SBI Securities (Hong Kong) Limited

These Terms and Conditions on Purchase and Sale Transactions of Shares Through Electronic Transaction System constitute an agreement (hereinafter referred to as these “Terms and Conditions”) between the client (hereinafter referred to as the “Client”) and SBI Securities (Hong Kong) Limited (hereinafter referred to as “SBI”). The Client hereby agrees that these Terms and Conditions supplement any relevant trading agreement and/or terms of business between SBI and the Client, with respect to the Client’s entrustment of purchase and sale transactions of Shares (as defined below) through the Electronic Transaction System (as defined below) to SBI.

Article 1 (Application)

These Terms and Conditions are applicable to any entrustment of purchase and sale transactions of the Shares (hereinafter referred to as the “Purchase and Sale Transactions”) conducted by the Client through the Electronic Transaction System (by way of either the DMA Order (as defined below) or the DSA Order (as defined below); hereinafter referred to as the “Purchase and Sale Orders”) and execution of the Purchase and Sale Orders by SBI related to such entrustment in the:

Financial Instruments Exchange Markets (as defined in Article 2 (17) of the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended); hereinafter the same shall apply);
Alternative Liquidity Pools (as defined in Paragraph 19.2 of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (as amended); hereinafter the same shall apply); or
the PTS Markets (which means the “Proprietary Trading System” as defined in Article 26-2-2 (7) of the Order for Enforcement of the Financial Instruments and Exchange Act of Japan (Cabinet Order No. 321 of 1965, as amended); hereinafter the same shall apply) shall be conducted pursuant to these Terms and Conditions.

If any conflict or discrepancy arises between these Terms and Conditions and any laws, orders and regulations, etc. applicable to the Purchase and Sale Transactions or Purchase and Sale Orders (including the regulations, etc. of regulatory authorities, the Financial Instruments Exchanges (as defined in Article 2 (16) of the Financial Instruments and Exchange Act of Japan; hereinafter the same shall apply) and self-regulatory organizations such as the Japan Securities Dealers Association and the Securities and Futures Commission, and hereinafter referred to as the “Laws and Regulations”), the Laws and Regulations shall prevail. If any conflict or discrepancy arises between these Terms and Conditions and any relevant trading agreement and/or terms of business between SBI and the Client applicable to securities transactions, these Terms and Conditions shall prevail.

Article 2 (Definitions)

As used herein, the meanings of the terms as listed in each Item below shall be as set forth in such each Item.

Electronic Transaction System:
means an electronic data processing system to place orders to the order processing system of the Financial Instruments Exchange, Alternative Liquidity Pool operator (hereinafter referred to as the “ALP Operator”) or a financial instruments business operator (hereinafter referred to as the “PTS Operator”) which operates PTS markets, by connecting the electronic computer (including software; hereinafter the same shall apply) used by the Client and the electronic computer used by SBI through electric telecommunication lines, and includes electronic computers, telecommunications equipment, and electric telecommunication lines which are components thereof, and the Algorithmic Trading System as defined in this Article.
Shares:
mean shares, ETFs, REITs and other securities listed on the Japanese Financial Instruments Exchange Markets.
Securities:
as defined in Part 1, Schedule 1 of the Securities and Futures Ordinance (Cap. 571, as amended); hereinafter the same shall apply. DMA Order (Direct Market Access Order): means an order placed directly to the order processing system of the Financial Instruments Exchange, ALP Operator or PTS Operator without going through manual order placement operations by a person in charge of purchase and sale at SBI who passes orders to the Financial Instruments Exchange Markets, Alternative Liquidity Pools or the PTS Markets, by the Client conducting order placement operations of the Purchase and Sale Orders using the Electronic Transaction System (excluding DSA Orders).
DSA Order (Direct Strategy Access Order):
means an order processed at the Algorithmic Trading System by the Client’s selected models and parameters necessary for the execution and processing of the Purchase and Sale Orders by using the Electronic Transaction System.
Algorithmic Trading System:
composes a part of the Electronic Transaction System and means a transaction system provided by SBI or a third party selected by SBI (hereinafter referred to as the “System Provider”) (including telecommunication lines that connect SBI and the System Provider, telecommunication equipment and electronic computers of each of SBI and the System Provider if the system is provided by the System Provider), in order to automatically designate volume, timing, and other transaction conditions to be passed to the Financial Instruments Exchange Markets, Alternative Liquidity Pools or the PTS Markets, by the method determined in advance according to the models and parameters selected by the Client, if a certain fact occurs to the market condition information or transaction status, etc. with respect to the Purchase and Sale Orders placed by the Client.

Article 3 (The Client’s Responsibility)

The Client shall place the Purchase and Sale Orders to SBI at its own determination and responsibility.
The Client understands and shall comply with the Laws and Regulations with respect to the Purchase and Sale Orders at its own responsibility.
The Client shall maintain an order error prevention system in an appropriate way, for example, by utilizing systematic control with indication, etc. of warning messages in the Purchase and Sale Orders exceeding a certain level (in price and volume), at its own responsibility.
The Client shall use the Electronic Transaction System only for the purpose of the Purchase and Sale Orders of the Client or its underlying clients, and shall not use it for any other purpose. Furthermore, the Client shall secure the maintenance and security of, and manage, the electronic computers used by the Client (including, but not limited to, avoiding errors in inputting orders or other operations, retaining records or information, and backup of data files), at its own responsibility.
The Client shall authorize its certain officers and employees (hereinafter referred to as the “Users”) to use the Electronic Transaction System only to the extent necessary with respect to the Purchase and Sale Orders, and manage strictly the information necessary to access the Electronic Transaction System to ensure that the Electronic Transaction System is not used by a person not so authorized. Regardless of whether a person is actually so authorized by the Client or not, any act determined by SBI as having been conducted through electronic computers used by the Client (including, but not limited to, order placement of, correction to, or cancellation of, the Purchase and Sale Orders) shall be deemed as an act of the Client. Notwithstanding the above, the Client shall not sub-delegate access to the Electronic Transaction System to any third parties.
The Client shall have appropriate arrangements in place to ensure that its authorized Users are proficient and competent in using the Electronic Transaction System for DMA Orders, and that adequate arrangements are in place to monitor the DMA Orders entered through the Electronic Transaction System.
The Client shall ensure that its Users authorized to use the Algorithmic Trading System have a good understanding of the operation of the Algorithmic Trading System, the trading algorithms and the compliance and regulatory issues which may arise from the use of the Algorithmic Trading System and the trading algorithms.

Article 4 (Expenses for Use of Electronic Transaction System)

1 Electronic computers used by the Client for the Purchase and Sale Transactions may be separately agreed on between the Client and SBI. The Client shall build, maintain and manage its system environment necessary for the use of the Electronic Transaction System at its own responsibility and cost, and if it uses electronic computers provided by an external information vendor (hereinafter referred to as the “Information Vendor”), it shall comply with the agreements between such Information Vendor and the Client. Any and all damages and losses arising due to errors and failures, etc. of the electronic computers used by the Client shall be attributed solely to the Client.
The Client shall bear expenses charged by the Information Vendor to the Client, telecommunication expense, maintenance and management expense of the Electronic Transaction System, and any and all other expenses with respect to the use of the Electronic Transaction System.
SBI shall not charge the Client any commission related to the use of the Electronic Transaction System. Provided, however, that if the Client conducts the Purchase and Sale Transactions by using the Electronic Transaction System hereunder, the Client shall pay a brokerage commission and other expenses related to such Purchase and Sale Transactions to SBI, in accordance with the rate separately agreed between the Client and SBI, as may be amended from time to time by mutual agreement.

Article 5 (Conditions for, Scope of, and Restriction on Order)

The Purchase and Sale Orders shall be deemed to have been received by SBI, upon transmission of a notice of confirmation of order by SBI from the electronic computers used by SBI. SBI shall not be held liable for any order for which such notice has not been transmitted or any order which is inaccurate.
The Client may correct or cancel the Purchase and Sale Orders only through the Electronic Transaction System. Provided, however, that if the Client is unable to correct or cancel the Purchase and Sale Orders made to SBI by using the Electronic Transaction System due to a failure in the Electronic Transaction System, the Client may notify SBI of a correction to or cancellation of such Purchase and Sale Orders by another means, and in such case, the receipt of the order so corrected or canceled shall take effect upon approval of such correction or cancellation by SBI.
The Purchase and Sale Orders shall be effective only on the date of order. The placement of, correction to and cancellation of the Purchase and Sale Orders by the Client may be conducted only on the dates and at the times set by SBI from time to time.
The Purchase and Sale Orders received by SBI from the Client shall be cash transactions only.
Notwithstanding the provisions of the preceding Paragraph, the Client may conduct the Purchase and Sale Transactions that fall under short selling, if it is agreed on separately with SBI in advance. If the Purchase and Sale Transactions fall under short selling, the Client may place the Purchase and Sale Orders only if it expressly indicates that it is short selling to SBI in advance. In such case, the Client shall notify SBI of the party from which the Shares related to such short selling shall be procured, in a manner agreed on with SBI in advance.
Conditions for, scope of, and restriction on the Purchase and Sale Orders (hereinafter referred to as the “Use Restrictions”) entrusted to SBI through the Electronic Transaction System other than those in each of the preceding Paragraphs shall be set forth in the notification letter sent by SBI to the Client upon the opening of the Client’s account, and the Client shall comply with such Use Restrictions. Provided, however, that SBI may change such Use Restrictions upon consultation with the Client or at its own discretion, and in the case of change, it shall notify the Client of the details of such change. Use restrictions include maximum amount of expected payment amount and volume per order related to DMA Orders and DSA Orders. The expected payment amount shall be calculated based on the most recent price of share subject to the Purchase and Sale Transactions, irrespective of whether the order is a market order or a limit order. For orders placed before the opening on the business day immediately after an adjustment has been made due to ex-dividend, share split, etc., the amount shall be calculated based on the price after such adjustment calculated with the final price on the immediately preceding business day.

Article 6 (Restrictions on Transaction)

If any of the Purchase and Sale Transactions falls under any of the following Items, SBI may restrict the Purchase and Sale Transactions, or reserve or suspend the execution of the Purchase and Sale Orders. In such case, SBI shall promptly notify the Client to such effect, through the Electronic Transaction System or by any other method.
1. if SBI determines that it violates or may violate these Terms and Conditions, the Securities and Futures Ordinance, the “Regulations on Transactions, etc. of Securities” as set forth in Chapter VI of the Financial Instruments and Exchange Act of Japan, or any other Laws and Regulations;
2. if SBI determines that it violates or may violate the contracts, etc. of the ALP Operator or the PTS Operator that are applicable to the Purchase and Sale Transactions in the Alternative Liquidity Pools or the PTS Markets respectively;
3. in addition to those set forth in each preceding Item, if SBI determines it is inappropriate in light of the soundness of transaction and market practices;
4. if SBI determines it is inappropriate pursuant to SBI’s internal regulations, etc.;
5. if any of the Financial Instruments Exchanges, Alternative Liquidity Pools or the PTS Operator rejects order receipt; or
6. if the price or volume per order exceeds the maximum amount as set forth in Article 5, Paragraph 6 and/or any other Use Restrictions as notified by SBI.
SBI may request the Client to provide necessary information to make determinations related to Items 1 through 4 of the preceding Paragraph. The Client shall meet such requests in good faith, and shall not reject the same without a justifiable reason.

Article 7 (Matters for Confirmation and Approval)

Each of the Client and SBI shall, if it finds any defect, etc. related to the Electronic Transaction System, notify the other party as soon as practicable, and determine, and seek to implement countermeasures therefor upon consultation between the Client and SBI.
The Client confirms and approves the matters listed in each Item below:
1. SBI only provides the Electronic Transaction System to the Client as is at the time of receipt of the Purchase and Sale Orders, and the Client uses the same at its own determination and risk; SBI makes no representations or warranties, explicit or implicit, regarding the accuracy, integrity, functionality, reliability, timeliness, validity and effectiveness, continuity, non-existence of mistake or defect, function to perform operations expected by the Client, and any other matters, of any and all results brought about by the use of the Electronic Transaction System by the Client, the Electronic Transaction System itself, or information transmitted or created by the Electronic Transaction System;
2. If the price and volume, or other data or information of the Shares is delivered by SBI to the Client through the Electronic Transaction System, these are presented only for the purpose of providing information to the Client, and SBI makes no representations or warranties, explicit or implicit, regarding the accuracy, integrity, reliability, and fitness for a particular purpose, etc. of the above;
3. SBI does not provide investment advice, nor make solicitation or recommendation regarding the Purchase and Sale Transactions of the Shares to the Client, solely by providing the Electronic Transaction System; and
4. The Client indemnifies any and all damages or losses incurred by SBI, by placing the Purchase and Sale Orders or otherwise using the Electronic Transaction System (including the case where it is deemed as an act of the Client pursuant to Article 3, Paragraph 5), or in relation to the Client’s violation of these Terms and Conditions (unless SBI commits a willful act or gross negligence).

Article 8 (Limitation of Liability)

If any damage or loss is caused to the Client or a third party due to any of the reasons listed in each Item below, or the use of, or inability to use, the Electronic Transaction System (for any reason, including breakdown, malfunction of, delay in, or interruption of the Electronic Transaction System), SBI shall not be held liable for such damage or loss:

a mistake in inputting orders by the Client;
an act deemed to be that of the Client pursuant to the provisions of Article 3, Paragraph 5;
the Client’s violation of the provisions of either the Laws and Regulations or these Terms and Conditions;
restriction on the Purchase and Sale Transactions, or suspension or reservation of execution of the Purchase and Sale Orders by SBI, pursuant to the provisions of Article 6, Paragraph 1;
a commission or an omission by a third party (including the System Provider and the Information Vendor);
a mistake occurring at the Financial Instruments Exchanges, ALP operator or the PTS Operator;
an event deemed to be a force majeure event such as natural disaster, war, political change, and shutdown of the Financial Instruments Exchange Markets, Alternative Liquidity Pools or the PTS Markets; or
in addition to those listed in each of the preceding Items, an event not attributable to SBI.

Article 9 (Term)

The effective term hereof shall be for one (1) year from the execution date hereof. Provided, however, that unless either the Client or SBI specifically requests by the date one (1) month prior to the termination hereof, these Terms and Conditions shall be automatically renewed for an additional period of one (1) year from the date immediately after the termination date hereof, and the same shall apply thereafter.
Notwithstanding the provisions of the preceding Paragraph, the Client or SBI may cancel these Terms and Conditions by providing thirty (30) business days’ prior written notice to the other party.
If an event falling under any of the following Items occurs, SBI may immediately cancel this Agreement by notifying the Client:
1. there is a material violation of any of the provisions hereof by the Client;
2. The Client is subject to suspension of payment, provisional attachment, attachment, auction or enforcement of security interest, or a petition for commencement of insolvency proceedings, civil rehabilitation proceedings, corporate reorganization proceedings, special liquidation or any bankruptcy proceedings comparable thereto is filed against the Client;
3. The Client is subject to disposition of a suspension of transaction with a clearing house or the Electronic Monetary Claim Recording Institution as set forth in Article 2 (2) of the Electronically Recorded Monetary Claims Act of Japan (Act No. 102 of 2007; as amended);
4. The Client is subject to collection procedures due to delinquency of tax or public imposition; or
5. v. The Client violates either the provisions of any relevant trading agreement and/or terms of business between SBI and the Client applicable to securities transactions, or the provisions related to the Purchase and Sale Transactions between the Client and SBI.
To the extent permitted by law, SBI may from time to time amend any of the Terms and Conditions by notifying the Client or by publication on its website and such amendments shall be effective from the date stipulated in such notice or publication. The Client acknowledges and agrees that if the Client does not accept any amendments as notified by SBI from time to time, the Client shall have the right to terminate these Terms and Conditions in accordance with this Article 9. The Client further acknowledges that any amendments shall be deemed to be accepted by the Client, should the Client continue to effect Purchase and Sale Orders to SBI under these Terms and Conditions without expressly communicating its objections to such amendments.

Article 10 (Notice)

Any notices hereunder shall be given to the addresses as set forth in the relevant trading agreement and/or terms of business agreed between SBI and the Client. If the address of either the Client or SBI is changed, such party shall promptly notify the other party in writing.

Article 11 (Representations and Affirmations of Not Being an Organized Crime Group or a Member of an Organized Crime Group)

Each of the Client and SBI represents to the other party that neither it nor any of its officers, etc. falls under now, and affirms that neither it nor any of its officers, etc. will fall under in the future, an organized crime group, a member of an organized crime group, a person who currently is not, but has been a member of an organized crime group at some point during last five (5) years, a quasi-member of an organized crime group, a related company or association of an organized crime group, a corporate racketeer, etc., a member that either under the guise of social or political activity, or as an advocate of such activity, engages or possibly engages in violent and illegal act against other person, to pursue illegal profit and as a result is a threat to civil safety, or any group similar thereto (hereinafter referred to as the “Organized Crime Group Members”), or any of the following Items:
1. a person having such relationship with the Organized Crime Group Members that shows the Organized Crime Group Members’ control over the person’s management;
2. a person having such relationship with the Organized Crime Group Members that shows the Organized Crime Group Members’ substantial involvement in the person’s management;
3. a person having such relationship with the Organized Crime Group Members that shows reliance on the Organized Crime Group Members for the purpose of unfairly benefiting itself or a third parties, or of damaging third parties;
4. a person having such relationship with the Organized Crime Group Members that shows provision of funds, benefits or services from the person to the Organized Crime Group Members; or
5. a person where any of its officers or a person substantially involved in its management is engaged in socially condemnable relationship with the Organized Crime Group Members.
Each of the Client and SBI affirms to the other party that it will not by itself or by utilizing a third party engage in any of the acts falling under each Item below:
1. making violent demands;
2. making unjust demands surpassing the limit of legal responsibility;
3. using threatening words or violence in relation to transactions;
4. by way of spreading of rumors, or using deceit or influence to damage the other party’s credit, or causing damage to the other party’s business; or
5. any other activities similar to the foregoing Items.
Each of the Client and SBI may, if the other party violates, or is reasonably suspected to violate, the affirmations in any of the preceding Paragraphs, suspend all or part of the transactions with the other party, and/or terminate all or part of the contracts with the other party immediately, without any notice to the other party or any other procedures. Neither the Client nor SBI shall be obliged to explain or disclose to the other party any materials or information concerning contents of and grounds for such reasonable suspicion, and each of the Client and SBI confirms that it shall not be liable for any and all damage, etc. arising out of or in relation to the suspension of transactions and/or termination of contracts.
Each of the Client and SBI affirms that it shall be obliged to compensate the other party for any damage, if the other party incurs damage due to its (including its officers, etc.) violation of affirmations in Paragraph 1 or Paragraph 2.

Article 12 (Governing Law and Jurisdiction)

These Terms and Conditions shall be governed by and interpreted in accordance with the laws of Hong Kong Special Administrative Region (“HKSAR”). Any and all disputes arising in relation to these Terms and Conditions shall be subject to the exclusive jurisdiction of the courts of the HKSAR.

Article 13 (Matters for Consultation)

Should any matters not provided for herein or any questions in the contents hereof arise, the Client and SBI shall handle the same in accordance with the provisions of the Laws and Regulations and practices related to securities transactions, and shall consult on and resolve any matters not provided for in the above Laws and Regulations or practices in good faith.

Version: December 2021

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Terms and Conditions on Purchase and Sale Transactions of Shares Through Electronic Transaction System