Avanza Bank : Corporate Governance Report 2022

Corporate governance report

Corporate governance report

We want to create a better future for millions of people. The key to success is a high level of trust and the most satisfied customers. It is our firm conviction that it is through customer value that we create the best shareholder value.

Avanza's Corporate governance report has been prepared in accordance with the Swedish Annual Accounts Act and the Swedish Code of Corporate Governance (the Code). Avanza Bank Holding AB (publ), hereafter "Avanza", does not deviate from the Code. As a publicly listed Swedish limited liability com- pany, Avanza's operations are also governed by other laws and regulations, including the Swedish Companies Act, Nasdaq's Nordic Main Market Rulebook for Issuers of Shares and the International Financial Reporting Standards (IFRS). The operating subsidiaries are subject to the supervision of the Swedish FSA, which requires strict application of various financial and ethical rules and guidelines based on Swedish and European law and the Swedish Securities Markets Association's guidelines.

Avanza is driven by a strong customer focus and ambition to provide a world-class user experience and customer service. We believe our offer must stand the test of time. We do not offer investment advice and instead inspire and educate customers to make informed savings and investment decisions. Our promise is that customers will have more money left in their pockets with Avanza than with any other bank or pension company. In the long term, what we do benefits the Swedish savings market and the industry's development, which in turn has a positive effect on society as a whole. From a societal and sustainability perspective we also promote sustainable investments. This is done by facilitating sustainable choices and by educating and chal- lenging. An important part of this work is a sustainable organisation with thorough oversight and control. We work actively to increase gender equality and diversity.

To achieve our vision and promote a better savings market in the long term, we have to maintain a dialogue with and listen to our stakeholders. We have to earn their trust every day and ideally surpass their highest expectations. These stakeholders include customers, employees, owners, partners, media, sup- pliers, authorities and legislators, all of whom affect and are affected by our operations.

A. Ownership and voting rights

The share capital consists of one class of shares. All shares confer the same rights. There are no limitations on the right to transfer shares or how many votes a shareholder may cast. The share is listed on Nasdaq Stockholm's Large Cap list. The share capital at the end of 2022 amounted to SEK 78,309,513.50, represented by 156,619,027 shares and votes. An ownership distribution is presented on page 43. The largest shareholders are represented on the Nomination Committee and in the nomination process for the election of Board members and the auditor; see below.

Composition of the Nomination Committee

Avanza has three outstanding warrant programmes comprising warrants with the right to subscribe for 4,650,000 new shares with a maximum dilution of approximately 2.9 per cent. Of the total number ofoutstanding warrants, approximately53 per cent had been transferred to employees at year-end. An additional incentive plan was established by the AGM 2021 comprising a total of 1,200,000 warrants which cannot be transferred until 2023, as the existing incentive plans expire. For further information on the Avanza share, see pages 42-43 and Note 29 Equity.

B. Nomination process for election of Board members and auditor

The AGM 2020 established the nomination process for the election of Board members and the auditor as well as the appointment of a Nomination Committee. The principles for the nomination process apply until further notice.

The names of the Nomination Committee's members, and the shareholders they represent, were made public on 29 September 2022, more than six months before the date of the AGM 2023. The Nomination Committee consists of one representative from each of the four largest shareholders wishing to appoint a representa- tive, based on ownership interests known immediately before the announcement. The Nomination Committee is the shareholders' governing body with the sole purpose to prepare the AGM's resolutions on election, and directors as well as auditors' fees.

The Nomination Committee is mandated to serve until a new committee is appointed. In accordance with the nomination process, the Chairman of the Committee is the member representing the largest shareholder, unless the Nomination Committee has agreed otherwise. A shareholder who after the announcement is no longer among the four largest shareholders must make their seat available in favour of the shareholder who became one of the four largest. Marginal changes do not have to be considered. Shareholders that have appointed a representative to the Committee have the right to dismiss this representative and appoint a replacement. All changes to the composition of the Committee shall be publically announced.

The Nomination Committee's proposals for resolution leading up to the AGM include:

• Chairman of the Meeting
• Board of Directors and Chairman of the Board
• Board fees
• auditor and fees for the Company's auditors
• if appropriate, changes in the procedure for appointing the Nomination Committee

Name	Representing	Holding 31-08-2022	Holding 31-12-2022
Erik Törnberg (Chairman of the Nomination Committee)	Creades AB	15,695,000 (10.1%)	15,725,000 (10.0%)
Sven Hagströmer (Chairman of the Board of Avanza)	Hagströmer family and companies	15,817,230 (10.2%)	15,817,230 (10.1%)
Dick Bergqvist	AMF Pension & Fonder	15,218,901 (9.8%)	15,385,901 (9.8%)
Magnus Dybeck	Sten Dybeck with family and companies	6,489,208 (4.2%)	6,489,208 (4.1%)

50	Avanza 2022

The Nomination Committee's proposal to the Board of Directors is presented in its entirety to ensure that the composition of the Board meets competence, diversity and independence require- ments. Shareholders with views on the Board's composition or proposals for new members shall submit them to the Nomination Committee well in advance of the AGM. Nomination proposals are reviewed as part of the nomination process. Proposals shall be sent to [e-mail] or to:

Avanza Bank Holding AB

F.A.O.: Valberedningen

Box 1399

111 93 Stockholm

Although Committee members are not remunerated for their work, Avanza refunds reasonable costs deemed necessary for them to undertake their duties. The Committee has agreed that Erik Törnberg, Creades AB, will remain in the position of Chairman of the Committee. Erik Törnberg is also a member of the board of the wholly owned subsidiary Avanza Funds AB. While this does not deviate from point 2.4 of the Code, Avanza is disclosing the situation for the sake of transparency.

The Nomination Committee's proposal, as well as a reasoned opinion on the proposal and a report on the Committee's work, are published in conjunction with the notice of the AGM. When preparing its proposal for Board fees, the Nomination Committee uses comparisons to companies operating in similar spheres and with similar size and complexity. Proposed fees shall be market rate based on the responsibility and work required and on the contribution the Board can make to the Company's development.

As a diversity policy, the Nomination Committee has applied point 4.1 of the Code. The Nomination Committee's aim in applying the diversity policy has been to achieve an appropriate board composition distinguished by diversity and breadth, and to achieve a gender balance among AGM-elected Board members. In 2022, the Board of Directors consisted of five men and four women. For more information, see section F. Board of Directors.

The Nomination Committee held 2 meetings in 2022, at which all members were present. Apart from the meetings, the committe also maintained regular contact. The Nomination Committee also conducted an evaluation of the Board and its work, which included the Board's size, composition, industry experience and competence.

Corporate governance report

C. Annual General Meeting (AGM)

Shareholders exercise influence over Avanza through participation in the AGM, Avanza's most senior decision-making body. In accordance with the Articles of Association, the AGM elects the Company's Board members and appoints Avanza's auditor. Additionally, decisions are taken on adoption of the income statement and balance sheet, consolidated income statement and consolidated balance sheet, dividends and other profit dis- tributions, discharge from liability of the members of the Board and the CEO, the nomination procedure, remuneration guidelines for senior management, and other important issues.

To exercise their vote at the AGM, shareholders usually have to be present at the meeting in person or by proxy. Additionally, they must be registered in their own name in the share register on the specified date prior to the meeting and have notified Avanza of their participation as set out in the notice.

The AGM's resolutions normally pass with a simple majority, i.e. more than half of the total number of votes cast, unless other­ wise specified by the Swedish Companies Act. Shareholders wishing to add a matter to the agenda at the AGM may submit a written request. Such requests must be received by the date indicated on Avanza's website, which for the AGM 2023 was 9 February 2023. Requests are sent to:

Avanza Bank Holding AB

F.A.O: Bolagsjuridik

Box 1399

111 93 Stockholm

The date and time of the next AGM, and information on how shareholders can exercise their right of initiative, are posted on avanza.se/ir under the Governance section at the latest in conjunction with the publication of the third interim report of the year preceding the AGM. Minutes and supporting documentation from previous AGMs are also available in the same section.

ExtraordinaryGeneralMeetingsmaybeheldiftheBoarddeems necessary or if the Company's auditor or a shareholder holding at least ten per cent of the shares requests such a meeting.

At Avanza's AGM on 31 March 2022, 302 shareholders were represented with a holding corresponding to approximately 58 per cent of the total number of shares and votes.

Aside from the annually recurring matters, the following reso­- lutions were adopted by the AGM 2022:

		A. Owners		Appoints
	Appoints
D. External auditors	C. Annual General Meeting

B. Nomination Committee

Nominates Board, Chairman of the Board, auditor

		Appoints		F.1 Remuneration Committee
	Appoints		Appoints
G.3 Internal audit	F. Board of Directors
Examines				F.2 Credit Committee
Audits		E. Avanza Bank Holding AB (publ)		F.3 Risk, Capital and
		Exercises ownership and		Audit Committee
		control over the subsidiaries		F.4 IT Committee

Avanza Bank AB (publ)	Avanza Fonder AB	Försäkringsaktiebolaget	Placera Media Stockholm AB
Avanza Pension

Avanza 2022

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Corporate governance report

• amendment to the Articles of Association whereby the Board of Directors shall consist of no less than five (5) and no more than ten (10) members elected by the AGM
• authorisation for the Board to acquire own shares

D. External auditor

The external auditor is an independent reviewer of Avanza's financial statements and determines whether they in all material respects are accurate and provide a fair presentation of the Company and its financial position and results.

The AGM 2022 reelected KPMG AB as the auditor, with Mårten Asplund as Auditor-in-Charge, until the conclusion of AGM 2023.

The auditor presents the AGM with an audit report on Avanza's annual report and consolidated financial statements, the appropriation of the Company's profit or treatment of its loss, and the administration of the Board and the CEO, and offers an opinion on the corporate governance report. In addition, the auditor submits reports on day-to-day management and internal control, in writing as well as orally to Avanza's Board and/or Audit Committee at least twice a year and delivers an audit report on the annual accounts and annual report.

The audit is conducted in accordance with the International Standards on Auditing (ISA), issued by the International Federation of Accountants (IFAC). The auditor's fees are paid based on approvedinvoices.In2022,feespaidtoKPMGforauditingduties totalled SEK 3,142 thousand. Total remuneration paid is shown in Note 10 Auditors' fees and reimbursement of expenses.

E. Avanza Group

Avanza strives to maintain a clear and transparent organisational structure. Reporting from subsidiaries is done on a monthly basis. The members of Avanza's Board of Directors are also members of the board of the subsidiary Avanza Bank AB. The boards of other subsidiaries consist of both internal and external members.

CEO and Group Management

The CEO is responsible for the day-to-day management of the company in accordance with the Swedish Companies Act and Avanza's CEO instruction, which is adopted by the Board. The CEO is responsible for keeping the Board informed of the Com- pany's operations and ensuring that Board members have all the information they need. The CEO also keeps the Chairman updated on the Group's development.

Avanza's Group Management consisted at year end 2022 of:

• Rikard Josefson, CEO of Avanza Bank Holding AB (publ)/ Avanza Bank AB (publ)
• Anna Casselblad, CFO
• Peter Almqvist, Chief Information Officer (CIO)
• Jesper Bonnivier, CEO of Avanza Fonder
• Camilla Hedenfelt, Chief Human Resources Officer (CHRO)

• Åsa Mindus Söderlund, CEO of Försäkringsaktiebolaget Avanza Pension
• Gunnar Olsson, Chief Operations Officer (COO) and Deputy CEO of Avanza Bank ­Holding AB (publ)/ Avanza Bank AB (publ)
• Teresa Schechter, Chief Legal Officer (CLO)
• Peter Strömberg, Chief Product & Tech Officer(CPTO)
• Sofia Svavar, Chief Communications & IR Officer (CCIO) and Group Head of CSR

More information on Group Management is available on the website, avanza.se/ir, and on pages 60-61.

Group Management holds formal meetings every two weeks and informal meetings as needed. The meetings address Avan- za's results and strategy, priorities and the status of major projects and initiatives, with regular reports from the Group func- tions.

Suitability assessment

Avanza has internal guidelines for suitability assessments of the CEO, other members of Group Management, the heads of control functions and those responsible for the Group's AML work. The assessments are made in conjunction with new appointments and followed up at least once a year as regards the CEO and at least every two years as regards other members of Group Management and the heads of control functions. In the assessment it is determined whether the person in question has adequate knowledge, insight, experience and is suited to the role. Potential conflicts of interest are evaluated as well. Background checks are conducted at least once a year and training plans are set annually.

Remuneration to Group Management

Group Management's remuneration shall reflect each person's experience,competenceandperformance.Remunerationcomprises a fixed salary and the opportunity to purchase warrants in the incentive programme for all employees resolved by the AGM.

Members of Group Management have acquired warrants on prevailing market terms in accordance with the warrant programme. In contrast to other employees, Avanza's Group Management­ receives financing to acquire warrants for an annual one-time payment of 10 per cent of their base salary. The financing is contingent on the amount being invested in Avan- za's incentive programmes and may be subject to repayment if pre-emptive rights are exercised to purchase warrants in accordance with the pre-emptive rights agreement for the warrants.

Avanza's remuneration policy can be found at avanza.se/ir under Governance, as well as the remuneration report approved atthelatestAGM.TheremunerationreportpresentedattheAGM 2023 will be published as soon as it has been approved. Questions concerning the CEO's terms of employment, remuneration and benefits are prepared by the Remuneration Committee and approved by the Board. Remuneration to other members

E. The Avanza Group

Avanza Bank Holding AB (publ)

100%

100%

100%

100%

Avanza Bank AB (publ)	Placera Media Stockholm AB	Försäkringsaktiebolaget	Avanza Fonder AB
Avanza Pension

52	Avanza 2022

Board meetings 2022

Budget and business plan for 2022 Board evaluation Evaluation outsourced activities

Reporting from external audit and control functions

Allocation of shares related to employees' exercise of warrants and allocation of warrants in the employee incentive scheme Reporting from control functions Strategy discussion

Interim report

c

y

Corporate governance report

Annual accounts, year-end report, financing

Reporting from external audit

and control functions

Determination of agenda on the Annual General Meeting, remuneration to those responsible for Control functions as well as training plan for the Board

Determination of renumeration to Group management

Annual General Meeting

Inaugural Board meeting

Evaluation of potential conflicts of interest

Reporting from control functions

Strategy and development matters

of Group Management is determined by the Board, based on the Committee's proposal, following consultation with the CEO. Remuneration guidelines for senior management are adopted by the AGM and presented in Note 9 Employees and personnel costs.

Corporate culture and policies

Avanza's corporate culture is based on a vision to create a better future for millions of people. The key is that what we do will create value for our customers. The corporate culture is characterised by collaboration, humility and an aim to constantly challenge ourselves to think differently. Decision-making channels are short and there is room for different opinions.

Avanza has a Group-wide policy on diversity and equality, which can be found at avanza.se/ir. For Avanza, diversity and equality mean utilising everyone's knowledge, experience and views to enrich, create dynamism and influence every part of the Company. The policy also ensures that all employees are treated fairly and that there is no discrimination. The CEO has overarching responsibility for diversity and gender equality. The work is done systematically with updated documentation, analysis, active measures, evaluations and follow-ups. Equality issues are tracked through employee surveys. Parity between women and men is measured in Group Management and among managers with personnel responsibility. Avanza's management at the end of 2022 was comprised of 5 women and 5 men. Among manag- ers, 47 per cent are women.

Occupational health and safety is a priority. Healthy employees make for a better and more effective organisation and create­ shareholder value. The overarching goal of our health and safety work is to create and maintain an environment where employees have the right opportunities given their position and goals. Avanza has a dedicated committee that deals with the overall structure for systematic occupational health and safety work and equality issues.

Avanza has a high recommendation rate among employees with an eNPS score of 58.

For more information, see pages 36-40.

Regulatory training Avanzahasacodeofconductthatincludesourethicalguidelines. The code applies to all employees and provides guidance on how

we build long-term relationships by describing the responsibility that comes with being an employee. The code contains Avan- za's stance on business ethics and reporting routines as well as how we expect employees to act in ethical dilemmas.

Acting ethically and taking measures to prevent unethical or illegal behaviour is an important part of Avanza's culture. Employees are encouraged to report actions that could be considered unethical or illegal. Incoming reports are handled con- fidentially. Whistleblowers can contact either their immediate superior or the Head of Compliance, or use an external whistle­ blowing tool where the employee can remain anonymous. All reporting through the external tool is encrypted and shall ensure the anonymity of the person who filed the report. Reports can also be submitted to HR, the CEO or the Chairman of the Board. Avanza has whistleblowing guidelines adopted by the Board. A whistleblower who reports legitimate concerns about illegal or unethical behaviour have Avanza's full support and are not at risk of losing their job or facing any form of reprisal as a result of their actions.

All new employees are introduced to current laws, which is followed up on a regular basis to ensure that the employees are kept updated on regulations and any changes. Additionally, individual departments arrange separate, in-depth training in specific areas. All employees undergo regular web-based training in GDPR, security, anti-money laundering and counter-terrorist financing, and anti-corruption.

As a company in the financial market, Avanza has an obligation to help maintain trust in the market. Avanza abides by Sweden's anti-corruption laws and practices and under no circumstances accepts active or passive bribery or other illegal payments. Avanza works continuously to fight corruption and has an anti-bribery policy that complies with Swedish law. The policy and Avanza's Code of Conduct are included in the mandatory compliance training for new employees and can be found at Avanza.se/ir. Supplemental training is provided every three years for all employees. Compliance training includes the work being done in anti-money laundering and terrorist financing, central laws and rules for the regulated operations of Group companies, and other key guidelines and policies. Neither Avanza nor any of Avanza's employees have been convicted of bribery or other crimes related to corruption.

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Corporate governance report

Avanza's internal regulations are easily available to all employees on the internal web. All employees of Avanza have a responsibility to understand and stay updated on the laws and internal rules that affect and are relevant to their work. Avanza is also affiliated with Swedsec, which sets proficiency requirements, issues licenses and requires compliance of those who work as specialists with mortgages and in management or control func- tions. All of these approximately 130 employees were Swedsec certified as of year end. Licenced employees undergo annual knowledge updates on financial services.

F. Board of Directors

The Board of Directors sets forth the business framework, appoints the CEO and exercises control over the Company's management. The Board's duty is to manage the Group's affairs in the best interests of Avanza and its shareholders in order to create the best conditions for a sustainable business. The duties of the Board are governed by the Swedish Companies Act, the Code and the formal plan that the Board has established for its work.

The Board takes decisions on matters concerning Avanza's strategic direction, major investments, acquisitions and divest- ments. Furthermore, each Group company's board establishes policies and guidelines, as well as the terms of reference for the CEO. Where applicable, subsidiaries establish work plans for the control functions Risk Management, Compliance, Internal Audit and the Actuarial function.

The AGM 2022 re-elected all previously elected Board members except Viktor Fritzén, who declined re-election. Addition- ally, Linda Hellström and Sofia Sundström were elected as new members in accordance with the Nomination Committee's pro- posal. Board member Mattias Miksche decided shortly after the AGM 2022 to resign from the Board for personal reasons. According to the Articles of Association, the Board shall consist of no fewer than five and no more than ten members. Avanza's Board consisted in 2022, as of Mattias Miksche's resignation shortly after the AGM, of nine AGM-elected members and no deputies, who elected until the next AGM. The Chairman of the Board is Sven Hagströmer. The Board held its first meeting following election on 31 March 2022.

Diversity and suitability

The guidelines on suitability assessments set forth how Avanza evaluates appointees for their assignments, how conflicts of interest are addressed and how a suitably diverse board is achieved. The Board's composition of individuals of varying age, with a goal of gender parity, and with varying educational and professional backgrounds will help to ensure that the Board

Attendance at recorded Board meetings 2022

collectively has the ability to critically review and understand relevant regulations and can identify the risks caused and faced by the Company. New members are also evaluated in terms of the number of executive and/or non-executive positions they hold, to ensure they have the time needed for the Board's work. These assessments are made in conjunction with new appointments and followed up at least annually. Based on the suitability assessments, annual training plans are then formulated. Background checks were made of all Board members in 2022. Information on the Board's composition, age and background is shown on pages 58-59.

TheboardsofthesubsidiariesAvanzaBankABandFörsäkring- saktiebolaget Avanza Pension follow their own guidelines on suitability assessments adapted to the requirements of a suitable composition and collective competence for the board of each company. Subsidiary boards consist of members with varying experience and education, which contributes to a suitable composition of competences for the operation.

Work of the Board in 2022

During the year, the Board held a total of 16 meetings, including 12 regular meetings, 1 inaugural meeting, 1 extra and 2 by telephone/mail. Board meetings by telephone/mail addressed decisions relating to Avanza's incentive scheme.

At scheduled meetings, the following are discussed:

• financial reporting
• operational reporting
• reporting by the Board's committees
• credit reporting for the subsidiary Avanza Bank

The control functions Risk Management, Internal Audit and Compliance report quarterly.

In addition to the recurring items on the agenda, the Board addressed the matters described in the illustration on the previous page. The Board also focused on the Group's implementation of and alignment with new and amended regulations affecting various parts of its operations.

The Board also worked on and participated in strategic business planning in order to continuously adapt and improve Avan- za's customer offering.

At the end of each calendar year, an evaluation is undertaken to improve the Board's work procedures and competence. The evaluation is conducted by the Board members evaluating their own and the Board's collective competence as well as the Board's work and work procedures. The results are communicated to the Nomination Committee and compiled in a report, which then forms the basis for any changes or training.

			In relation to the	In relation to the
	Attendance	Attendance committee	company and its	company's largest
Member of the Board	Board meetings	meetings	management	shareholders
Sven Hagströmer, Chairman	16/16	RC 6/7, CC 17/17	Independent member	Not independent member
Magnus Dybeck	15/16	IT 9/9	Independent member	Independent member
Catharina Eklöf	16/16	RC 7/7	Independent member	Independent member
Viktor Fritzén**			Independent member
4/16	RKAC 3/10	Independent member
Jonas Hagströmer			Independent member
16/16	RKAC 10/10, IT 9/9	Not independent member
Linda Hellström*	12/16		Independent member	Independent member
Mattias Miksche***	5/16	RC 2/7, IT 3/9	Independent member	Independent member
Johan Roos	16/16	RKAC 10/10, CC 17/17, RC 4/7****	Independent member	Independent member
Sofia Sundström*	12/16		Independent member	Independent member
Hans Toll	16/16	CC 17/17, RKAC 9/10	Independent member	Not independent member
Leemon Wu	16/16		Independent member	Independent member

*Took office at AGM 2022. **Stepped down at AGM 2022. ***Stepped down shortly after AGM 2022. ****Took office in the committee in place of Mattias Miksche

54	Avanza 2022