Policy on Block Trading for Investment Trusts

1. Basic approach

Sumitomo Mitsui DS Asset Management (SMDAM) may place block trade orders with the same terms of trade for a number of investment trust assets managed by SMDAM. SMDAM may also place orders to buy or sell in a block by combining investment trust assets, assets managed based on discretionary investment management contracts, and investment corporation assets managed under asset management agreements.

2. Securities concerned

Block trading will be limited to domestic stocks (including beneficiary securities of an investment trust and investment securities, etc.) listed or registered on a financial instruments exchange market or an over-the-counter securities market.

3. Transactions concerned

Block trading will be limited to cash transactions.

4. Contract unit price

The contract unit price applicable to block trading will be the average unit price.

5. Allocation of transaction results

If transactions ordered in a block are partially completed (i.e., if the total amount of transactions completed is below the total amount of orders), the results of the transactions will be allocated to each of the invested assets concerned (hereinafter “accounts”) according to the following method.

(1)Proportional allocation of transactions

Amount of transactions ordered for all accounts x (total amount of transactions ÷ total amount of orders)

(2)Allocation or residual amount

  1. The residual amount generated from the results of “(1) Proportional allocation of transactions” will be allocated in minimum trading units to accounts in order of the size of their truncated fractional amounts below the unit of trading from “(1) Proportional allocation of transactions.”
  2. If “(2) Allocation of residual amount ①” results in the same adequacy ratio for the amount of transactions relative to the order amount of each account, the allocation to accounts will be determined in accordance with SMDAM’s internal rules.

6. Basic policy for best execution

SMDAM will endeavor to achieve the best execution based on comprehensive consideration of market conditions, prices, and other factors. SMDAM may also divide block trading based on consideration of best execution.

7. Internal management system

To ensure appropriate execution conditions of block trading, SMDAM will formulate internal rules and ensure that all relevant departments have a thorough understanding of these. The status of implementation of these rules will also be verified by the management department.

8. Definition of terms

Terms that appear above are defined as follows.

  1. “Block trading” means a bundled order to buy or sell securities pertaining to multiple accounts.
  2. “Order to buy or sell” means a request to place an order for securities from the investment management division to the order division.
  3. “Terms of trade” means the type and issue of securities, by buy order and sell order, type of transaction, and execution price or price range.
  4. “Average unit price” means the price calculated by dividing the total value of transactions pertaining to a block trade by the total amount of transactions.