Allocation Policy

This webpage summarises Standard Chartered Bank’s Allocation Policy as would typically apply to its Capital Markets business.

As a financial institution offering a wide range of products and services to a diverse client base, Standard Chartered Bank (“SCB”) recognises that on occasion, conflicts of interest may arise. The allocations process in the context of a primary offering of debt securities (“securities offering”) is one such example. Accordingly, SCB has designed its Allocation Policy to manage those conflicts effectively and aims to allocate debt securities to its investors in a fair and transparent manner, in accordance with applicable regulations and market conduct.

Regional and product scope

The approach set out on this webpage reflects SCB’s position globally and is applicable to all securities offerings by way of a best efforts book building exercise.

Conflicts management arrangements

SCB has a number of arrangements in place to manage the competing interests of its issuer clients, investor clients and internal desk(s) during a securities offering. These arrangements include the separation of the Capital Markets and Sales and Trading teams involved in the offering by way of physical barriers, information barriers and role distinction. SCB also has procedures in place to control the flow and oversight of information communicated between these different teams.

Allocation principles

In allocating debt securities to investors, SCB would expect to observe one or more the following principles:

• Allocation will be made on a fair and equitable basis
• Issuer clients’ requirements and preferences will take precedence
• Allocation will not be made with reference to or in consideration of any actual or promised, past or future revenue
• Allocation will not be made as compensation or award for participation in any transaction
• Where applicable, allocation of orders from SCB internal desks must not be treated favourably ahead of orders from clients with similar investment characteristics

Allocation decision criteria

SCB’s allocation does not adhere to a fixed quantifiable methodology. It is generally based on judgement and an assessment of the merits of allocating to a particular investor. SCB will take the following factors into consideration:

• The issuer’s allocation objectives
• The issuer’s allocation preferences
• The applicable target market for the debt securities
• Investors’ participation in the marketing and pre-marketing process
• Quality and value of feedback on the issuer and / or industry sector during the current and previous marketing efforts
• Timeliness of orders; earlier indicative orders are typically favoured
• Size of order relative to the size of the issuance / tranche
• Price limits set by potential investors
• The investment profile which the potential investor falls under
• Quality, general investment philosophy and areas of specialisation of the potential investor(s), including their investment strategy, purchasing capacity, expected holding period, and past dealing and / or ownership in other debt securities of the issuer or industry sector

Selecting investors to participate in the pre-marketing and marketing stages

Participation during the pre-marketing and marketing stages of a securities offering are factors, SCB will take into consideration in determining final allocations. Therefore, on occasions when there is overwhelming participation in a roadshow, and when conducting a market sounding or other pre-marketing exercise, SCB will make participant recommendations based on the following considerations:

• The nature and manner of the investor’s participation in similar processes.
• Whether the investor has expressed interest in the issuer
• The investors’ level of engagement in the issuer, the issuer’s industry sector, or in past offerings by the issuer including previous willingness to provide feedback following roadshow meetings
• Eligibility of investors to participate
• The views of the issuer