Conflict of Interest Policy

PURPOSE

The purpose of this Conflict of Interest Policy (Policy), prepared in accordance with the regulations issued by the Capital Markets Board, is to ensure that our Organization acts fairly and honestly while providing investment services and activities, as well as ancillary services, with due regard for the interests of our clients and the integrity of the market, to establish an organizational structure and take the necessary administrative measures to prevent conflicts of interest that may arise in our Company’s relationships with its clients—between the Company, its major shareholders, employees, executives, and persons directly or indirectly associated with them, and its clients, or between one client and another; and, in cases where a conflict of interest cannot be prevented due to reasonable causes arising from the functioning of the market, to establish procedural guidelines requiring the Company to inform its clients, prior to providing the relevant activity or service, regarding the nature and causes of any conflicts of interest that may arise between the Company and its clients.

BASIS

This Policy was prepared based on the “Communication on the Principles Governing the Establishment and Operations of Investment Firms” (III-39.1), published in the Official Gazette No. 28854 dated December 17, 2013.

SCOPE

This Policy covers conflicts of interest that may arise between Akbank T.A.Ş., its subsidiary Ak Yatırım Menkul Değerler A.Ş., Ak Portföy Yönetimi A.Ş., group companies, partners, employees, executives, and persons directly or indirectly associated with them, and their customers, or between one customer and another.

DEFINITIONS AND ABBREVIATIONS

Board: Refers to the Capital Markets Board (CMB)

Law: Refers to the Capital Markets Law No. 6362,

Institution: Refers to Ak Yatırım Menkul Değerler A.Ş.

Communication: Refers to the Communication No. III-39.1 on the Principles Governing the Establishment and Operations of Investment Institutions,

Investment Services Communication: Refers to the Communication No. III-37.1 on the Principles Regarding Investment Services, Activities, and Ancillary Services,

Investment Services and Activities: Refers to the services and activities listed in Article 4 of the Investment Services Communication,

Ancillary Services: Refers to the services listed in Article 5 of the Investment Services Communication

CONFLICT OF INTEREST MANAGEMENT MODEL

General Principles

• A conflict of interest is generally a situation in which there is a conflict between the professional interests of any person in a position of trust and their personal interests.
• It is essential that our employees avoid any conflicts of interest that may arise during the course of their work and do not allow any interference that could compromise their integrity and impartiality.
• Our employees act fairly and honestly while providing investment services and activities, as well as ancillary services, always keeping in mind the interests of their clients and the integrity of the market.
• In every transaction related to capital markets, our employees are required to exercise due care and diligence.
• The principles set forth in this Policy document regarding conflicts of interest may not be used in a manner that would result in the performance of acts or transactions contrary to the law.
• Our firm has established an organizational structure designed to prevent conflicts of interest that may arise between the firm, its partners, employees, executives, and individuals directly or indirectly associated with them, and its clients, or between one client and another.
• >We provide our employees with the environment and conditions necessary for their professional and personal development.
• In cases where a conflict of interest cannot be prevented due to reasonable causes arising from market operations, our Firm informs clients in writing about the nature and causes of any potential conflicts of interest that may arise between our Firm and our clients prior to providing the relevant activity or service, and obtains the client’s signature confirming receipt of this information.
• In cases where our Firm takes a position as a counterparty to the client and, due to the nature of the service or product provided, the client’s loss results in a profit for our Firm, this information is disclosed to the client via a client risk disclosure form.
• Our Firm may not engage in transactions that, contrary to the rules of objective good faith, could result in favor of one or more clients to the detriment of others.
• No priority is given to any person or entity in the execution of customer orders. The time priority rule is applied in accordance with the relevant Board regulations.
• In offering capital market transactions to customers, our Firm acts in concert with all other financial institutions with which it has a capital partnership to prevent conflicts of interest.
• Furthermore, our Firm:
  • Will not derive financial gain at the client’s expense or avoid financial loss at the client’s expense;
  • Will not derive benefit from services or activities offered to a client when the client has no interest in them;
  • Will not derive benefit from favoring one client or group of clients over another client or group of clients;
  • or derive financial gain from a party other than the client, in addition to standard fees and commissions, due to the services and activities provided to the client.
  and has developed its systems and applications to prevent such situations.
• Within the scope of portfolio brokerage—the activity whereby the Firm executes a client’s buy or sell orders for capital market instruments as the counterparty—it is possible for the client to incur a loss and for the Firm, as the counterparty, to realize a profit due to the nature of the service or product provided.
• o) The authorized firm is obligated to disclose to the client all relationships and conditions that are likely to affect the objectivity of the comments and recommendations provided during investment advisory activities, particularly any significant financial interests related to the capital market instrument to which the comments and recommendations pertain, or any significant conflicts of interest with the issuer. This obligation also applies to all natural or legal persons who participate in the preparation of the advice, whether they are employed by the Firm under a contract creating an employment relationship or without any such contract. It is mandatory to disclose to the client information regarding the shares held by the Firm and the issuer in question, representing 1 percent or more of each other’s paid-in capital or voting rights; any management privileges held by either party; and other significant financial relationships between them, such as credit agreements or lease contracts.

Identification of Potential Conflicts of Interest

In identifying potential conflicts of interest, our organization—taking into account the specific circumstances of each case—considers whether its own members, partners, employees, executives, and individuals directly or indirectly associated with them and take these circumstances into account, at a minimum.:

• Where they will derive financial gain at the customer’s expense or avoid financial loss,
• Where they will derive a benefit from the services and activities provided to the client even though the client has no interest in them,
• Where they will derive a benefit as a result of favoring one client or group of clients over another client or group of clients,
• or where they will obtain financial gain from a person other than the client—beyond standard fees and commissions—due to the services and activities provided to the client. Every employee at every level is required to be aware of and take into account all potential conflicts of interest during the performance of their duties and, within the scope of their responsibilities, to assess any potential conflicts of interest that may arise.

The investment services, activities, and ancillary services provided by our organization that may give rise to conflicts of interest are listed below:

• Trading brokerage,
• Portfolio brokerage,
• Individual portfolio management,
• Brokerage of sales in initial public offerings (IPOs), with or without underwriting,
• Custody and management of capital market instruments on behalf of clients,
• Ancillary services;
  • Granting of loans or credit
  • Provision of foreign exchange services
  • Provision of general investment advice
  • Provision of brokerage services in securing financing
  • Wealth management and financial planning

Potential conflicts of interest that may arise during the provision of investment services, activities, and ancillary services by our Firm are listed below, without limitation:

• Our Firm may trade and/or act as a market maker on its own account and/or on behalf of its clients in the markets and products where other clients conduct transactions,
• Depending on the nature of the service or product provided as part of portfolio brokerage activities, a client’s loss may result in our firm generating a profit.
• Our firm may recommend or sell capital market instruments issued by itself or its affiliated entities to clients,
• With regard to capital market instruments recommended to clients by our Firm, clients may, at their own discretion, execute transactions contrary to such recommendations,
• Our Firm may recommend participation shares in investment funds established and/or managed by its affiliated entities to its clients as part of its investment advisory activities, and may act as a broker in the purchase and sale of such participation shares as part of its trading brokerage activities,
• Our firm may aim to increase trading volume to boost commission revenue and may pay bonuses to its employees based on trading volume,
• Our firm, its partners, employees, executives, and persons directly or indirectly related to them may trade in the capital market instruments regarding which they provide investment advisory services and/or general investment advice,
• Our firm may provide research services regarding the entity or group to which it provides investment advisory services,
• Our firm may simultaneously provide investment advisory and portfolio management services for capital market instruments for which it acts as an underwriter,
• Our firm may provide the same or different investment services and activities, as well as ancillary services, to multiple clients whose interests may conflict or compete with one another at the same time,
• Our firm may derive financial gain, in addition to standard fees and commissions, within the framework of contractual relationships with other financial institutions, stock exchanges, and market operators with which it does business or collaborates in connection with the services provided to clients.

Measures Adopted to Prevent Potential Conflicts of Interest and the Process to Be Followed When Conflicts of Interest Cannot Be Avoided

a) Preventing and Managing the Flow of Information

To prevent or manage the flow of information within the organization or among members of the corporate group, transactions are carried out only by personnel authorized for this purpose.

In addition to general security concepts regarding information security, the “Information Security Regulation” and “Information Security Implementation Guidelines” have been prepared with the aim of ensuring the confidentiality, integrity, and availability of information.

Our organization does not disclose to any party other than those explicitly authorized by law—including information regarding issuers obtained in the course of its public offering brokerage activities—any customer identification information or any other information learned through its operations, nor does it use the information it obtains for its own benefit or that of a third party.

To prevent any potential situations that could conflict with our clients’ interests arising from all other services and activities for which our firm is authorized, as well as ancillary services, client information for which Ak Portföy provides portfolio management services is maintained on a separate system within the Portfolio Custody Branch.

No one other than the staff employed at the Portfolio Custody Branch has access to customer information provided as part of the custody service. In addition, a limited number of authorized personnel are granted access for viewing purposes for auditing, reporting, and data processing purposes.

Authorization to perform transactions related to other custody services is granted within the framework of authorization levels determined based on our employees’ roles and titles.

All necessary physical and system-level measures have been taken to ensure the security of customer information obtained through the custody service against unauthorized access by other service units.

b) Oversight measures

The oversight of units where conflicts of interest may arise, as well as the employees working in these units, is carried out by the managers in each unit of our Organization. Reviews and investigations are conducted by the Presidency of the Inspection Board / Presidency of the Audit Group in accordance with the relevant workflows.

Ethical Principles have been established to prevent any disputes or conflicts of interest that may arise between our employees, our customers, and our Organization. Work principles and customer relations are conducted within this framework.

If our Organization receives commissions, discounts, or similar benefits on its own behalf or on behalf of third parties—such as issuers, stock exchanges, or government agencies—it discloses this fact to the customer prior to providing services.

Any irregularities identified by government agencies authorized to audit capital market transactions or by independent audit firms are prioritized and resolved by the relevant departments.

c) Compensation for employees working in units subject to conflicts of interest

The compensation provided to our employees is consistent with our organization’s ethical values, internal balance, and strategic goals. All employees are compensated without any discrimination, taking into account the responsibilities they undertake.

Successful employees are rewarded.

d) Assigning job locations in a way that does not lead to conflicts of interest

Human resources with the competencies appropriate to the nature of the work required to achieve our goals are secured. We work in coordination with the relevant units when determining individuals’ job assignments.

Based on the principle of considering any factor that could create a conflict of interest, the placement of qualified personnel in the right position at the right time is fundamental.

Procedures to Be Followed in Cases Where a Conflict of Interest Cannot Be Avoided

If the actions required to resolve a conflict of interest exceed the authority specified in the employee’s job description, the matter is immediately referred to a supervisor. If the supervisor fails to take the necessary action, employees must escalate the situation to managers at higher levels.

Managers shall investigate the validity of the conflict in question to ensure that the conflict of interest is resolved and shall take the necessary measures to prevent similar conflicts of interest from recurring.

Where necessary, an investigation shall be conducted by the units responsible for oversight, and the required measures shall be taken. All complaints submitted to our organization are evaluated, and customers are provided with a response within the specified timeframe.

Common complaints are evaluated, and appropriate action is taken.

RECORDING OF CONFLICTS OF INTEREST

Conflicts of interest must be monitored and documented. Identified conflicts, along with the agreed-upon measures for managing them and the steps taken, must be recorded. These records may be used as a reference in managing conflicts of interest that may exist currently and/or arise in the future.

DISCLOSURE OF CONFLICTS OF INTEREST

In cases where a conflict of interest cannot be prevented due to reasonable causes arising from the functioning of the market, clients will be informed verbally or in writing regarding the nature and causes of any conflicts of interest that may arise between our Firm and them before the relevant activity or service is provided.

In certain cases, where a conflict of interest arises depending on the nature of the product or service, clients will be informed before any action is taken, and their consent will be obtained if necessary. The burden of proof regarding the provision of such disclosures rests with our Firm.

RESOLUTION OF CONFLICTS OF INTEREST

While conflicts of interest are not permanent, the conflict is deemed to have ended when the circumstances giving rise to it are resolved.

RESPONSIBILITIES

The duties and responsibilities of our organization’s departments that act as intermediaries in relevant capital market transactions are defined within the framework of the organization’s structure.

Job descriptions and organizational structures are published through our organization’s internal communication channels and updated as necessary.

ENTRY INTO FORCE

The Conflict of Interest Policy, which has entered into force upon approval by the Board of Directors, may be amended with the approval of the Board of Directors.