Order Best Execution Policy

Introduction
In accordance with the rules as set out in the Conduct of Business Sourcebook of the Financial Conduct Authority’s (the “FCA”) handbook, the European Union’s Markets in Financial Instruments Directive II (2014/65/EU) (known as “MiFID II”)and the Market in Financial Regulation (600/2014) (known as “MIFR”) Advanced Markets (UK) Limited (the “Company”) has a duty to conduct all business with its clients in an honest, fair and professional manner and to act in their best interests on any transaction the Company enters into with them. This means that the Company has a duty to provide clients with “best execution”, meaning that the Company must take all sufficient steps to obtain the best possible result for a client when executing an order for them.

Order Best Execution Policy

Introduction
In accordance with the rules as set out in the Conduct of Business Sourcebook of the Financial Conduct Authority’s (the “FCA”) handbook, the European Union’s Markets in Financial Instruments Directive II (2014/65/EU) (known as “MiFID II”)and the Market in Financial Regulation (600/2014) (known as “MIFR”) Advanced Markets (UK) Limited (the “Company”) has a duty to conduct all business with its clients in an honest, fair and professional manner and to act in their best interests on any transaction the Company enters into with them. This means that the Company has a duty to provide clients with “best execution”, meaning that the Company must take all sufficient steps to obtain the best possible result for a client when executing an order for them.

Policy

This Order Best Execution Policy sets out the means by which the Company will meet its best execution obligations when executing orders for clients. This Order Best Execution Policy is not intended and does not impose any fiduciary responsibilities or duties over and above the specific regulatory obligations placed upon the Company or as may be otherwise contracted between the Company and its clients.

The Company will deal with a client as matched principal broker.  This Order Best Execution Policy applies when the Company executes orders from clients to trade in all the financial instruments offered by the Company, which includes, but is not restricted to, futures, options forward contracts, contracts for differences and any other derivative contracts relating to securities, currencies, commodities, interest rates or yields.

Those trades will be immediately matched through a panel of carefully selected liquidity providers. The Company will not trade for any client except pursuant to a detailed, firm, client order to buy or sell, and the Company will not trade for its own account.

Subject to any specific instructions that may be given by a client, the Company will take all sufficient steps to achieve the best possible result for its clients taking into account the Execution Factors listed below. The Company will determine the relative importance of the Execution Factors by using its commercial judgement and experience in light of the market information available to the Company.

Exemption From the Provision of Best Execution

Notwithstanding the intentions expressed above, the Company does not undertake to provide “best execution” if the client falls within any of the following exemptions: Eligible Counterparties, if the client is classified as an Eligible Counterparty, then the client will not be entitled to best execution under the FCA or equivalent EU rules.

Categorisation of Clients

The Company deals with per se and elective Professional Clients and Eligible Counterparties as defined in MiFID and by the FCA. Because the Company always intends to handle orders in an equitable and consistent manner, once a client is classified, for the purposes of a particular instrument, that client may not then elect to be re-classified for the purposes of one transaction of a type it customarily undertakes. However, a client may seek to be re-categorised generally for all purposes, such requests may lead the Company, acting in its sole discretion, to decline to act for the client having regard to the proposed reclassification.

Execution Factors and Criteria

The Execution Factors that will be taken into account are:

  • price;
  • costs;
  • speed of execution;
  • likelihood of execution and settlement (liquidity);
  • size of order;
  • nature of order;
  • type and characteristics of the financial instrument;
  • characteristics of the possible execution venues; and
  • any other consideration relevant to executing the order.

 

While total consideration (price and costs) are generally the main factors for deciding the best possible result for most liquid investments, the overall value to you of a particular transaction may be affected by the other factors listed above.

We will consider all factors when executing your orders and may decide that factors other than price and costs are more important in achieving the best possible result for you. The relative importance of each of the factors will depend on:

 

  • whether you are a per se or elective  professional client
  • any special aims you may have in relation to executing the order;
  • the characteristics of your order;
  • the characteristics of the financial instruments your order relates to; and
  • the characteristics of the venues (if there is more than one) to which your order may be directed.

Execution Venues

The Company is the client’s venue of execution. The Company does not act as a market maker with respect to the client’s transactions. Subject to any specific instructions that may be given by a client (see ‘Specific Client Instructions’ paragraph below), the Company may transmit an order to a third party broker or dealer, for execution at one or more of the following Execution Venues: a Regulated Market, a Multilateral Trading Facility, a Systematic Internaliser, third party investment firms or other liquidity providers, credit institutions or non-EU entities performing similar functions (See ‘Annex 1 – Definitions’ paragraph below). In doing so, the Company must act in a client’s best interests taking into account the Execution Factors and Criteria described above including when there is more than one venue competing to execute an order, the Company’s own commissions and costs for executing that order on each eligible venue should be taken into account to assess and compare possible outcomes. This list of the Execution Venues may not be exhaustive but comprises those Execution Venues on which the Company places significant reliance.

The Company reserves the right to use other Execution Venues where it deems appropriate in accordance with the Company’s Order Best Execution Policy in order to obtain the best overall result for clients and may add or remove any Execution Venues from this list. You can find a list of the venues we currently use at: http://www.advancedmarkets.co.uk/liquidityproviders. We may update this list from time to time.

Where applicable, the Company will take steps so as to avoid structuring or charging its commissions in such a way as to discriminate unfairly between Execution Venues. The Company shall summarise and make public on an annual basis, for each class of financial instruments, the top five execution venues in terms of trading volumes where it executed client orders in the preceding year and information on the quality of execution obtained.

Fees and Costs

When the fees applied by the Company differ depending on the execution venue or entity used, information will be provided to clients to allow them to understand both the advantages and the disadvantages of the Company’s choice of one execution venue or entity over another. Furthermore, where the Company invites the client to choose the execution venue or entity, this information shall be fair, clear, not misleading and sufficient to prevent the client choosing one execution venue or entity rather than another on the sole basis of the price policy applied by the Company.

The Company does not charge different fees or costs depending on the Execution Venues used in order to ensure that costs are transparent and fully disclosed to the client. For all transactions, the Company offers a clear and transparent charging structure; the Company charges a flat fee and it does not apply any additional commission or costs except as set forth below.

All implicit costs are therefore disclosed to the client for complete clarity. Additional costs that you should be aware of and which may be applied are:

Transaction fees;

 

  • Conversion of realized P/L to base currency; and
  • Inactivity fees.

 

The Company does not receive “Payment for Order Flow”, meaning that it does not receive commissions or fees for arranging transactions with market makers, thereby ensuring that there is no conflict created by fees in its execution arrangements.

Trading Outside a Regulated Market or a Multilateral Trading Facility (MTF)

Under the FCA rules where an instrument is admitted to trading on a Regulated Market or MTF, the Company is required to obtain a client’s prior express consent before it arranges for an order in such instruments to be executed at an alternative venue. By trading on the Company’s trading platform, a client hereby expressly consents to the Company’s arranging for that client’s orders to be executed outside a Regulated Market or MTF.

Specific Client Instructions

Where a client gives the Company specific instructions as to the execution of an order the Company will execute the order in accordance with those specific instructions.

Where the client’s instructions relate to only part of the order, the Company will continue to apply its Order Best Execution Policy to those aspects of the order not covered by the client’s specific instructions.

Clients should be aware that providing specific instructions to the Company in relation to the execution of a particular order may prevent the Company from taking the steps set out in its Order Best Execution Policy to obtain the best possible result in respect of the elements covered by those instructions. Nevertheless, the Company will not induce a client to instruct it to execute an order in a particular way, by expressly indicating or implicitly suggesting the content of the instruction to the client, when the Company ought reasonably to know that an instruction to that effect is likely to prevent it from obtaining the best possible result for that client.

Conflicts of Interest

The Company recognises that conflicts may exist between the interests of the Company and its clients. The platform on which orders are transmitted will display the best available price from a number of liquidity providers and clients, thereby reducing the scope for conflicts. On occasion the client’s order may be matched with an order from a party who is also a client of the Company. At no stage will any sensitive information about the Client be released to the other party in those cases and they will only be selected in the event that they are able to offer the best outcome for the Client order. The Company does not direct orders to any specific liquidity provider or price maker and will not therefore actively select another client to match the client’s order with if that client is not able to provide the client with the best outcome.

As the Company does not direct orders, it is also able to demonstrate that other execution venues have not been disadvantaged when clients of the Company also act as price makers.
The Company will always take steps to manage, mitigate and avoid potential and actual conflicts and internal systems are in place to ensure that otherwise comparable client orders are carried out sequentially, and promptly unless the characteristics of the order or prevailing market conditions make this impractical or it is not in the best interests of the client.

Monitoring and Review

The Company will monitor the effectiveness of its order best execution arrangements and this Order Best Execution Policy to identify and, where appropriate, correct any deficiencies on regular basis.
The Company will assess whether the execution venues included in this Order Best Execution Policy provide the best possible result for its clients or whether changes need to be made to the execution arrangements.
The Company will review its order execution arrangements and this Order Best Execution Policy on regular basis, and shall notify the clients of any material changes, this includes a significant event of internal or external nature that could impact parameters of best execution, such as changes to the cost, price, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.

Consent

It is important that the Client review this Policy in conjunction with the Company’s Customer Trading Agreement, the Client Classification Letter and any other agreements or documents which affect the Client’s relationship with the Company. Please note that, by executing the Company’s Customer Trading Agreement, the Client will have consented to the provisions of this Policy.

Annex 1

Definitions

Execution Venue means a Regulated Market, an MTF, a Systematic Internaliser, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the function performed by any of the foregoing.

Multilateral Trading Facility (MTF) means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in Financial Instruments – in the system and in accordance with non-discretionary rules – in a way that results in a contract in accordance with the provisions of MiFID.

Regulated Market means a multilateral system operated and/or managed by a market operator which brings together or facilitates the bringing together of multiple third party buying and selling interests in Financial Instruments – in the system and in accordance with its non-discretionary rules – in a way that results in a contract, in respect of the Financial Instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with the provisions of MiFID.

Systematic Internaliser means an investment firm which, on an organised, frequent and systematic basis, deals on own account by executing client orders outside a regulated market or an MTF.

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