Handling corporate actions such as income payments and distributions and any interest payments

Transcription

1 Terms and Conditions Introduction The Application Form, the Declaration and the attached Terms and Conditions will constitute a legally binding contract between you and Nucleus. The Nucleus Wrap is an online service that acts as an intermediary in allowing you and your Adviser to buy and sell a range of Assets in an efficient and transparent manner. These Terms and Conditions explain how Nucleus will open and manage the Nucleus Wrap in accordance with the instructions that Nucleus receives from you and your Adviser. In addition, the charges you can expect to pay for the Services, your rights, and what you should do if you would like to make a complaint are explained. Nucleus will provide you with the following services (the Services ): Managing all inflows and outflows of client money Accepting, executing and settling investment instructions Handling corporate actions such as income payments and distributions and any interest payments Deducting all fees and charges and applying any asset management charge rebates Maintaining a record of the value of your assets with the Nucleus Wrap and the transactions within this A six monthly summary of your Nucleus Wrap and details of all the transactions that have occurred since your last statement, and an annual statement of the income and distributions received Nucleus will not provide any other services to you. Nucleus is not permitted to provide investment advice and cannot provide any advice to you on either the merits of using the Services or any Assets available through the Services. Nucleus does not recommend or endorse any Asset available through the Services. Nothing in the Services constitutes an offer or inducement to sell investments to anyone in any jurisdiction in which such an offer or inducement would be unlawful. Any news, prices, opinions, and other information which Nucleus may provide to you is provided solely to enable you to make your own investment decisions and does not constitute personal investment recommendations or advice. If you have any queries regarding the use of the Services or its relevance to you, you should speak to your Adviser. In relation to the Services which are provided in conjunction with your Adviser you should: be aware that Nucleus only accepts instructions on cleared funds and that the proceeds from sell transactions will not be available for withdrawal or reinvestment until the settlement proceeds have been 0002P.7

2 applied to your Account; however, for an investment switch instruction which consists of one or more buy transactions following one or more sell transactions, the buy instructions will be placed once all of the sell instruction(s) have been confirmed, unless the switch instruction relates to Assets that are non-daily traded funds and Assets that are subject to a redemption penalty ; as a result there may be incidences where you may be disinvested for a period and subject to potentially adverse market movements; be aware of the Minimum Cash Requirement and the actions that Nucleus may take should this be breached, as explained in the section on cash below; understand and comply with any voluntary aspects relating to corporate actions for Assets held through the Nucleus Wrap, as explained in the section on corporate actions below; be aware that you agree that your Adviser is duly authorised to provide Nucleus with instructions on your behalf; and be aware of any additional terms and conditions (such as minimum deal sizes, dealing constraints such as non daily traded Assets, or potential dealing delays for Assets that deal infrequently or hold illiquid Assets which may result in dealing delays) that apply to Assets chosen by you and/or your Adviser that are held through the Nucleus platform. You must notify Nucleus as soon as possible if you believe Nucleus has made an error and before the date 14 Business Days after receipt by you of confirmation of any transaction. You must ensure that you or your Adviser advises Nucleus of any changes to your contact details. Nucleus Financial Services Limited is authorised and regulated by the FSA. Definitions The following expressions have these meanings throughout these Terms and Conditions: Act means the Financial Services and Markets Act 2000 (as amended from time to time) Account means any tax or legal structure available as part of the Services from time to time. Accounts include without limitation the General Account, Isa Account, Pension Account, Protected Rights Pension Account, APP Pension Account, and the Nucleus Share Dealing Account as more particularly described below. Adviser means any financial adviser employed by or otherwise engaged by an IFA firm that is authorised and regulated by the FSA and authorised to use the Nucleus Wrap. Agreement means this document, any associated Account policy conditions, and the Declaration and the Application Form. Annual Allowance means the limit on how much tax-free pension savings you can make in any one tax year Application Form means the application form and Declaration signed by you 2

3 Asset means cash, securities, mutual funds and any other asset that may be held or traded within your Portfolio Business Day means any day on which the London Stock Exchange is open for business Client Money Rules means the client money rules set out in the FSA Client Assets rules as amended from time to time Conflicts Policy means the conflicts policy relating to the Nucleus Share Dealing Account as amended from time to time which may be viewed via the Website. Declaration means the declaration signed by you in relation to the type of Accounts held by you DWP means Department of Work and Pensions or the relevant Government department for pensions tax relief Flagged Securities means Assets that trade less frequently than daily, have minimum trade sizes, have restrictions on when they can be redeemed or sold, or any other features which Nucleus choose to highlight on the Website from time to time FSA means the Financial Services Authority IFA firm means any firm acting on your behalf under this Agreement HMRC means Her Majesty s Revenue & Customs Lifetime Allowance means the HMRC limit for the total value of all of the benefits built up in your pension arrangements by you and/or your employer (including investment growth) above which the sums are subject to a 'lifetime allowance charge' which applies in addition to the usual income tax due on pension payments Nucleus means Nucleus Financial Services Limited, (registered in England & Wales number with registered office: Carrick House, Lypiatt Road, Cheltenham GL50 2QJ), which is authorised and regulated by the FSA (number ), and any other parties that are from time to time delegated to provide part or all of the Services Nucleus Wrap means the Services Nucleus Stockbroker means the stockbroker appointed by Nucleus to deal in and hold as custodian investments such as company shares in the name of Nucleus but on behalf of the Client which Nucleus does not support directly Order Execution Policy means the order execution policy relating to the Nucleus Share Dealing Account as amended from time to time which may be viewed via the Website Portfolio means the Assets held by Nucleus or any provider of the Accounts on your behalf Retirement Age means the legal age after which you are allowed to receive pension benefits. For most people this is currently 50 but will rise to 55 in

4 Regulations means the relevant legislative and regulatory rules governing each of the Accounts Scheme Administrator means Scottish Friendly Insurance Services Limited (registered in Scotland number SC with registered office: Scottish Friendly House, 16 Blythswood Square, Glasgow, G2 4JH, a registered Pension Scheme Administrator) Third Party means any external investment manager, stockbroker, or other party involved in your transaction Website mean whether accessed directly or via the website of an IFA firm you and your means the applicant for the Services details of which are set out in the Application Form Opening Once the Nucleus Wrap has been opened you will be sent a welcome letter confirming the details of the Nucleus Wrap and offering you the right to cancel within 30 Business Days. This Agreement will come into force when Nucleus sends you the welcome letter. Where an Account is opened in more than one name it will be held as a joint Account with the right of survivorship, and each of the joint clients will be jointly and severally liable to meet the obligations of this Agreement. If you wish to have online access once the Nucleus Wrap has been opened you should consult your Adviser. Nucleus is unable to accept investments from anyone resident in the United States of America. Cash The cash in each Account will be held in a client money account under the Client Money Rules and kept apart from Nucleus and other Account providers own money at all times. Details of the bank used and the interest rates that apply are available on request. Interest on cash will be calculated daily and applied quarterly either net or gross according to the tax rules of the Account in which the cash is being held. While all interest received on Nucleus client money is allocated to your Account(s), timing differences between when the Nucleus platform records payments and the actual movement of money into or out of your Account(s), and/or the deduction of any applicable bank charges, mean that there is usually a small difference between the headline rate paid by the bank and the effective rate received on individual Account(s). You should be aware that the cash held in each Account will be debited with charges, and may be credited with rebates of tax and charges, interest, dividends and other income from time to time. You are required to maintain at least 2 per cent of the total value of the Assets in each Account in cash at all times (the Minimum Cash Requirement ). Should this limit be breached Nucleus will notify your Adviser who may contact you to discuss whether you wish to deposit further cash (where the Regulations permit) or sell other Assets in the Account to ensure the Minimum Cash Requirement is met. If at any time the cash balance in any single Account falls below 1 per cent of the value of the Assets in that Account, Nucleus will sell Assets to restore the cash balance to 2 per cent plus the value of any anticipated fees 4

5 and withdrawals over the next three months. Unless you have told Nucleus which Assets should be prioritised for such a sale Nucleus will immediately sell Assets at its discretion. The Assets sold will exclude Flagged Securities and you should be aware that such a sale could result in a tax charge. Investing money and the Account providers You must invest a single payment of at least 20,000 to utilise the Nucleus Wrap, although this may be allocated across more than one Account. Thereafter you can make single payments of no less than 1,000 and regular payments of no less than an equivalent of 2,400 each year. In addition to new investments, you may transfer existing Assets into the Nucleus Wrap. In general terms you can transfer any directly held Assets into the General Account, and any existing Isa or pension investments may be reregistered or transferred in cash into the corresponding Nucleus Account. You should be aware that the existing provider may levy costs or penalties associated for such transfers and you should consult your Adviser for an analysis of the charges pre- and post-transfer. Nucleus will endeavour to facilitate such transfers, but will be reliant on existing providers and does not accept any responsibility or liability in relation to either the time it takes to transfer or reregister assets, or any changes to the value calculated by the existing provider during this period. Nucleus reserves the right to not accept an investment at any time without giving reason and reserves the right to close the Nucleus Wrap should the aggregate value of your Accounts fall below 10,000. From time to time Nucleus or a Third Party may require additional identification documentation for legal or regulatory purposes. Nucleus will notify you if this is the case and may not be able to accept an investment until the same is provided. The providers of each of the Accounts that make up the Nucleus Wrap, together with a guide to any maximum investment amounts, are described below. Your Adviser is responsible for informing you of any Regulations which may apply to these Accounts. The terms which apply to an Account will be notified to you when you first apply for the Account. Other than as set out in the terms of the Nucleus General Account, Nucleus has no responsibility for the performance of each Account. Your contract for an Account is with the provider of that Account. The underlying securities in each Account will be the responsibility of the provider of the relevant Account save for the Nucleus Share Dealing Account in which the shares may be owned by the Nucleus Stockbrokers nominee companies or third parties. Nucleus General Account: provided by Nucleus Financial Services Limited, authorised and regulated by the FSA. There are no upper limits on how much you can invest in the Nucleus General Account. Nucleus Isa Account: a stocks and shares Isa provided by Scottish Friendly Insurance Services Limited, an HMRC approved Isa manager authorised and regulated by the FSA. Your Adviser will be able to advise you on the current HMRC limits that apply to contributions in any tax year. You should note that if you withdraw capital from an Isa you may not reinvest the same amount without the subsequent investment contributing to your Annual Allowance. Nucleus Pension Account and Nucleus Protected Rights (PR) Pension Account: provided by the Scottish Friendly Self Invested Personal Pension Scheme established by Scottish Friendly Assurance Society Limited and administered by the Scheme Administrator. Tax relieved personal contributions are currently limited to the lesser of your salary and the Annual Allowance in a single UK tax year although you should also note that you are subject to a maximum tax advantaged fund (the Lifetime Allowance) across all your pension arrangements. You should note that withdrawals may only start after Retirement Age and are subject to complex limits. Your Adviser will be able to 5

6 advise you on the current HMRC limits that apply. The PR Pension Account can only accept contributions of contracted-out rebates ( minimum contributions ) and associated tax relief from the DWP or transfers of existing protected rights benefits from another pension arrangement. Nucleus APP Pension Account: provided by the Scottish Friendly Personal Pension Plan, established by the Scottish Friendly Assurance Society Limited and administered by the Scheme Administrator. This Account can only accept contributions of contracted-out rebates ( minimum contributions ) and associated tax relief from the DWP or transfers of existing protected rights benefits from another pension arrangement. This Account is also subject to the Lifetime Allowance. You should note that withdrawals may only start after Retirement Age and are subject to complex limits. You should note that this Account can only invest in Scottish Friendly Life funds which have been set up to replicate a number of select investment funds available to the Nucleus Pension Account. The Nucleus APP Pension Account is closed to new members with effect from 28 October Nucleus Onshore Bond Account: provided by Scottish Friendly Assurance Society Limited which is authorised and regulated by the FSA. This Account is a non-qualifying life assurance bond and can only accept lump sum contributions. You should note that if you are a higher-rate taxpayer and take income from or cash-in a nonqualifying life assurance bond, the proceeds you receive may be subject to income tax. There are no limits on how much you may invest in the Onshore Bond Account. You should note that this Account can only invest in Scottish Friendly Life funds which have been set up to replicate a number of select investment funds available to the Nucleus Offshore Bond Account. Nucleus Offshore Bond Account: provided by Royal London 360 which is authorised and regulated by the FSA. This Account is an offshore insurance bond consisting of a series of identical lump sum segments with no specified term, issued by the Isle of Man Royal London 360 insurance company. To provide flexibility, you may divide your investment in up to 100 individual segments. The minimum investment per segment is 1,000. Withdrawals are subject to a minimum of 250. Nucleus Share Dealing Account: provided by Brewin Dolphin Limited (Company Number: ) whose registered office is at 12 Smithfield Street, London, EC1A 9BD who are authorised and regulated by the FSA and entered in the FSA register with registration number Valuations Nucleus will value your Portfolio on every Business Day, and Portfolio valuations are available via the Website. For Assets that trade less frequently than daily, the most recent trade price will be used. For more unusual or complex Assets the nominal price may be used to value the Asset. You should be aware that if you want to buy and sell holdings in an Asset, these prices will not necessarily be the dealing prices as most funds are priced on a forward basis. This means that the price for a sale or purchase transaction is that calculated at the valuation point after the transaction has been placed with the fund manager. Buying and selling assets Nucleus only accepts instructions on cleared funds. Similarly the proceeds from sale transactions will not be available for withdrawal or reinvestment until the settlement proceeds have been applied to your Account. However, for a switch instruction which consists of one or more buy transactions following one or more sell transactions, the buy instructions are placed as soon as all the sell instruction(s) have been confirmed, unless the 6

7 switch instruction relates to Assets that are non-daily traded funds and Assets that are subject to a redemption penalty. As a result there may be incidences where you have disinvested for a period and subject to potentially adverse market movements. Please also note that for a switch instruction where the buy instructions are placed as soon as all the sell instruction(s) have been confirmed, if for any reason including a fund experiencing financial difficulties the trade fails to settle, Nucleus reserves the right to unwind any trades which rely on the proceeds of the trade that failed to settle. This right will apply even where any such trades have already been reflected in your Account. Once you have opened an Account and your initial investment has cleared, Nucleus will use all reasonable endeavours to ensure that any investment instructions submitted with your application are actioned by Nucleus within one Business Day. Nucleus will use reasonable endeavours to ensure that transactions are confirmed and settled promptly. Nucleus will not be responsible or liable for any financial consequences which may arise from delays associated with the service provided by any Third Party. Should you change your mind regarding an instruction that has not yet been executed Nucleus will use reasonable endeavours to cancel the instruction although Nucleus will not be liable for any financial consequences to you if the instruction proceeds to execution. For investments other than in funds we will send your order to the Nucleus Stockbroker. For Assets, the trading cut off time is normally 10:30 am, although an earlier cut off time may apply for some Assets. For further details contact your Adviser or Nucleus. Each Business Day Nucleus will aggregate and place all instructions by 12:00pm (midday). Instructions received later than the relevant cut off time will normally be aggregated alongside instructions for the following Business Day. For a sale instruction the Asset to be sold will be marked as pending until the trade has been settled. For buy instructions any cash required to fund the Asset purchase will be reserved until the trade has been settled. Where an instruction is received in respect of an Asset that trades less frequently than daily, the instruction may be aggregated alongside more than one Business Day s instructions. For information on which funds do not trade daily please contact your Adviser or Nucleus. Should an Asset become unavailable at any time, Nucleus reserves the right to cancel any pending buy transactions in that asset and to sell any of your holdings in that asset. Nucleus shall not be responsible for any financial loss or tax or other charge that may arise as a result. You should note that provided cleared funds are available, instructions for dealing in any Asset will be aggregated alongside similar instructions wherever possible. There may be situations where you are disadvantaged by aggregation, for example aggregation may result in a dilution levy being triggered. This is usually no greater than 1 per cent of the deal value and further information on dilution levies can be found in the charges section below. The dealing price given to us by a fund manager will be used to calculate your sale proceeds or purchase cost. Please note this may be higher or lower than the published price. 7

8 Share dealing The following documents relate to the operation of your Share Dealing Account: a. these Terms and Conditions; and b. the Order Execution Policy. Size of Order and Frequency of Trade Market rules may prevent Nucleus from carrying out your order electronically where the Nucleus Stockbroker s counterparties make restrictions. Extended Settlement Where Nucleus agrees to effect a transaction with a settlement period which is longer than the standard settlement period for the relevant market, the counterparty will adjust the dealing price to reflect their charges in respect of this extended settlement period. Extended settlement may not always be available and is offered at Nucleus discretion. Custody of Share Dealing Account Investments The Nucleus Stockbroker will hold Nucleus Share Dealing Account investments in its nominee company, or use third party custodians or sub-custodians with whom the Nucleus Stockbroker or its nominee companies have accounts. Your investments will be held and registered: i. in the name of a nominee company controlled by the Nucleus Stockbroker; ii. with a third party custodian and registered in the name of or held to the order of the Nucleus Stockbroker or one of its nominee companies; or iii. with a sub-custodian where it may be registered in the name of the sub-custodian but held to the Nucleus Stockbroker s order. Nominee Companies The Nucleus Stockbroker nominee companies are wholly owned subsidiaries of the Nucleus Stockbroker and have been established solely to hold investments for its clients. Where used, the nominee company will hold the investments, as the legal owner, on Nucleus behalf as the beneficial owner. Nucleus will hold the beneficial interest on your behalf. The investments will appear on the respective company register in the Nucleus Stockbroker s nominee company s name. If necessary for the operation of the Nucleus Share Dealing Account, the Nucleus Stockbroker may transfer investments between any of its nominee companies without further reference to Nucleus or to you or your Adviser. The Nucleus Stockbroker will normally hold your investments in a pooled nominee account. Investments that are registered in one of the Nucleus Stockbroker pooled nominee companies are held along with investments belonging to third parties. This means that individual entitlements will not be separately identifiable on the relevant company register. 8

9 When your investments are pooled you may receive more or less favourable treatment or options when there is a corporate action or other event as they would if the investment were held in a separately designated account with a nominee or custodian, in a CREST Personal Member s account, or in certificated form. For example, following an allocation or share issue that favours the small investor, the allocation in the Nucleus Share Dealing Account may be less than it otherwise would have been if the investments had been registered in your name. Custody of Overseas Investments Investing in foreign securities may give rise to different settlement, legal and regulatory requirements from those in the UK and different practices for the separate identification of investments. Where accounts holding money or investments are outside of English jurisdiction your rights may be different from those that would apply under English law. Investments held by overseas custodians or sub-custodians may not be segregated from the Nucleus Stockbroker s investments or those of the overseas custodian and may be pooled with its other clients and may be registered in the name of the overseas custodian or in the Nucleus Stockbrokers name. Therefore, the level of protection may be less should a default occur on the part of the custodian or sub-custodian. Investments will not necessarily be separately identifiable and may be subject to third party claims made against the Nucleus Stockbroker or the relevant overseas custodian. Overseas custodians may take a lien over investments held by them or that they may be entitled to other security rights over investments or money, including rights of set-off, retention or sale. If the overseas custodian becomes insolvent, the consequences will depend upon the applicable law (which may not be English law) and you bear the risks that may result from this, unless such consequences result directly from the Nucleus Stockbroker s negligence, wilful default or fraud or that of its nominee company. The insolvency may result in delays in settling or transferring your investments or money held. The effect of any applicable law is outside Nucleus control and could, for example, mean that your interests are not recognised as separate from those of a third party. In the event of an irreconcilable shortfall of pooled investments held by an overseas custodian or sub-custodian or in the event of default by the overseas custodian, the Nucleus Stockbroker s clients may not receive their full entitlement and may share in the shortfall in proportion to their original share, or on some other basis in accordance with the applicable law. Stock Lending Nucleus does not lend stock. Market Abuse You agree that you will not deliberately, recklessly or negligently by act or omission engage in market abuse (within the meaning of Part VIII of the Financial Services and Markets Act 2000) or insider dealing (within the meaning of Part V of the Criminal Justice Act 1993), or require or encourage another person to do so. Market abuse is a civil offence, for which the sanctions include an unlimited financial penalty. Insider dealing is a criminal offence for which you can be prosecuted, fined and imprisoned. If you are in any doubt as to your position, you should seek independent legal advice. 9

10 Model Code on Director s Dealing (the Model Code ) If you are a director of a listed company or a senior executive or employee of a listed company you must comply with the Model Code in respect of that listed company. Minimum and maximum deal sizes Assets available through the Nucleus share dealing service have a minimum aggregated deal size of 500 for each Account. Other funds may also have minimum deal sizes which apply for each Account. For further details contact your Adviser or Nucleus. Where an aggregated trade is for less than the minimum deal size the instruction will not be executed until such time as the aggregated trade is for more than the minimum deal size. For security, Nucleus places an upper limit on dealing through the Nucleus Stockbroker. Our current limit is 250,000 and should you wish to place a sum of more than this you must contact Nucleus in advance to agree how such sum will be used. Refusal or deferral of trading instructions Nucleus reserves the right to refuse or defer any trading instruction at any time where it reasonably considers such refusal or deferral is appropriate for operational, regulatory or legal reasons. Nucleus will use all reasonable endeavours to notify you in advance where of the reasons for any such refusal or delayed placement of any instructions, and in such circumstances shall not be held responsible or liable for any financial consequences that arise. Nucleus shall not be held responsible or liable for any financial consequences that arise from any delay or deferral of any trading instruction resulting from Nucleus approach to buying and selling assets noted above, including the requirement to deal on cleared funds, or any maximum or minimum trade sizes that may apply. Portfolio rebalancing Where you invest using a prescribed investment portfolio, a Model Portfolio records the investments you have selected in their set proportions, and subsequent investments may use this investment profile. Over time, as a result of varying investment performance, the proportions of investments will change in relation to your Model Portfolio. You or your Adviser may ask Nucleus to rebalance investments in line with your Model Portfolio. This will involve switching and you should note the terms and conditions that apply to switching as explained in the section on buying and selling assets above. Best execution When dealing with you or your Adviser s requests to use the Services Nucleus will use reasonable endeavours to achieve the best result for you under the circumstances in accordance with the Order Execution Policy. Corporate actions Nucleus will apply distributions, interest and annual management charge rebates received from fund managers and the Nucleus Stockbroker to the Nucleus Wrap. Nucleus will deduct tax from any such payments where this is appropriate. If you require more information on the tax treatment of such payments you should contact your Adviser. Nucleus will not be responsible or liable for any financial consequences which may arise from delays associated with the service provided by any Third Party. 10

11 In relation to other corporate actions our normal policy in respect of any bonus and scrip issues is as follows: All bonus issues will automatically be credited to your Portfolio. In the case of a scrip dividend the default option is to elect to take any cash alternative and Nucleus will not be responsible for informing you that any scrip alternative exists. In all other circumstances, Nucleus will inform your Adviser of any corporate actions relevant to the Asset as soon as reasonably possible after Nucleus becomes aware of the corporate action. Nucleus will not exercise any voting rights attaching to any of the Assets you hold in the Portfolio. Nucleus does not pass on any incidental benefits which may attach to any investments in the portfolio nor does Nucleus benefit from such incidental benefits. It is the responsibility of you and/or your Adviser to understand and address any voluntary aspects relating to any corporate actions relating to Assets held in the Nucleus Wrap and Nucleus will not be responsible or liable for any financial consequences or delays in this regard. If you would like Nucleus to consider any specific requirements or action in relation to the treatment of corporate actions for any of your Accounts please let us know. If Nucleus chooses, at Nucleus sole discretion, to agree to such requests Nucleus reserves the right to levy a charge commensurate with the costs incurred in meeting your requirements. Corporate Actions in Overseas Investments Where overseas custodians inform the Nucleus Stockbroker of the existence of a corporate action affecting your overseas holdings, Nucleus will use reasonable endeavours to relay these rights to you where applicable, whenever practicable to do so and where appropriate advise the Nucleus Stockbroker to advise the overseas custodian of the election by you. If Nucleus receives notice of a corporate event from an overseas custodian in time for Nucleus to process the information and give you or your Adviser an opportunity to instruct Nucleus, then Nucleus will do so but you should be aware that Nucleus may not receive notification of rights attaching to overseas investments or there may be a delay in notification to Nucleus. In such circumstances Nucleus may not be able to inform you and Nucleus may not be able to carry out any instructions in time. Withdrawing money Subject to the tax rules and legislation associated with each Account you can arrange to make one-off or regular withdrawals from an Account at any time. You should note that you cannot generally withdraw money from the Pension Account or the Protected Rights Pension Account until you reach Retirement Age in the UK. Regular withdrawals may be monthly, quarterly or annual and all payments will be made by direct credit to the bank account nominated when you opened the Nucleus Wrap, or otherwise as instructed in writing. You should note that where a withdrawal is due to be made on a day that is not a Business Day, the withdrawal will be made on the Business Day preceding the withdrawal date. 11

12 Depending on the rules applying to each Account, certain withdrawals may be subject to tax or other statutory charges before payment. Nucleus will be responsible for deducting such payments and remitting them to the appropriate authority. All withdrawals are subject to the availability of cleared funds and the rules associated with the Minimum Cash Requirement as described above and a lack of available funds may mean payments are not made. Nucleus will not be responsible for any financial consequences, loss or damages that may arise from the requirement to deal on cleared funds in such circumstances. Payments will be made direct to, or in the name of, you and not to any nominated third parties. Nucleus cannot accept payment instructions to a Building Society. Nucleus reserves the right to delay settlement where so obliged by law or regulation. Closing your Nucleus Wrap You may choose to close your Nucleus Wrap or any of the Accounts within your Nucleus Wrap by instructing Nucleus in writing. You should note that depending on the nature of your Nucleus Wrap you may be able to receive some or all of the proceeds or may need to transfer the cash proceeds or re-register the underlying assets to an alternative provider. You should discuss with your Adviser the most appropriate action in the context of the Nucleus Wrap and in keeping with the prevailing legislative and tax environment at the time of closure. Your instructions should make it clear whether you wish to sell the Assets in each Account or re-register them to an alternative provider (where applicable). Where you choose to sell you must also instruct whether you wish the proceeds paid direct to you or paid as a transfer to an alternative provider. Once an Account has been closed, any resultant transaction proceeds, interest, dividends or other income will be paid to the same party as advised in your closure instructions after deduction of any outstanding charges due to Nucleus. Nucleus reserves the right not to return payments, such as distributions received into a client account after this has been closed, of below 5 in total and will forward any such amounts to a charity selected by us. Your Account(s) cease to be exempt from tax on your death and will terminate with immediate effect. When written notification of the death is received, we will sell the non-cash Assets in each Account and hold the proceeds on deposit. All pending transactions will cease (including withdrawals) though trades in progress will be completed and the Charges will continue to be deducted. Upon receipt of the death certificate, the grant of probate or appropriate legal confirmation, we will transfer the cash balance of the Account on the instruction of your personal representatives. On the death of the relevant life assured of a Nucleus Onshore or Offshore Bond account, the current value of the account will be multiplied by per cent for an Onshore Bond and 101 per cent in the case of an Offshore Bond and paid as a lump sum to the live(s) assured. You should note that the relevant life assured will be specified in the application (or subsequent change to life (lives) assured documentation) as the first or the last death of those individuals named. These Terms and Conditions are binding on your personal representatives. In the case of the Nucleus Pension Account or Nucleus Protected Rights Pension Account the Scheme Administrator will have absolute discretion as to the beneficiaries and the proportions paid to any beneficiaries of 12

13 any lump sum death benefits, although the Scheme Administrator will pay due consideration to your expression of wishes, which you may change at any time. Charges The Nucleus Wrap will be subject to three distinct types of charges, those associated with the provision of the Services (Nucleus Charges), the provision of financial advice (Advice Charges) and the management of assets (Asset Charges) all of which are more particularly described below together (the Charges ). You should note Nucleus reserves the right to increase the Charges associated with the provision of the Services at any time on 30 days written notice and that depending on the nature of your Portfolio there may be more than one tier of Advice or Asset Charges. While a core principle of the Services is transparency you should always ensure that you know how much you are paying and how the Charges might impact on the value of your Portfolio. It is market practise for fund managers to impose charges for buying and selling units/shares in their funds and to impose their own annual management charges. Wherever possible Nucleus will attempt to secure discounted initial and annual charges from fund managers. Full details of the charges which apply to Assets available on the Nucleus platform are available on the Website. There are also other expenses which fund managers may deduct from their funds such as registrars fees, trustee/depositary charges, audit charges and stamp duty reserve tax. If you require further details you should obtain these from your Adviser or the relevant fund manager. Nucleus may deduct any stamp duty, stockbroker charges, bank charges, audit fees, VAT or other outgoings that arise in the management of the Nucleus Wrap and which are not specifically excluded from this Agreement. All charges are shown exclusive of VAT and to the extent that it is payable, Nucleus will additionally charge this tax to you at the prevailing rate. As noted elsewhere in these terms and conditions, in certain circumstances additional ad hoc charges may apply. Nucleus will inform you of any such charges before acting on any instruction which will incur such charges. Nucleus will not carry out such instruction unless and until you have consented to such charges. Although all Charges will be presented in a transparent and open manner you should contact your Adviser or Nucleus if you think any of the Charges you have paid are unclear or incorrect. Some asset managers reserve the right to directly remunerate Advisers who place business with them out of the investment management fees they receive. Nucleus has no responsibility, involvement or liability in relation to any such arrangements. This is independent of any Nucleus charges. You should also note that fund managers may impose a dilution levy to share out the costs incurred when a need to deal in underlying assets is triggered by investor purchases or redemptions of fund units/shares. This is to prevent these costs diluting the value of units/shares held by continuing investors. Any Charges arising from a dilution levy will be either reflected in the offer price of the units or applied as a levy to the amount invested or disinvested. Nucleus reserves the right to defer the application of any of the Charges or rebates described below at its reasonable discretion. In cases where pricing information is unavailable Nucleus reserves the right to estimate the price on which the charges and rebates detailed below are based. 13

14 The Charges associated with the Nucleus Wrap are as follows: Charge Level How the charges are applied Nucleus initial charge Nil Not applicable. Initial account charge 100 Applied when each account opened. Nucleus annual charge 0.50% on first 1m less a 0.05% discount on the balance. Accrued daily and debited from cash each month. Any discount will be calculated quarterly and credited to your Accounts on a pro-rata basis. Nucleus ad-hoc charge Upon receipt of ad-hoc information You will be informed of the charge prior to it being or other requests incurred and the charge will be debited from cash accordingly. Advice initial charge By negotiation between you and Debited from cash accordingly. your Adviser Advice annual charge By negotiation between you and Accrued daily and debited from cash each month. your Adviser Advice ad-hoc charge By negotiation between you and your Adviser Debited from cash following receipt of a signed instruction from you. Asset dealing charge Depends on asset For funds there is typically no charge but any direct costs associated with buying and selling assets will be debited from cash, added to the investment amount or deducted from sale proceeds according to the instructions from you and/or your Adviser. Asset initial charge Depends on asset For funds: some funds may have a bid/offer spread or an initial charge you should ask your Adviser for more specific details. For other assets: most equities and many other securities will have charges associated with executing transactions (including the stockbroker charges noted below). Asset annual charge Depends on asset For funds: this is typically reflected in the unit price and details are available on request. Where Nucleus terms are better than a fund s standard charge, any rebate in the pricing will be accrued daily and normally credited to cash each quarter. 14

15 Stockbroker charges Charged at point of trade Dealing: 0.15%, subject to a minimum of 15 with no maximum Foreign dealing: 50 (if stock is not CREST eligible or third party charges are incurred) Stamp duty purchases: UK: 0.5%, Ireland 0.10% Transfer out charges: 15 + VAT per line of stock per account These charges will be allocated in propoportion to the value of the trades aggregated where a trade is aggregated. Additional Offshore Bond The Nucleus Offshore Bond account is subject to an initial wrap charge of 100 and an charges additional annual wrap charge of 0.15 per cent per annum. For Discounted Gift Plans an additional underwriting charge of 100 will apply to which the cost of any doctors fees incurred will be added. Additional Onshore Bond The Nucleus Onshore Bond account is subject to an additional annual wrap charge of charges 0.10 per cent per annum. Reporting Aside from the welcome letter you receive when the Nucleus Wrap has been opened Nucleus will maintain records of all transactions (for at least six years) and will send you written statements twice each year with a summary of your Portfolio and details of all the transactions that have occurred since your last statement. Nucleus will not send you confirmation of all transactions or other activity within your Account(s), although Nucleus will keep copies of all such documentation on file. You and your Adviser may inspect such records via the Website or ask for them to be sent to you at any time. Nucleus will not send you copies of reports and accounts, scheme particulars or details of corporate actions unless you have specifically requested to receive these in writing. Nucleus reserves the right to make a charge for any such requests in which case the level of the charge would reflect the costs incurred in meeting your requirements. You and your Adviser Nucleus will only deal with you if you have a relationship with an authorised and regulated IFA firm and as such you should be aware if you choose to change your Adviser to someone working for a firm that does not have a relationship with Nucleus, you will not be able to continue to use the Nucleus Wrap. You shall notify Nucleus in writing if you choose to terminate an Adviser relationship. You should further note that where you terminate an Adviser relationship and do not appoint a new Adviser Nucleus reserves the right to levy charges that may exceed those that were being levied by your Adviser prior to your agreement with the Adviser being terminated. Nucleus will in such circumstances remove any commission or other fees that would normally be paid to an Adviser in such circumstances. You agree that your Adviser is duly authorised to provide Nucleus with instructions on your behalf. You will only permit your Adviser to provide instructions without your express authorisation where an appropriate discretionary investment management agreement is in place. Nucleus will not be responsible for any losses you suffer arising from Nucleus acting on instructions received from your Adviser which have been made without your explicit authority or an appropriate discretionary investment management agreement. 15

16 Limitation of liability Nucleus will not apply any discretion when dealing on your behalf nor accept liability for any losses, direct or consequential, which you may realise as a result of the investment decisions made by you in conjunction with your Adviser. Nucleus will not be liable to you, nor will we compensate you, for any loss, claim or damages arising as a result of us doing (or not doing) anything in reliance upon an instruction given (or which can reasonably be interpreted as having been given) by you or your Adviser. Nucleus will not be responsible or liable for any losses, or loss of opportunity unless such loss is the direct consequence of the wilful default or negligence of Nucleus including the wilful or negligent failure of Nucleus to carry out a clear instruction. Nucleus will not be liable nor have any responsibility for any loss or damage you incur or suffer as a result of the acts or omissions of any Third Party. Nucleus reserves the right to limit the availability of the Website and the Services for maintenance and other operational reasons. Nucleus will use its reasonable endeavours to ensure that maintenance is carried out outside of normal business hours but for emergency maintenance this may not be possible. Nucleus will use its reasonable endeavours to provide advance notice on the Website of any planned maintenance. Nucleus will not be liable or have any responsibility for any loss or damage you incur or suffer as a result of any event or circumstance not reasonably within our control including: Failure, interruption or delay in the performance of our obligations resulting from the breakdown, failure or malfunction of any telecommunications or computer services; Industrial disputes; Acts of governmental or other similar authorities; Terrorist acts. Nucleus depends on a number of third parties when reporting on and valuing the Nucleus Wrap and while Nucleus will use reasonable endeavours to ensure that such third parties are reliable sources of information, Nucleus will not accept any liability where this information is incorrect, deficient or incomplete. You agree that you will notify Nucleus as soon as possible after becoming aware of any error or omission by Nucleus in the provision of the Services. Nucleus shall have no liability for losses arising after the date 14 Business Days after receipt by you of confirmation of any transaction. Nucleus does not exclude its liability for death or personal injury caused by Nucleus negligence or the negligence of its employees or agents, or for fraud. Security Where you are issued with a username and password you should keep your username and password secret and not disclose them to any other person. You should take all reasonable steps to prevent disclosure of this 16

17 information and Nucleus cannot be responsible for any losses you incur as a result of not doing so. You must tell Nucleus as soon as possible if you believe that someone else is aware of your security details. Conflict of interest In the unlikely event that a material conflict of interest arises such that Nucleus is unable to manage your Assets to Nucleus satisfaction, Nucleus will disclose this interest to you and ensure your fair treatment. Conflicts of interest are managed in accordance with the Conflicts Policy. Your right to change your mind You can change your mind about opening a Nucleus Wrap, opening an individual Account or making an additional investment provided you inform Nucleus by returning the associated Notice of the Right to Cancel within 30 days. You should note that if you cancel you may get back less than you invested. You should also note that if you cancel a transfer of benefits into the Nucleus Pension Account or the APP Account the trustee/administrator of the ceding scheme is not obliged to take the proceeds back although you may be able to transfer your benefits to an alternative scheme. Complaints If you want to complain about any aspect of the Nucleus Wrap please contact Nucleus by writing to Janet Akbas, compliance manager, Nucleus HQ, 39 Thistle Street Lane SW, Edinburgh EH2 1EW or by calling , where your complaint will be taken seriously and will be handled in accordance with Nucleus internal procedures and the FSA rules governing complaints. Upon receipt of your complaint you will receive a letter acknowledging your complaint together with a note of Nucleus complaints procedure. If your complaint is not dealt with to your satisfaction you should contact the Financial Ombudsman Services, an independent dispute resolution scheme, by writing to South Quay Plaza, 183 Marsh Wall, London E14 9SR or by telephoning Any such action will in no way affect your right to take legal action. If you make a valid claim against Nucleus and Nucleus is unable to meet its liabilities in full you may be entitled to redress from the Financial Services Compensation Scheme for which Nucleus is able to send you on request. General conditions Nucleus may from time to time elect to delegate some of the activities and functions required to deliver the Services to a Third Party. Where such a delegation occurs, Nucleus shall exercise reasonable skill and care in relation to the appointment and monitoring of such Third Party. Where the role of the Third Party includes a regulated activity or the provision of an Account within the Services, Nucleus shall inform your Adviser of any changes to the party providing that activity or Account no less than 30 days before the change is to take effect. Where Nucleus deems it likely that such a change may result in you incurring a tax charge or other potential loss you will receive written notification no less than 90 days before the change is due to take effect. No failure or delay by either of us in exercising any right, power or privilege under these terms will operate as a waiver of that right, power or privilege and no single or partial exercise of any such will preclude any further exercise of that or any other right, power or privilege. 17

18 Aside from instances where there are changes to the Regulations relevant to the Services which require less than 30 days notice, Nucleus will provide no less than 30 days notice of changes to this Agreement. In cases where Nucleus deems it appropriate to make immediate changes to this Agreement to reflect changes to the Regulations relevant to this Agreement, Nucleus reserves the right to make such changes without prior notice. Notices regarding your Nucleus Wrap and this Agreement, including any changes to these terms and conditions will be sent to you either by post to your postal address or by to your address both as stated on your Application Form or as subsequently notified to Nucleus. Notices sent by post will be deemed to have been received within three Business Days of the date of posting or in the case of notices sent by fax or when a receipt has been received by Nucleus. Notices sent from you to Nucleus must be either by or letter using the contact details available on the Website and will be deemed valid once they have been received by Nucleus. Nucleus relies on the information in the Declaration and the Application Form from time to time in considering whether or not to open the Nucleus Wrap and the Accounts. If at any time Nucleus discovers that any of this information is incorrect or misleading in any material way Nucleus reserves the right to terminate the Account(s). You should note that telephone calls may be recorded for training and monitoring purposes. Where Nucleus receives an instruction that is incomplete or unclear Nucleus reserves the right to take no action while Nucleus contacts you and/or your Adviser to clarify the position. Nucleus shall not be liable if Nucleus cannot perform its obligations by reason of any cause beyond its control, including but not limited to any act of God, fire, act of Government or supranational bodies or authorities or state, war, civil commotion, insurrection, act of terrorism or threat thereof, embargo, industrial dispute, inability to communicate with market makers for whatever reason, unanticipated dealing volumes, failure of any telecommunications, computer dealing or settlement system, prevention from or hindrance in obtaining any energy or other supplies, labour disputes of whatever nature, late or mistaken delivery or payment by any bank or counterparty or any other reason beyond our control. If an event of this kind occurs, we will take such steps as are reasonable and practicable in the circumstances with a view to minimising the effect of the event on you. These terms and conditions are governed by the laws of England and Wales. Any dispute arising from, or related to, such terms and conditions and/or the Services shall be subject to the exclusive jurisdiction of the courts of England and Wales. Data protection Nucleus shall be entitled to use and disclose your personal data for the provision of the Services and to carry out Nucleus obligations under any contract entered into either by you or on your behalf. Nucleus may disclose your personal information where required by law or regulation. 18