Conflicts of interest policy

1Purpose

This policy sets out how NIO X PTE. LTD., a company registered in Singapore that operates the NioX spot exchange, identifies, prevents, manages and where necessary discloses conflicts of interest. It is binding on NioX and on every director, officer, employee, contractor and connected party who acts for NioX or on its behalf.

NioX places prevention above disclosure. Disclosure is a measure of last resort and never replaces the proper management of a conflict. Where a conflict cannot be prevented or managed to a standard that protects the account holder, NioX will decline to act rather than proceed.

NioX maintains the controls described here as part of the permissions under which it is authorised to operate its spot exchange. NioX reserves the right to amend this policy at any time, to extend it to new products, asset classes and business lines as they are introduced, and to apply standards stricter than any minimum required of it.

2Types of conflict

A conflict of interest arises wherever the interest of NioX, of a member of its staff or of a connected party competes with a duty owed to an account holder, and wherever the interest of one account holder competes with that of another. Conflicts can arise between NioX and an account holder, between one account holder and another, and between a member of staff or a connected party and an account holder. Each situation set out below is treated as one that gives rise to a conflict that must be recorded and managed.

• NioX or an affiliate stands to gain from a decision that affects an account holder, including a decision on listing, delisting, suspension or fees.
• A member of staff or a connected party owns, deals in or holds an economic interest in an asset that is listed or is being considered for listing.
• A business, ownership or personal relationship exists with an issuer, a market maker or an account holder whose activity NioX reviews or supervises.
• Remuneration, revenue or incentives rise or fall with the trading of a particular account holder or with a particular listing.
• A member of staff can reach order flow, client data, unpublished listing decisions or surveillance findings.
• The interests of two or more account holders compete for the same limited opportunity or outcome on the exchange.
• A new product, asset type or technology creates an interest that did not exist when this policy was last reviewed.

3Structural prevention

NioX operates as a matching venue. NioX does not trade its own book against the orders of account holders, takes no proprietary position for the purpose of profiting from client order flow, and runs no proprietary trading or market making desk that competes with account holders.

Where NioX or an affiliate must hold an asset for treasury, custody or operational reasons, that holding is governed by strict internal controls, is kept apart from client facing functions, and is never informed by non public client order information. The measures below are built into the way NioX operates so that conflicts are prevented at source.

• Market data and order handling are provided to every account holder on equal terms, and no order receives priority beyond published price and time rules.
• Execution follows objective and published rules that NioX applies consistently and does not vary for the benefit of NioX or of any single account holder.
• Access to systems and information is granted only to those whose role genuinely requires it.
• The remuneration of compliance and surveillance staff is set independently of trading volume and of listing revenue.

4Listing and market supervision

NioX keeps the function that decides on listings separate from the function that supervises the market. A listing committee decides whether an asset is admitted or removed, and the market surveillance function monitors trading and conduct on the exchange.

Neither function reports to the commercial side of the business and neither can override the other. The commercial side holds no casting vote on a listing and no influence over surveillance. NioX takes no payment, equity or other benefit in return for a listing, for a listing decision or for any surveillance outcome.

The surveillance function may restrict, suspend or remove an asset, and may restrict or close an account, on its own authority and without regard to commercial consequences, wherever it judges this necessary to protect the market or account holders. NioX reserves this right in full.

5Information barriers

NioX operates information barriers to control material non public information. Material non public information includes unpublished listing and delisting decisions, order flow and client data, surveillance findings, and any information that a reasonable account holder would treat as relevant to a trading decision and that has not been made public.

Access to such information is restricted to named roles on a need to know basis and is recorded. NioX maintains restricted lists and watch lists, controls any crossing of an information barrier through a documented and approved procedure, and monitors staff communications and dealing for compliance.

No member of staff and no connected party may trade on, disclose or otherwise misuse material non public information. This obligation continues after the person leaves NioX for as long as the information remains non public.

6Personal account dealing

The rules below bind every director, officer, employee and contractor of NioX and extend to their connected parties, including close family members and any account over which the person has control or influence.

1. Every holding in a listed asset and every trading account must be declared on joining and updated whenever it changes, and NioX may require brokerage or exchange statements as evidence.
2. Every personal trade in a listed asset requires pre clearance from compliance before it is placed, and that clearance is valid only for the trading day on which it is granted.
3. No personal trade may be placed while the person holds material non public information about the asset, including any unpublished listing or delisting decision.
4. Every cleared trade is subject to a minimum holding period, and trading in and out of an asset over the short run to profit from a price move is prohibited.
5. NioX may set blackout periods, refuse clearance, require a trade to be reversed or require any resulting profit to be surrendered, at its discretion.
6. These restrictions apply in full to any dealing in the assets of NioX and of its affiliates.

7Gifts and inducements

NioX and its staff must decline any gift, payment or non monetary benefit, whether offered or solicited, that could impair or appear to impair the independence of a decision owed to an account holder. NioX does not pay for order flow and does not receive payment for order flow.

A minor non monetary benefit may be accepted only where it is capable of raising the quality of the service to account holders, where it creates no conflict, and where it is recorded in the gifts and inducements register. NioX sets, and may lower, the threshold above which any benefit must be refused or escalated.

8Management and recording

Every conflict that is identified is entered in a conflicts register together with the people and functions it affects, the measure applied, the owner of that measure and the date it was recorded. NioX reviews the register at least once a year, and again whenever a new conflict comes to light or a change in its business, products or markets makes a review necessary.

Where no measure can give NioX reasonable confidence that the risk of harm to an account holder has been prevented, NioX discloses the conflict to that account holder in durable form and in enough detail to allow an informed decision, before the relevant service is provided. Disclosure remains a last resort and does not release NioX from its duty to manage the conflict.

Records made under this policy are retained for the period required of NioX and are subject to independent review. NioX reserves the right to escalate any conflict to its board and to a competent authority.

9Consequences of a breach

A breach of this policy is a serious matter. Where a member of staff or a connected party breaches this policy, NioX may take disciplinary action up to and including dismissal, may withhold or reclaim remuneration or profit, may suspend access to systems and information, and may refer the matter to a competent authority and to law enforcement.

Where an account holder or a third party causes or exploits a conflict in breach of the terms on which NioX is used, NioX may restrict, suspend or close the account, may cancel or reverse affected activity to the extent permitted, may withhold assets pending investigation, and may pursue any remedy available to it in law. NioX reserves each of these rights and may exercise them at its sole discretion and without prior notice where the circumstances require, to the fullest extent permitted by law.

10Governance

This policy is approved by the board of NIO X PTE. LTD., which is briefed on the conflicts register at least once a year. Compliance operates independently of the commercial side of the business and reports to the board.

Awareness of this policy is built into induction and into annual refresher training, and adherence to it is a condition of employment and of engagement with NioX. NioX operates a channel through which staff may report a suspected conflict or breach in confidence and without fear of retaliation.

NioX keeps this policy under review so that it continues to meet the standards expected of a regulated venue and so that it anticipates conflicts that may arise from new products, new asset types and new technology. NioX reserves the right to update this policy and its controls at any time, and the current version published by NioX prevails.