Material Information

Wells Fargo Bank, N.A. ("WFBNA", "we", "us" or "our") is disclosing certain material information to you regarding swaps ("Material Information") by making such Material Information available to you on or through our website, or websites of others, via one or more documents, URLs or hyperlinks specified herein. By making such Material Information available to you in such manner, you may also receive from us certain disclosures or other written materials, whether in physical or electronic form (each, a "Writing") that incorporate by reference all or a portion of the Material Information to the extent indicated in the Writing. For purposes hereof, references to "you" mean our swap counterparty, and each person or entity comprising our swap counterparty if a swap is to be executed jointly, except for purposes hereof "swap counterparty" excludes any "swap dealer", "major swap participant", "security-based swap dealer", or "major security-based swap participant".

As used herein, "swap" has its meaning as defined in the Section 1a(47) of the Commodity Exchange Act (“CEA”) and regulations thereunder, and also includes unless noted otherwise (i) foreign exchange swaps and foreign exchange forwards exempted from regulation as swaps by the Secretary of the Treasury pursuant to Section 1a(47)(E) of the CEA, and (ii) any amendment of a swap’s material economic terms or any transfer or termination of a swap, in whole or in part (excluding any involuntary termination or other transaction effected unilaterally by a party pursuant to its exercise of rights under the swap or swap trading relationship documentation).

Purpose

Under Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd Frank”), the Commodity Futures Trading Commission (“CFTC”) and the Securities and Exchange Commission are required to adopt regulations governing multiple aspects of swaps and the functioning of the swaps markets. Among these are certain regulations adopted by the CFTC that enumerate certain business conduct standards (“CFTC Business Conduct Standards”) applicable to swap dealers like WFBNA in our dealings with swap counterparties, commencing May 1, 2013. (Business Conduct Standards for Swap Dealers and Major Swap Participants with Counterparties, 77 Fed. Reg. 9734 (Feb. 17, 2012)).

As a swap dealer registered with the CFTC, WFBNA is required pursuant to § 23.431 of the CFTC Business Conduct Standards to disclose to you certain material information in connection with any proposed swap, sufficient for you to evaluate: 

  1. the material risks of the swap, including market, credit, liquidity, foreign currency, legal, operational and other applicable risks, 
  2. the material characteristics of the swap, including the material economic terms, operational terms, and the rights and obligations of the parties during the term of the swap, and 
  3. the material incentives and conflicts of interest that may apply with respect to the swap, including the price and pre-trade mid-market mark of the swap and any compensation or other incentive we may receive from any source other than you in connection with the swap.

Scope of Disclosure

Our disclosure to you of the Material Information in the manner described above is intended to fulfill a significant portion, but not all, of our disclosure obligations under CFTC Regulation § 23.431. For example, the Material Information does not include, among other things, a swap’s price, mid-market mark, trade specific terms or other required information, some of which may be disclosed orally or electronically during the negotiation or execution process. Accordingly, the Material Information is in addition to and not exclusive of any other information or disclosures we may be required or elect to furnish you from time to time, including solicitation and other materials we may provide to you in connection with swaps or a particular swap. We urge you to read and understand all such information and disclosures before you enter into any swaps or a particular swap.

Material Risks, Material Characteristics and Material Incentives and Conflicts of Interest

Information and disclosures about the material risks and material characteristics of swaps, and the material incentives and conflicts of interest that may apply with respect to swaps, may be found in materials prepared by us, certain industry trade associations or other organizations.

For example, the International Swaps and Derivatives Association (“ISDA”) has prepared both general and product-specific disclosure documents concerning swap transactions. These include a General Disclosure Statement for Transactions and accompanying Disclosure Annexes for Interest Rate Derivatives, Foreign Exchange, Commodities Derivatives, Credit Derivatives, Asset-Backed Security Derivatives and Equity Derivatives (each, an “asset class”), which we are furnishing you via the documents shown below.

The General Disclosure Statement for Transactions, together with each Disclosure Annex relevant to a swap that falls in a particular asset class, contain important information and disclosures about the associated material risks, characteristics, incentives and conflicts of interest that we are required to disclose or furnish to you in advance. Therefore, we urge you to review carefully such information and disclosures prior to entering into any swap. If a swap has characteristics of more than one asset class, then you should read the General Disclosure Statement for Transactions together with each relevant Disclosure Annex. Conversely, if a Disclosure Annex covers an asset class or characteristics that are not relevant to your swap, you may decide to disregard such Disclosure Annex. Please note that we are a member of ISDA and participated in the working group that developed these disclosures.

Disclosures and other information for Derivatives Referencing LIBOR and other IBORs 

In addition to the above-referenced ISDA IBOR Alternative Reference Rates Disclosure, we are furnishing you with the following additional disclosures and information about the potential discontinuation of LIBOR and other IBORs, including related issues and actions you may need to consider.

Below are “Plain English” disclosures approved by the CFTC’s Market Risk Advisory Committee (MRAC) for new derivatives referencing LIBOR and other IBORs and a link to the ISDA supplement to the “Plain English” disclosures.

We are furnishing you with our "SOFR Disclosure" at the link below. We urge you to read and understand this disclosure before you enter into any transactions referencing the Secured Overnight Funding Rate "SOFR."

Derivatives counterparties that are also borrowers of funds in certain loans from WFBNA whose loan terms are directly related to derivative transaction(s) entered into with WFBNA should review the information contained in the link below.

Additional information regarding the LIBOR and IBOR transition is available at the Wells Fargo Transition from LIBOR website.

Material Risks

As noted above, information about the material risks of swaps may be found in the ISDA General Disclosure Statement for Transactions and the Disclosure Annexes. In addition, we are furnishing you with our “Information Statement & Disclosure for Material Risks” via the document shown below. We urge you to read and understand our Information Statement & Disclosure for Material Risks before you enter into any swaps.

Material Characteristics

Although the ISDA General Disclosure Statement for Transactions and the Disclosure Annexes may include, among other things, information about the material characteristics of swaps generally, the material characteristics of a particular swap include its material economic terms, its operational terms, and the rights and obligations of the parties during the term of the swap. In connection with our disclosure to you of such material characteristics, we are furnishing you via the documents and hyperlinks shown below with our “Information Statement & Disclosure for Material Characteristics”, together with online copies of WFBNA’s standard confirmation templates and related ISDA Definitions Booklets and other ISDA materials, the purposes of which are discussed in such Information Statement & Disclosure for Material Characteristics. For credit swaps, the hyperlink to Markit’s website will take you to terms we use to confirm these swaps. We urge you to read and understand our Information Statement & Disclosure for Material Characteristics before you enter into any swaps.

Disclosure Regarding Required Provisions in Certain Swaps and Other Qualified Financial Contracts

In addition to the above regarding material characteristics and material risks, we are providing you with our "Disclosure Regarding Required Provisions in Certain Swaps and Other Qualified Financial Contracts" at the link below.  We encourage you to read and understand this disclosure before you enter into any swaps or other Qualified Financial Contracts with us.

Material Incentives and Conflicts of Interest

As noted above, information about the material incentives and conflicts of interest that may apply with respect to swaps may be found in the ISDA General Disclosure Statement for Transactions and the Disclosure Annexes.

Disclosure of material incentives includes disclosing the price of a swap (which is a material characteristic of the swap) and, subject to certain exceptions, the pre-trade “mid-market mark” of the swap within the meaning of §23.431(a)(3)(i) of the CFTC Business Conduct Standards and related provisions. Our disclosure to you of the price and mid-market mark of each swap prior to entering into the swap enables you to discern the spread between any actionable quotes we provide to you (or you provide to us) for the swap and the mid-market mark we disclose to you for the swap. The CFTC believes this provides swap counterparties with pricing information that facilitates negotiations. See CFTC Business Conduct Standards, 77 Fed. Reg. 9734, at 9766.

Please note, however, that our disclosure to you of the pre-trade mid-market mark of a swap may be deemed satisfied if certain CFTC requirements are met for the swap, such as those enumerated in CFTC Letters 12-42 and 12-58 from the CFTC’s Division of Swap Dealer and Intermediary Oversight. These letters cover swaps meeting certain criteria, including those for which real-time tradable bid and offer prices are publicly available in the marketplace, and may be further modified if additional relief is granted.

In connection with any pre-trade mid-market mark we provide you in the relevant asset class indicated, we are furnishing you with the relevant “Information Statement & Disclosure for Pre-Trade Marks” via the documents shown below. Unless an exception applies, we urge you to read and understand our Information Statement & Disclosure for Pre-Trade Marks before you enter into any swaps.

In addition to the foregoing, we are furnishing you with our “Disclosure Statement: Material Incentives & Conflicts of Interest Concerning Trading Facilities and Clearing Houses” via the document shown below. This disclosure discusses material incentives and conflicts of interest relating to your decision whether to enter into swaps with us bilaterally, or instead to execute your swaps on a “swap execution facility” or “designated contract market”, and in either case your decision whether to elect to clear your swaps on a “derivatives clearing organization”.

We are also furnishing you with our “Relative Compensation Disclosure Supplement”, which forms part of our disclosures concerning our material incentives and conflicts of interest and provides important information about our relative compensation in relation to alternative swaps or swap strategies.

Additional Information & Disclosures

From time to time we may furnish you with additional information and disclosures pertaining to swaps, including those listed below. These may be standard information statements and/or standard disclosures, or they may be information and/or disclosures that we individually tailor to you and your circumstances, or to a particular swap or type of swap. You should not assume that information and disclosures we furnish you will in all cases be the same as we furnish our other swap counterparties, and we reserve the right to furnish enhanced disclosures and information to swap counterparties that we believe lack experience in swaps or a type of swap, or for any other reason we deem necessary or appropriate.

Daily Marks

§ 23.431(d)(2) of the CFTC Business Conduct Standards requires WFBNA to provide you with a daily mark for each un-cleared swap unless it was executed before April 17, 2012. These rules contemplate that swap dealers may make daily marks available to their counterparties through password protected web pages. Because this method takes advantage of technological efficiencies and accommodates our customers’ preferences, we will be providing our daily marks to you via this method unless otherwise agreed. In connection with any daily mark in the relevant asset class indicated, we are furnishing you with the relevant Information Statement & Disclosure for Daily Marks via the documents shown below.

For foreign exchange swaps, information regarding your Daily Marks will be provided to you via your Daily Marks statement.

Section 716 Disclosure

Under section 716 of Dodd Frank, “Swaps Entities” such as WFBNA will be prohibited from receiving emergency and certain other forms of federal assistance if they conduct swaps in certain bank ineligible asset classes once this prohibition becomes effective. We are providing you with the following disclosure in case you conduct any swaps with us in these asset classes before this prohibition becomes effective.

Negative Interest Rates (including disclosures regarding benchmark rate floors)

The emergence of negative interest rates in certain economies in response to central bank monetary policies raises issues for counterparties to consider when acquiring swaps, including the material characteristics and risks of swaps as they relate to negative rates and benchmark floors. We urge you to read and understand our Negative Interest Rates Disclosure before you enter into any swaps.

Multiple Products, Structures and Features

In connection with any recommendation, presentation, discussion, comparison, explanation or other communication with you involving alternative swaps or swap strategies, we are furnishing you with the following “Multiple Products, Structures and Features Disclosure”.

Macro Traded Products Disclosures

Foreign Exchange Dealing & Business Practices Disclosure

We are furnishing you with our "Foreign Exchange Dealing & Business Practices Disclosure”, which contains important information that we urge you to read and consider in connection with foreign exchange transactions, whether they are “swaps” as defined above, or fall outside such definition such as spot foreign exchange transactions. This document discusses how we conduct foreign exchange business, including how we trade, make markets in, price, hedge and handle orders for foreign exchange transactions. It also includes important information about how we record telephone calls and handle confidential information. This document is in addition to any other foreign exchange transaction-related information, agreements and disclosures comprising Material Information made available on or through this website such as the Foreign Exchange Disclosure Annex shown above.

Interest Rate and Commodities Trading Practices Disclosure

We are furnishing you with our "Interest Rates and Commodities Trading Practices Disclosure”, which contains important information that we urge you to read and consider in connection with the relevant practices of Wells Fargo when acting as a swap dealer in interest rate swaps and commodity swaps, or as a dealer in physical commodity transactions. This document discusses how we conduct interest rate and commodities transactions, including how we handle orders, principal trading, market making, pre-hedging and risk management practices.  It also includes important information about how we handle confidential information.  This document is in addition to any other interest rate and commodities transaction-related information, agreements, and disclosures comprising Material Information made available on or through this website such as the Commodities Derivatives Disclosure Annex and Interest Rate Derivatives Disclosure Annex shown above.

FX, Rates and Commodities Macro Products Market Making, Information Handling and Hedging Disclosure

Wells Fargo is furnishing you with our “FX, Rates, Commodities Macro Products Market Making, Information Handling and Hedging Disclosure”, which contains important information for you to understand and consider when we act as a dealer and market maker with respect to a wide variety of macro products, including providing relevant details on information handling and pre-hedging for such products.

Updates

From time to time WFBNA may be updating, supplementing or otherwise modifying the Material Information on our website, whether in response to regulatory developments, changes in market practices or otherwise. Material Information owned or controlled by others, including ISDA, may likewise change from time to time on their websites or otherwise. Accordingly, WFBNA reserves the right to update, supplement or modify the Material Information, and therefore you should revisit our website and relevant web pages regularly to ensure that you have the most up to date information and disclosures before entering into each swap.

Conflicting Terms

Nothing herein or contained in any Material Information shall amend or supersede the express terms of any written or oral agreement between you and us, including any swap confirmation or swap trading relationship documentation.

No Offer or Commitment

Furnishing you with the information and disclosures made available on or through this website, or the website of another organization, shall not be construed as an offer or commitment to enter into any swap.

ISDA Copyrights & Disclaimer

Please note that ISDA definitional booklets and other materials from ISDA referred to herein are subject to the ISDA Copyrights and ISDA Disclaimer of Liability, which we are furnishing you via the document shown below.

Questions

If you have any questions regarding the Material Information displayed on or made available to you through our website, please contact your WFBNA marketer on the relevant swap or foreign exchange desk.

This Disclosure of Material Information for Swaps may be revised from time to time without notice.

Version: March 25, 2021

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