Portfolio Trading

The placing of purchase and sale orders as well as the negotiation of commissions is performed by Saturna. Although it is permitted to do so, Saturna does not allocate brokerage to any broker in return for research or services.

The primary consideration in effecting securities transactions is to obtain the best price and execution which in the judgment of Saturna is attainable at the time and which would bring the best net overall economic result to a client. Factors taken into account in the selection of brokers include the price of the security, commissions paid on the transaction, the efficiency and cooperation with which the transaction is effected, the expediency of making settlement, and the financial strength and stability of the broker. The adviser may negotiate commissions at a rate in excess of the amount another broker would have charged if it determines in good faith that the overall net economic result is favorable to the client, and is not required to execute trades in "over-the-counter" securities with primary market-makers if similar terms are available elsewhere. The adviser evaluates whether brokerage commissions are reasonable based upon available information about the general level of commissions paid by similar clients for comparable services.

Clients are sent trade confirmations on trade date. Investment Management Account clients receive statements of their accounts after the end of each month from Saturna Capital. Clients also receive statements of their accounts from their custodian, usually at the end of each month. Clients receive quarterly invoices on their accounts, showing the value of their accounts, after the end of each quarter. Clients may review their accounts online at any time.
When consistent with best execution, brokerage is primarily directed to Saturna Brokerage Service, Inc., a wholly-owned subsidiary of the adviser, which engages in a discount brokerage business. Saturna Brokerage Services has agreed to execute transactions for Saturna's managed accounts without any commissions through at least December 2012.

Saturna periodically conducts a "best execution" review of brokerage practices annually, with a trade execution quality report available to all clients requesting a copy and at www.saturna.com/sbs.

A copy of Saturna's Best Execution Policies is available on its website at www.saturna.com/sbs and is available to clients on request.

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