank may adjust its hedge dynamically by purchasing or selling the underliers or related instruments, and may close out or unwind its hedge positions. Rabobank’s market activities in connection with such hedging may occur, or become more frequent or of greater magnitude, in connection with or in anticipation of the initiation or termination or exercise of your transactions, on or before a valuation or observation date, or, in the case of option transactions, when the price, level or value of the underlier is near the exercise level or level at which a “barrier” or other condition may be satisfied. Rabobank may also structure, trade and market instruments that may take opposing economic positions to your transaction.

Protecting the confidentiality and security of counterparty information is an important part of how we do business. Rabobank has policies and controls that are designed to protect a counterparty’s confidential information. However, a counterparty should understand that Rabobank makes use of information provided to it as principal in order to effectuate and risk manage transactions. Specifically, unless otherwise agreed, and subject to applicable laws, regulations and internal policies, Rabobank may use the economic terms of a transaction (but not the counterparty identity) in order to source liquidity and/or execute risk-mitigating transactions. In addition, as part of its obligations as a regulated entity, Rabobank may share counterparty information as required by applicable laws or Rabobank’s regulators.

With regard to executed transactions, Rabobank analyzes this information on an individual and aggregate basis for a variety of purposes, including counterparty risk management, sales coverage, and counterparty relationship management.

We also may analyze, comment on, and disclose anonymized and aggregated information regarding executed transactions, together with other relevant market information, internally and to third parties, as market color, subject to applicable laws, regulations and internal policies.

Rabobank aims to uphold a high level of integrity and to adhere to industry best practices in our dealings with clients.

This disclosure is meant to underscore Rabobank’s commitment to providing clients transparency on our business practices. If you have questions after reading this disclosure or concerning Rabobank’s dealings with you, we encourage you to contact your senior Rabobank representative.

The price at which you trade with Rabobank will depend on a number of factors, including those set out below. This list is not exhaustive and Rabobank may take into account other factors that it considers appropriate in determining that price.