Effective Date: January 1, 2018

I. Executive Summary

This policy, adopted by Sauder Global Investment ("SGI"), outlines the criteria governing the execution of securities lending transactions by SGI acting as an agent for its Clients.

As per the agreed contractual arrangements between SGI and its Clients, SGI lends Clients’ securities on an over-the-counter basis or through a specialized trading venue for securities lending transactions, to borrowers approved by SGI’s Clients.
When executing securities loan transactions as a securities lending agent, SGI will consistently take all necessary measures to achieve the best possible outcome for its Clients across lending portfolios, rather than for each individual transaction.
SGI’s Securities Lending Program does not involve lending securities for SGI's own account or arranging loans to or from its affiliates.

II. Objective/Purpose

This policy aims to ensure uniform execution practices are followed throughout SGI’s Securities Lending Program. Although SGI is not a regulated MiFID firm, this policy intends to comply with MiFID II execution requirements.

III. Scope

This policy applies when SGI, as a securities lending agent, executes securities lending transactions on behalf of Clients within its Securities Lending Program.
Should SGI discover any deviation from this Policy, SGI will review the situation and may adjust practices, as appropriate, at its discretion.

In the event of system failures or other unavoidable circumstances beyond SGI’s reasonable control, SGI may occasionally execute orders differently from the normal process set forth by this Policy. In such cases, SGI will still strive to execute orders on the most favorable terms available given the circumstances.

This Policy's requirements outlined herein shall not apply when SGI enters a securities loan transaction at the explicit direction of a specific Client.

IV. Policy Requirements

General Requirements for Securities Lending Trade Execution

When conducting securities loan transactions in the regular course as a securities lending agent, SGI will take all necessary steps to achieve the best possible outcome for its Clients consistently across lending portfolios, rather than on a per-transaction basis.

SGI's Clients have granted SGI the authority, within defined parameters, to execute securities lending transactions on their behalf. SGI will not delegate the execution of client orders to any non-affiliated third party.

While the primary objective is to achieve the optimal lending fee throughout the securities loan term, the execution of securities loans may involve SGI Traders exercising commercial judgment informed by available market information and professional experience. Borrower demand and available supply of a security for loan are significant factors in determining the lending fee. However, other considerations, as outlined below, may also influence decision making for securities loan execution.

(i) Likelihood of execution and settlement
Certain factors related to the security's status, such as dividend entitlement and voting intent for voluntary corporate actions, may impact loan pricing and borrow demand. Additionally, if SGI is aware of any factor that could impair settlement or affect the likelihood of recall (e.g., an upcoming Client sale), SGI may refrain from pursuing securities loans for affected securities.

(ii) Loan Size
The size of positions available for loan may impact loan pricing.

(iii) Costs
SGI may consider the costs associated with a transaction, including capital costs.

(iv) Other factors
Other relevant considerations may include the duration of loans, collateral parameters, liquidity concerns, and counterparty restrictions, as well as any other restrictions or parameters imposed by a Client.

The relative importance of the above-listed execution factors may not be equal. The prioritization of any factor over others may depend on specific Client-mandated parameters and prevailing market conditions. SGI will apply its commercial judgment and experience, considering available market information, to achieve the best balance among sometimes conflicting factors.

Furthermore, the fee level for a securities loan may change over the loan's lifetime. SGI will identify, prioritize, and seek to re-price securities loans that are deemed to deviate from current market fee levels or prevailing fee levels across SGI’s loan book.

Requirements for Securities Lending Trading Venues

Client securities available for loan may be offered via trading venues that facilitate securities lending transactions. Securities loans executed on a trading venue are subject to similar execution standards as in over-the-counter transactions, with commercial judgment applied over codified parameters. Information on trading conducted on a trading venue will be provided to Clients by SGI upon request.

When selecting an execution venue, SGI will consider factors including, to the extent relevant and applicable:
(a) Effectiveness of its execution processes;
(b) Specific advantages of the execution venue;
(c) Commercial positioning;
(d) General order handling;
(e) Integrity, Reputation, Resiliency, Reliability;
(f) Pricing analysis; and
(g) Fees charged.

V. Governance

SGI has implemented mechanisms to reasonably ensure that all necessary steps are taken to achieve the best possible outcome for Clients.

i. Fair Allocation Algorithm
SGI employs a fair allocation process to reasonably distribute loans among Clients whenever possible. This process guides the sequence in which securities loan opportunities are allocated among Clients.

ii. Execution Oversight
SGI maintains an execution oversight forum comprised of senior-level management from SGI's Securities Lending Program and other relevant areas. The forum periodically convenes to review and assess the overall quality and appropriateness of execution. Its purpose is to evaluate business activities in accordance with this policy, identify any deficiencies or recommended changes, and determine if action is required to address such issues.

iii. Compliance Oversight
SGI's Compliance department conducts independent monitoring of the Securities Lending Program to ensure adherence to relevant regulations and policies.

iv. Management Reporting
Regular management reporting, inclusive of execution-related data, is generated and distributed to provide program oversight.

Legal notices and disclaimer

The information contained in this document is proprietary to SGI and is intended for the use of clients and prospective clients. Unauthorized use or distribution of this publication without the prior written permission of SGI is prohibited.