We may combine your order with orders of other customers. By combining your order with those of others we must reasonably believe that we will obtain a more favourable price than if your order had been executed separately However, on occasions aggregation may result in you obtaining a less favourable price.

We will always allocate orders which have been aggregated to our private clients within one business day of completing the transaction, or as soon as it is reasonably practical to do so. When deciding how to allocate an aggregated order we will not give unfair preference to any client or group of clients.

BEST EXECUTION POLICY

The firm has an obligation to execute orders on behalf of its clients on terms that are the most favourable at the time the order is executed. We take into account execution factors such as price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of an order.

The firm does not act as principle to any trade. Therefore, when trades are negotiated with other market participants, the firm is acting as agent.

The firm currently uses two electronic dealing platforms, Pro-Quote and Thomson Financial. Once the firm’s trader requests a quote price for a particular stock the platforms choose from the current Retail Service Providers (RSP) (member firms of the London Stock Exchange) who offer quotes in that stock, the current best bid or offer price. The trader can hold that price for 20 seconds. Once a quote has been obtained the dealer will execute the order should that price be acceptable to you unless he is instructed to re-quote. That quote, if accepted is deemed to be the best possible price even if the price changes within the 20 seconds before actual execution of the trade. We assume that any price change within 20 seconds would not make the original quote manifestly out of date.

The firm uses two electronic trading platforms to assist with business continuation, however it is possible there maybe a very slight price difference between the RSP’s quoting on the two platforms, which ever platform the dealer uses will be deemed to be in line with the firm’s best execution policy.

Where electronic trading facilities do not exist the firm will telephone the RSP’s who are making the best quote in the chosen financial instrument to place the order at the best price possible taking into consideration the size of the order and the speed of execution.

Currently the firm executes trades on regulated markets such as the London Stock Exchange (LSE) and Multilateral Trading Facilities (MTF) such as Aim or Plus Markets. Before we would be able to execute a trade outside of these markets we  require your prior consent on a bargain by bargain basis, outside these markets could be over the counter (OTC) or agency cross by crossing your order with that of an opposing client.

Unit trust deals are traded directly with the individual managers at a fixed price on any given dealing day, these prices are usually available in financial sections of newspapers or on the managers own websites.

When dealing in a financial instrument we will exercise our discretion in assessing the criteria we need to take into account to ensure we provide best execution, this criteria for instance may be safe custody charges, execution venue fees or clearing and settlement fees. However our aim is to deliver the best possible result in line with this execution policy.

Orders will normally be executed in the same order as they are received except where there are special conditions such as price limits or limited liquidity.

Please note that any specific dealing instruction from you may prevent us from taking the steps within this policy to obtain the best possible result for you.

We will monitor the effectiveness of this policy and should a material change occur we will post an updated version of this document on our website at www.pilling.co.uk.

This policy came into force November 1^st 2007, clients dealing through us on or after that date will have been deemed to have accepted our policy.

YOUR RIGHTS TO CANCEL OR WITHDRAW

Generally, when we execute a transaction on your behalf, regardless of whether it is on a discretionary, investment managed, advisory or execution only basis, you will not have the right to cancel the transaction after it has been dealt.

However, FSA rules do provide a right to cancel (post-contract) certain types of insurance contracts and pension schemes and, where advice has been given, you may also be allowed a short period in which to withdraw from a contract to invest in a packaged product and PEP/ISA saving scheme. You may not always get back the full amount invested when cancelling due to market valuation and bid/offer spreads. If any of these rights apply to your transactions you will be told the details at the time.

YOUR MONEY

We can only deal with your money in accordance with the client money regulations of the FSA which, amongst other things, require us to ensure that your funds are clearly segregated from our own in special trust status accounts at banks which are approved by the FSA and subject to an annual risk assessment by us.

Your money however will be held by the approved bank(s) in a pooled account with other clients’ money and will not therefore be separately designated with your name. In the unlikely event of the failure of the approved bank resulting in an unreconcilable shortfall, clients may share in that shortfall in proportion to their share of the cash in the pool.

The above paragraphs also apply to overseas banks or branches of approved banks situated outside the United Kingdom. You should be aware that client money held in such banks may not be protected as effectively as if held in banks in the UK. The legal and regulatory regime applying to banks in overseas jurisdictions will be different from that operating in the UK. In the event of failure of a bank overseas your money may be treated in a different manner from that which would apply in the UK.

If you wish us to hold your money in an account outside the UK or a deposit account other than a PEP, ISA, CTF or SIPP account  please provide your written consent via our Client Agreement.

INTEREST PAYABLE TO YOU

Money that is not due for settlement of an investment transaction and which we are holding for you at an approved bank (sometimes referred to as “free money”) shall accrue gross interest at a rate determined by us.  Any interest properly due will be credited to your account with us on a quarterly basis. Please note we do not credit interest amounts of less than £1.00.  Our current rates are always available on request.

SETTLEMENT OF TRANSACTIONS AND AMOUNTS DUE

Unless otherwise agreed, you are required to settle all your accounts with us in accordance with the prevailing Stock Exchange Rolling Settlement standard terms. These currently require that each transaction is settled individually within 3 business days of dealing. Netting off purchases against sales is not therefore permitted unless the stock has been delivered in good order and is for the same settlement date.

The appropriate settlement date will be notified to you on a Contract Note (see “Our Charges and Notification of Transaction Details” section) which you should receive a few days after the transaction. No other demand or advice of payment will be issued to you. Statements of account will be available for information purposes only. The settlement date stated on the contract note is the day on which we as your agent are required to transfer cleared funds or share certificates to the exchange or clearing system processing your transaction. You must therefore ensure that cleared funds and certificates reach us well before this date to enable us to comply with the delivery deadlines. Failure to meet your obligations will entitle us to pass on to you any fines or additional costs imposed on us and claim any of your assets held or controlled by us on your behalf in satisfaction of amounts due (see “Default Remedies” section).

The rules of the Stock Exchange allow us to arrange special non-standard settlement terms. Such arrangements are negotiable on a deal by deal basis and the terms will be notified to you on a contract note.

DEFAULT REMEDIES

In the event of your failure to make any payment or to deliver any securities due to us (or to agents used by us) we reserve the right to retain any funds, securities or other assets due to you and to offset the liability against them.

If you have more than one account with us, we reserve the right to set off the debit on one account against the investments on another, likewise debits on connected accounts (e.g. between spouses, children or partners or third party instructions have been accepted) may be offset against available investments in the connected account.

Please take note that we reserve the following rights to retain or make deductions from amounts which we owe you or are holding for you:

• payment for sale transactions will not be made until we are in a position to deliver the investment and ourselves receive payment.
   

• we will deduct from payments due to you any dividends claimed against us that are due to the purchaser arising from a sale made by you.
   

• we shall retain amounts properly due to us in respect of fees, commissions, fines, interest or any other debts owed by you to us.

Please take note that we reserve the right to sell or realise any investment which we are holding (or entitled to receive) on your behalf in order to meet any liabilities you may have incurred to us.

• our right to sell any such investment will arise immediately upon default by you in making payment of any amount due to us and in that event we are entitled to sell or dispose of all or any part of such investment (whether these be investments in respect of which the default arises or any other investments for the time being held by us or which we are entitled to receive on your behalf)  after the expiry of any statutory notice period.

• we shall not be liable to you in respect of any loss arising nor in respect of any choice made by us in selecting the investments to be sold. We will apply the proceeds of sale (net of costs) in or towards discharge of your liabilities to us and will account to you for the balance.

• in the event that such proceeds are insufficient to cover the whole of your liabilities to us, you remain liable for the balance.

• we shall be entitled, without further reference to you, to buy any investment in the market to close any short position created by you and then, subject to any statutory notice period, sell or dispose of any other investments held by us or which we are entitled to receive on your behalf to satisfy in whole or in part the sums due on settlement of any such purchase and its associated costs.

• we shall not be responsible for advising you about the investment merits of any transactions effected by us pursuant to this section which in all cases will be treated as execution only deals.

Please take note that if you fail to pay us in full any amount in pounds sterling (£) when due to us you will be charged interest on the day-to-day balance outstanding as follows:

• interest will be charged if we do not receive cleared funds on or before settlement day to cover the net cost of any security you have bought, including commission and charges but less the proceeds of sales made for settlement the same day.

• interest will be charged if you fail to deliver certificates for securities you have sold on or before settlement day and we are required, under the rules of any exchange or clearing house, ourselves to purchase the same securities to deliver to the market.

• interest will also be charged if you sell securities in order to cover the cost of purchases for settlement on the same day but fail to deliver the certificates for the sales in time for us to obtain the proceeds from the market to pay for the purchases.

• the rate of interest applied will be the HSBC bank’s base rate plus 15% per annum or 20% per annum whichever is the greater.

• such interest will be debited to your account and compounded daily commencing from the close of business on the date the amount was due until cleared funds are received by us.

• such amounts will be shown on the statement of account sent to you at the end of each calendar month.

CUSTODY OF YOUR INVESTMENTS

Your investments will be registered in your own name unless they relate to a PEP, ISA, CTF or SIPP in which case they have to be registered in the name of our nominee company, St. Anns Square Nominees Limited (SASNL). You may also request that any financial product purchased through us (except bearer stock) be registered in our nominee company. These will be held in certificated form at our offices or with an overseas nominee / custodian approved by us (and subject to an annual risk assessment in accordance with FSA rules) or held to our order within CREST, the Stock Exchange’s paperless settlement system. If you would like to make use of our nominee company please provide your consent to these arrangements by completing the appropriate box in the “Notification Of Services Required” section in the client agreement.

Generally, all CREST eligible stocks dealt through us will be held within the CREST system in a form that enables identical stocks, although registered in the name of SASNL, to be identified as being attributable to individual clients. However, there may be occasions when identical stocks are pooled together within CREST, or at another custodian, as one block under the title of SASNL only. These cannot then be attributable to any individual client. The only evidence of beneficial ownership will therefore be an electronic bookkeeping entry at Pilling & Co. In these circumstances you are warned that, in the event of an unreconcilable shortfall after the failure of a custodian, clients may share in that shortfall in proportion to their original share of the assets in the pool.

Bearer or other non-registered investments are normally held as Pilling & Co “A/c Client” by  one or more third parties such as banks, clearance systems and overseas agents.

• We will issue to you at least once in any 12 month period details of all investments held on your behalf by us or any other third party.

• Documentation and entitlements in respect of own name stock held in safe custody will be sent to you by the relevant company at the address on their register.

• We will not be responsible for taking up any rights, exercising any conversion or subscription rights, dealing with takeovers or other offers or capital re-organisations, exercising voting rights, exercising options, claiming or distributing shareholder perks, company reports or other shareholder communications.

• Where your investments are held in the name of SASNL we will use our best endeavours to ascertain and execute your requirements regarding the above only if practical to do so but in any event we cannot be held liable for any loss or inconvenience if your response is too late for us to meet any deadlines. Where investments are pooled, entitlements are allocated on a “pro rata” basis and are rounded down to the nearest whole unit.

If you wish to have purchases registered in your own name and certificates sent to you, please provide registration details in the client agreement. However, please note that you will be responsible for notifying the relevant company of any changes to these details (eg. If you move house). You should be aware that our ability to comply with your request may be restricted by, for example, Inland Revenue rules governing PEP / ISA investments, and we may not be able to effect sales on your behalf at short notice if we do not have the certificates and signed transfer documents already in our possession.

• Please take note that custodians located outside UK regulatory jurisdiction may not provide the same level of protection as UK based firms. Overseas jurisdictions will have different settlement, legal and regulatory requirements and there may also be different practices for the separate identification of safe custody investments.
   

• You should also be aware that dividends on stock held overseas will initially be paid into the bank account of the custodian concerned before onward transmission to us. Please take note of the warning in the “Your Money” section regarding the effect of different legal and regulatory regimes applying to banks in overseas jurisdictions.

• Where third parties or any other persons holding your investments in their own name or for the account of Pilling & Co (A/C Client) are not connected with us, we do not accept responsibility for their safe custody obligations.

SASNL is not separately authorised by the FSA but is subject to its regulation via Pilling & Co. and thereby within the jurisdiction of the statutory complaints and compensation schemes set up under the Financial Services and Markets Act (see Complaints Procedure and Compensation Section). We recommend that you read the Nominee Services section of our Stockbroking Services brochure for more details on the contractual relationship between Pilling & Co and SASNL and the additional independent insurance arrangements we maintain to protect your assets.

INSTRUCTIONS

Unless agreed otherwise in writing, we will act on any instructions we reasonably believe came from you to enter transactions or deal with your assets, regardless of the circumstances. and method of communication.

If you wish another person (friend or relative) or another firm (solicitor, accountant, financial adviser) to deal with us as your agent you must notify us in writing. Please use the appropriate section in the client agreement to identify your representative and tell us of any restrictions concerning their authority to act on your behalf. We will not be liable for any loss or inconvenience suffered by you if we act on any instruction, consent or information given to us by your agent within the limits specified by you.

ANTI - MONEY LAUNDERING REGULATIONS

We are required by Government regulations to establish and maintain specific policies and procedures to guard against our business and financial systems being used for the purpose of money laundering.

We therefore request that you assist our due compliance with these regulations by promptly providing all identification documents and any other explanations that our staff may  ask for before opening a new account or instructing any qualifying transactions on an existing account. Therefore, there may be occasions when we cannot deal for you immediately and we may be obliged to report the circumstances to the appropriate enforcement authority.

COMPLAINTS PROCEDURE AND COMPENSATION

If at any time you become dissatisfied with some aspect of the services and operations of Pilling & Co you are recommended to contact any manager at Henry Pilling House, Booth Street, Manchester M2 4AF and request a copy of our internal complaints handling procedure leaflet.

This leaflet contains the FSA definition of a complaint and the senior member of our staff nominated to receive and deal with complaints. This person is obliged to investigate and report on any eligible complaint in accordance with a strict timetable.

Pilling & Co is also subject to the jurisdiction of the Financial Ombudsman Service (FOS). This is a Government sponsored service that provides consumers with a free and independent channel for resolving disputes with financial firms. A booklet describing the operation of FOS and how to contact them is also available on request from any member of staff.

In order to protect our clients, we maintain at our own choice and expense extensive financial risks cover and in addition to this, we subscribe to the Financial Services Compensation Scheme (FSCS). This is a Government backed  “last resort” scheme that can provide up to £48,000 to cover certain non-trading losses suffered by eligible complainants following the financial failure of a regulated firm. Further information about the FSCS and contact details are available from us on request.

GENERAL

• Exclusion of Liability - subject to the rules of the FSA, neither we nor our employees, agents and delegates, and SASNL shall be liable for any loss suffered by you under this agreement unless such loss arises from our or their proven negligence, wilful default or fraud.
   

• Our Right to Decline your Business - we shall not be required to do any act or refrain from doing any act which would, in our opinion, infringe any applicable laws or regulations, including the rules and customs of any exchange on which your transactions are effected. At all times we reserve the right to refuse to execute transactions for you or provide any of the services listed in our Stockbroking Services brochure for any reason and without explanation.
   

• Indemnity - subject to the rules of the FSA, you will indemnify us, our employees, agents, delegates and SASNL against any cost, loss, liability or expense whatsoever which may be suffered or incurred by us or them directly or indirectly in connection with or as a result of any service performed or action permitted under this Agreement, including without limitation, any expense or loss we or they may incur in connection with or as a result of any claims or proceedings which you make or bring against us or them and which are withdrawn, discontinued, compromised or dismissed, except to the extent that such costs, liability or expenses are due to our or their proven negligence, wilful default or fraud.
   

• Confidentiality - we shall not, except as permitted by this Agreement or as required by law, the rules of the FSA and the rules and regulations of any exchange on which an investment is dealt, disclose any confidential information relating to you or your dealings.
   

• Variation of Terms and Charges - at all times we reserve the right to add new terms or delete or modify existing terms in this Agreement or change any of our charges without prior notice or consultation with you. We will however always use our “best endeavours” to contact you at least 10 business days in advance of any alterations and in any event you will remain bound by existing terms and charges until you know about, or ought reasonably be aware of, the changes, except in the case of statutory or regulatory changes which are immediately enforceable.
   

• Joint Accounts - in the case of a joint account, the rights and obligations under this Agreement shall be joint and several.
   

• Simplified Prospectus / Key Features Document— we fully comply with the FSA requirement to make available a “Simplified Prospectus” or “Key Features Document” where required for each of the packaged products we recommend you to buy or sell. These documents are marketing tools containing important information about the fund and we recommend you read these before buying, selling or switching investments in packaged products.
   

• Data Protection—the firm is registered under the data Protection Act as a controller of information, telephone calls to our office may be recorded for the sole purposes of clearing any disputes that may arise or for staff training.

TERMINATION

You may terminate this Agreement (but not a Supplementary Agreement - see the client agreement) at any time by sending us written notice which will take effect from the date it is received by us.

We may terminate this Agreement by sending you written notice which will specify the date on which termination will take place.

• No penalty will become due from either you or us in respect of the termination of this agreement, however initiated.
   

• Termination will not affect completion of any outstanding order or transaction permitted under this Agreement which may have arisen prior to the effective date of termination.
   

• We will be entitled to receive from you all commissions, fees, costs, charges and expenses accrued or incurred up to the date of termination, including any additional expenses or losses necessarily incurred in the termination process. This may include any charges incurred in arranging for the transfer of your investments either to you or to your new investment adviser.(0208)