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Santander Corporate & Investment Banking (SCIB) UK is the wholesale business division of Santander UK that: (i) offers general banking services to the largest UK corporations and financial institutions; and (ii) manages the markets activities, and provides treasury products to its own clients and to the other divisions of Santander UK.

SCIB UK benefits from the presence of other SCIB divisions in several geographies where the Santander Group is present (e.g. Latam, US, Europe and Asia) and their local and cross-border product capabilities (e.g. Trade Finance, Cash Management, FX, etc.).

It is organised into eight main business units: Corporate & investment Banking, Financial Institutions Group, Global Transaction Banking, Credit, Fixed Income, FX, Equity and Global Structuring.

Important Information

A list of all the recommendations on any financial instrument during the preceding 12-month period is available upon request free of charge.

This material has been prepared by personnel in the Sales and/or Trading teams of Banco Santander, S.A. or its affiliates, including Santander UK plc (“Santander”) and is not a product of Santander’s Research unit. It is an investment recommendation and has been prepared pursuant to Santander policies, procedures and internal rules of conduct for managing conflicts of interest including information barriers and, where appropriate, establishing specific restrictions on sales and trading activity. Information concerning the management of conflicts of interest are available on request.

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Explanation of Recommendation System

Rating Instrument type Definition
Buy General Upside of more than 15%
Bond Buy the bond for an expected average return of at least 10bp in 3 months (decline in the yield rate), assuming a directional risk.
Swap Enter a swap receiving the fixed rate for an expected average return of at least 10bp in 3 months (decline in the swap rate), assuming a directional risk
FX Appreciation of a given currency with an expected return of at least 5% in 3 months
Relative value Enter a long position in a given instrument vs a short position in another instrument (with a longer maturity for steepeners) for an expected average return of at least 5bp in 3 months (increase in the spread between both rates)
Hold General Upside of 10-15%
Sell General Upside of less than 10%
Bond Sell the bond for an expected average return of at least 10bp in 3 months (increase in the yield rate), assuming a directional risk.
Swap Enter a swap paying the fixed rate for an expected average return of at least 10bp in 3 months (increase in the swap rate), assuming a directional risk.
FX Depreciation of a given currency with an expected return of at least 5% in 3 months.
Relative
value
Enter a long position in a given instrument vs a short position in another instrument (with a shorter maturity for flatteners) for an expected average return of at least 5bp in 3 months (decline in the spread between both rates).

 

Unless otherwise specifically stated, the views or opinions expressed in this report accurately reflect the views of the undersigned author(s) of this investment recommendation and/or the specific Sales and/or Trading team from which it originates and may differ from the views or opinions expressed by other areas of Santander, including the Research Department. Where the original communication which formed the basis of this recommendation has been altered it will be indicated as such. In addition, the undersigned author(s) and/or disseminator(s) may have received or will receive compensation based upon, among other factors, the overall profitability of the Santander group, including profits derived from investment banking activities. The basis of methodology and valuation (where used) can be made available upon request.

This investment recommendation is intended for dissemination to market professionals (eligible counterparties and professional clients), but not retail clients. This information is provided on a confidential basis and may not be reproduced, redistributed or transmitted, in whole or in part, without Santander’s consent. Any unauthorised use is strictly prohibited.

This material contains an independent explanation of the matters contained within and must not be relied upon as investment advice.  It does not take into account whether an investment, course of action, or associated risks are suitable for the recipient.  This material is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Recipients should seek independent professional financial advice regarding the legal, financial, tax and regulatory consequences of any transaction as well as the suitability and/or appropriateness of making an investment or implementing any investment strategies discussed in this document and should understand that statements regarding future prospects may not be realised. Investors should note that income, if any, from investments, may fluctuate and that the value of such investments may rise or fall. Accordingly, investors may receive back less than they originally invested. To the fullest extent permitted by law, Santander does not accept any liability whatsoever (including in negligence) for any direct or consequential loss arising from any use of or reliance on this material. Please note the publication date of this material. It may contain specific information that is no longer current and should not be used to make an investment decision. Unless otherwise indicated, there is no intention to update this material.

Any opinions expressed are based on information available from public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate, complete or up to date and it should not be relied upon as such. Furthermore, this investment recommendation does not constitute an offer or solicitation to buy or sell any securities or other investment.

In relation to the identification of conflicts as required under the MAR investment recommendation requirements, the natural person(s) involved in the production of the recommendation will specifically identify and disclose all conflicts that are known or reasonably expected to be known to relate to them. Santander Sales and Trading personnel may hold securities in the entities discussed in this investment recommendation. Pursuant to Santander’s Compliance Policies, all relevant personal account transactions require the prior written approval of Santander’s Compliance team. 

Santander may have a net long or short financial interest in excess of 0.5% of the total issued share capital of the entities mentioned in this investment recommendation. Information relating to this is available upon request.

The entities mentioned in this investment recommendation may have a net long interest in excess of 5% of the total issued share capital of Santander.  Information relating to this is available upon request.

Santander is not party to any agreement relating to the production of this investment recommendation with any entities mentioned in this investment recommendation.

Santander is a market maker for the financial instruments listed here http://www.londonstockexchange.com/products-and-services/trading-services/registered-market-makers-by-security.xls. Santander may act as a liquidity provider, act as principal or agent, buy, sell, lend or borrow securities of the entities mentioned in this report or derivatives thereon. Santander may have a financial interest in the entities mentioned in this report, including a long or short position in their securities and/or options, futures or other derivative instruments based thereon, or vice versa. Information relating to this is available upon request.

Santander may, in the last twelve months, have been lead or co-lead manager, have solicited or performed investment banking and/or underwriting activities and/or other services (including acting as adviser, manager, or lender) for any entity referred to in this report and all other activities as set out in Section A and B of Annex I or Directive 2014/65/EU of the European Parliament and of the Council which may have given rise to a payment or promise of a payment in relation to these services. Information relating to this is available upon request.

Santander Corporate & Investment Banking is a brand name used by Santander UK plc. Registered Office: 2 Triton Square, Regent's Place, London, NW1 3AN, United Kingdom under the registered number 2294747. Registered in England and Wales. Santander UK plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number 106054). You can check this on the Financial Services Register by visiting the FCA's website www.fca.org.uk/register or by contacting the FCA on 0800 111 6768. Santander, Santander Flame and the flame logo are registered trademarks.

The purpose of this FX Disclosure Notice is to clarify the nature of the trading relationship between each of Santander UK plc and Santander, S.A. London Branch, trading as Santander Santander Corporate & Investment Banking (each "Santander" or "we") and their respective clients, and to disclose relevant practices of Santander when acting as a dealer, on a principal basis, in the FX markets.

To the extent that clients enter into FX transactions with Santander, it will be on the basis of the terms provided in this Disclosure Notice, unless expressly otherwise pre-agreed between Santander and its client or otherwise provided in other applicable terms of dealing and internal policies.

This FX Disclosure Notice is not intended to conflict with or override any relevant law, regulatory rule or other applicable requirement in any jurisdiction in which Santander operates, the terms of which may vary depending on the precise nature of the client's relationship with us and the jurisdiction(s) in which we operate.

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Market Making

Santander engages in transactions as a principal only, unless otherwise explicitly pre-agreed in writing. We do not act as broker, agent or intermediary, financial advisor or in any similar capacity on your behalf. At any point in time we may receive requests for quotations and multiple orders for the same or related currency pairs or instruments. Santander and its affiliates (collectively the "Santander Group") manage a portfolio of positions for multiple clients' competing interests as well as Santander's own risk management needs. In addition, the Santander Group may receive requests for quotations and multiple orders for the same or related currency pairs.

In our role as principal we may seek to satisfy the requests of all of our clients and our independent risk management objectives, but we retain discretion with respect to how to satisfy our clients, including with respect to order execution, aggregation, priority and pricing. We are not required to disclose to a client when the client attempts to leave an order that we are handling other clients' orders or our own orders ahead of, or at the same time as, or on an aggregated basis with, the client's order.

Santander, acting as principal, may trade prior to or alongside a client's transaction, execute transactions for itself or facilitate executions with other clients, manage its risk or source liquidity. These activities can have an impact on the prices we offer a client on a transaction and the availability of liquidity at levels necessary to execute client orders.

Pricing


Unless otherwise disclosed, Santander will generally attempt to provide you with a single "all-in" price which will include any bid/offer spread. For foreign exchange transactions additional amounts may apply, including (without limitation): (a) the costs related to execution including execution venue fees, clearing and settlement fees and other fees paid to third parties involved in the execution of the transaction; and (b) any sales commission or mark-up ("sales margin") determined taking into consideration a variety of factors including, but not limited to credit and capital charges, processing and service & relationship costs.

The price, costs and sales margin will vary depending on the client and the transaction. The inclusion of costs and/or sales margin will apply to requests for quotes and orders unless otherwise specified.

Market volatility may result in significant price movements from the time of receipt of your order to the time of order execution. Santander will ordinarily attempt to reflect such price movements, whether positive or negative, in the price provided to you.

Execution of orders


Where Santander is willing to undertake working an 'order' from a client, we are indicating a willingness to attempt to enter into a transaction under the conditions requested by the client. In general, any order will be managed according to the following guidelines and your order with us, if accepted, will be accepted on this basis. Specific execution requirements should be agreed with your Santander contact in writing or on another recorded medium prior to the placing and execution of the resultant order. Where no specific execution instruction has been agreed, and within the realms of its obligation to execute client orders fairly, Santander will decide, in its discretion, whether to work an order, which orders to execute, when to execute them and how to execute them. There can be no assurance that we will be able to fill your order at the exact level stated in your order, unless otherwise pre-agreed by both parties in writing, or on another recorded medium. However, we will use our professional judgment to execute the order with the aim of achieving the best possible outcome. We will undertake working your order within this operating framework. By leaving your order with us, you expressly agree to the framework outlined in this FX Disclosure Notice.

  • 'At Best' Orders. At best orders will be executed at the best available price at which we are willing to enter into the transaction with you. An at best order will be executed having regard to various factors, such as liquidity and market depth, and market forces at the time of placing the order. We will execute your order using our discretion and expertise to achieve the best price we are able to offer you.

  • Market Orders. A market order will be executed at the first available price in the market. Market orders will be executed as quickly as possible with timeliness being the overriding factor.

  • 'Limit' Orders (Take Profit). A limit order means setting a target price that will ordinarily be at a more favourable price than the current market price. The order may not be executed immediately. In leaving a limit order the client must be aware that it is giving up the certainty of immediate execution in exchange for the possibility of getting an improved price in the future. If the target price is reached, the limit order will be filled when we are prepared to enter into a transaction with you at the target price required by you.

  • 'Stop' Orders. A stop order means setting a target price at which the order becomes live at a less favourable price than the current market price. It may not be executed immediately. A stop order is therefore a 'sleeping' order until the stop price is reached. When the price indicated as a trigger for the stop has been reached, we will attempt to enter into a trade with you at, or as close as is practically possible, to the target price. We will not guarantee your order is executed at the target price but we will endeavour to execute your transaction at the nearest possible level given prevailing market conditions.

  • 'Time Dependent' Orders. Where you require that your order be executed over a specified period of time, we will endeavour to provide you with execution that reflects the price movements over the time period that you have specified. This will be on a reasonable endeavours basis and will not be linked to any benchmarks or VWAP (Volume Weighted Average Price) calculations.

  • 'Fix' Orders. When you place an order for execution at the 'fix' (i.e. for execution at a specific time and date) if the order is accepted we will execute your transaction at the published 'fix rate' after applying a bid offer spread around that price.

  • At Risk Orders. An at risk order is where we are asked to provide a two-way price in an instrument in a given size. Once we make such a price, we will consider it to be executable immediately, and in any event subject to change according to market conditions. In fast moving markets, which may change in a matter of less than a second, if you do not deal immediately we will require you to request a requote prior to trading.








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  • Partial fills - Santander will use its access to liquidity channels via the Santander Group to attempt to execute the full size of your transaction, subject to the prevailing market conditions and your instructions. Santander will assume that partial fills are acceptable to you unless otherwise agreed. A partial fill occurs where Santander is unable to satisfy the whole of your transaction and hence only provides you with a partial execution of your requested transaction. Depending on market conditions, the nature and size of the order, the need for timely execution, your order may be made up of a number of smaller transactions at various prices. Where part of your order (a 'partial fill') has been executed you will be notified of this in a timely fashion, unless you have instructed us otherwise. In any event our internal systems and controls will maintain an audit trail of all partial fills.

Mark-up - Santander may (in its own discretion) apply mark-up to your order in accordance with our mark-up policy. This mark-up may change from time to time according to our internal principles and processes.

OTHER CONSIDERATIONS

Your final all-in price - As the result of the addition of execution costs and / or sales margin by Santander, the price at which we enter into a transaction with you may differ from the price Santander obtains in the wholesale market. When entering into a transaction as principal, Santander always attempts to achieve an appropriate return, taking into account Santander's position, including its inventory strategy and overall risk management strategies in Santander's discretion.

Pre-hedging - When acting in a principal capacity, pre-hedging is the management of the risk associated with the anticipated execution of one or more client orders, designed to benefit the client in connection with such orders and any resulting transactions. The Santander Group may pre-hedge for such purposes to ensure that a client's order is executed in the most orderly fashion possible and in a manner that is not meant to disadvantage the client or disrupt the market, while mitigating the risk the Santander Group may assume as a result of Santander entering into the transaction.

Under such circumstances, the Santander Group may execute transactions in the market for its own hedging purposes at levels or times preceding, coinciding or following those indicated in the client order. For example, when solicited for entry into, and prior to the execution of, a transaction, the Santander Group may enter into risk management transactions at different times and prices to be able to execute the order. Also, from time to time Santander may enter into an agreement with a client to execute a transaction at a rate calculated by a third-party, based on trading during a specified time of day (commonly referred to as the "Fixing Window"). Risk management related to such transactions may lead the Santander Group to execute hedging transactions before, during or after the Fixing Window. Although such hedging activities, as well as unrelated transactions and other ordinary course of business activities executed by Santander Group prior to and during the Fixing Window, or at other times, are not undertaken with the intention of impacting the benchmark fixing or related markets, this activity may have such an unintended effect in certain cases. Pre-hedging, where utilised, will be in accordance with the Santander Group's internal guidelines and policies and the principles of conduct established by our regulators.

Information sharing - The Santander Group may use information regarding the terms of individual transactions to tailor the provision of products and services to its clients. The Santander Group may use un-attributable aggregated information regarding executed transactions and other available information regarding market conditions in formulating its overall market views and pricing and may communicate such information internally, to clients or to other third parties. Information provided to a client by Santander, unless already publicly available, should be treated as confidential and should not be disclosed to any third party. Santander manages the resulting risk of requested FX transactions (including but not limited to market, liquidity and credit risks) on an individual, portfolio or other basis. To facilitate this activity, Santander may share details of the client's transaction request to persons acting in a sales or trading capacity within the Santander Group or one of its agents, to ensure (in its professional judgment) an appropriate outcome for clients, whilst protecting the Santander Group's position. Please note that Santander Group has regulatory and other duties to supervise and control its business. Santander Group shares information as necessary to fulfil these responsibilities and respond to general and specific regulatory and other requests with which it is required to comply by law and regulation.

Conflicts of interest - Santander takes all reasonable steps to avoid conflicts of interest. Where conflicts arise between orders from different clients, or between a client order and a position that Santander holds as principal, these will be managed according to our regulatory responsibilities and in line with our Conflicts of Interest policy.

Electronic trading - Santander operates within a consistent framework when executing electronic trade requests in response to its indicative pricing, and reserves the right to accept or reject trades. More specifically, Santander applies a number of pre-trade acceptance checks and controls that may result in a trade rejection, which include but are not limited to credit and settlement risk limits, market risk limits, trade frequency and pricing consistency checks which may, individually or collectively, be referred to as "Last Look".

"Last Look" in particular is a control used on electronic platforms to provide risk mitigation for timing latencies, technology issues, market disruptions and certain trading behaviors. When applied, it will make a comparison between the last refreshed price and the trade request price, and is thus intended to confirm whether the price at which the trade request was made remains consistent with the current price and so is within Santander's price tolerance in order for it to be available to the counterparty. Should Santander, as a result, deem that the market has moved to our disadvantage in excess of the relevant price tolerance, we may reject the trade request on the grounds of "Last Look".

Due to the different checks and controls being performed, as described above, an answer to a deal request may not be immediate. However, we wish to make it explicit that, for the purpose of performing "Last Look", Santander does not apply any pre-determined Holding Period, also sometimes referred to as 'latency buffer', and trade requests are confirmed as soon as all the relevant checks and controls have been performed. The Holding Period is the process whereby the trade request is held for a prescribed time delay before the price check is performed (the 'Holding Window'), in order to allow the liquidity provider to see the latest market data updates before applying the price check. Santander does not apply a Holding Window to any trade requests (Zero Hold Time) in respect of our spot FX business. The last look price and/or validity check will be applied as soon as our systems receive the trade request.

With reference to 'pre-hedging', during the time pre-trade acceptance checks and controls are performed and before the trade request has been accepted, Santander does not engage in any hedging activity with respect to the prospective transaction.

Important Information
Nothing in this FX Disclosure Notice is to be construed as an offer for services or products or as an offer or solicitation for the purchase or sale of any financial product, nor should it be construed as financial, legal, regulatory, tax, accounting or other advice to enter into any transaction. This FX Disclosure Notice has no regard to the specific investment objectives, financial situations or particular needs of any specific client or prospective client. Therefore, clients or prospective clients should make their own independent assessment of this FX Disclosure Notice and obtain independent professional advice before taking any action on the basis of this FX Disclosure Notice.

For further detailed information on any of the principles contained herein, please contact your relationship manager

Information on the performance of Santander Corporate & Investment Banking UK can be found on the main Santander UK website, as part of the financial results announcements.

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The website can be found here.

From here, you will be able to access the latest and archived financial results announcements for Santander UK, including full year, half year and quarterly updates.

Santander Corporate & Investment Banking is a brand name used by Santander UK plc. Registered Office: 2 Triton Square, Regent's Place, London, NW1 3AN, United Kingdom under the registered number 2294747. Registered in England and Wales. 

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Santander UK plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number 106054). You can check this on the Financial Services Register by visiting the FCA's website www.fca.org.uk/register or by contacting the FCA on 0800 111 6768. Santander, Santander Flame and the flame logo are registered trademarks.

This document has been prepared by Santander Corporate & Investment Banking ("SCIB"), for information purposes only and is not binding. No transaction or services related thereto is contemplated without a subsequent formal agreement with SCIB or the Santander Group. The information contained in this document must not be relied upon as investment advice. It does not take into account whether an investment, course of action, or associated risks are suitable for the recipient. This document is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek independent professional financial advice regarding the legal, financial, tax and regulatory consequences of a transaction as well as the suitability and/or appropriateness of making an investment or implementing the investment strategies discussed in this document and should understand that statements regarding future prospects may not be realised. Investors should note that income from such investments, if any, may fluctuate and that the value of such investments may rise or fall. Accordingly, investors may receive back less than they originally invested.

This communication has not been produced, reviewed or approved by the Santander Group's Research Department, and should not be construed as investment research or a research report and is not subject to any prohibition on dealing ahead of the dissemination of research.

Neither the information nor any opinion expressed constitutes a prospectus, offering document, an underwriting commitment or an offer, or an invitation to make an offer, to buy or sell any securities, other investment or any options, futures or derivatives related to securities or investments. No transaction or services related thereto is contemplated without a subsequent formal agreement with Santander UK plc and/or its affiliates ("Santander Group")

The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance does not guarantee or predict future performance. The information contained in this document (other than disclosure information relating to the Santander Group) has been obtained from, or are based on, public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information, assumptions, performance data, modelling or scenario analysis is accurate, complete or up to date and it should not be relied upon as such.

Important: You should carefully consider your investment objectives, level of experience and risk appetite before entering into any transactions. Most importantly, do not invest money you cannot afford to lose.

The views and commentary in this document (together, "views") are short-term views of the desk from which it originates (the "Authors"). The views are not objective or independent of the interests of the Authors or other SCIB Trading and/or Sales desks, who are active participants in the markets, investments or strategies referred to herein. This document has been prepared in accordance with the Santander Group policies for managing conflicts of interest. The Santander Group have internal rules of conduct that contain, among other things, procedures to prevent conflicts. Information concerning the management of conflicts of interest and the internal rules of conduct are available upon request. The Santander Group and associated personnel may (a) act in several capacities (including hedging activity and trading positions) in financial instruments which may adversely affect any investment performance referred herein; (b) provide oral or written market commentary or trading strategies to its clients that reflect opinions that may be contrary to the materials discussed herein; (c) act upon the contents of this publication prior to your having received it; (d) and/or effect transactions which are not consistent with the materials discussed herein.

To the fullest extent permitted by law, no Santander Group company accepts any liability whatsoever (including in negligence) for any direct or consequential loss arising from any use of or reliance on material contained in this document. Please note the publication date of this document. It may contain specific information that is no longer current and should not be used to make an investment decision. Unless otherwise indicated, there is no intention to update this document. This document is confidential and for the use of intended recipients only and may not be reproduced (in whole or in part or in any form or manner) or delivered or transmitted to any other person without the prior written consent of SCIB. No part of this document may be copied, conveyed, distributed or furnished to any person or entity in any country in which its distribution is prohibited by law. Furthermore no part of this document may be copied, conveyed, distributed or furnished to any U.S. person, as defined in the U.S. tax code. Any unauthorised use or disclosure is prohibited.