Order execution policy
This is an English translation of the Slovenian original provided as a reference to aid the understanding of the relevant documents. Equito Brokerage Company, Ltd. shall not be held responsible for any erroneous translations and is presented as is. In case of a discrepancy, the Slovenian original will prevail as an official document and applicable for interpretation.
1. GENERAL PROVISIONS
1.1 Purpose of the policy
The purpose of the Policy on the execution of clients orders (the “Policy”) is to facilitate the execution of orders on terms that are most favourable to the Company’s clients and to implement arrangements that facilitate the execution of trades in the best interests of clients.
1.2. Policy content
The policy defines:
(1) best execution of client orders;
(2) rules on handling orders.
2. BEST PERFORMANCE
2.1. Executing orders on the most favourable terms
In executing client orders, the Company shall take all steps necessary to execute the order on terms most favourable to the client, taking into account factors relevant to the execution of the order such as price, cost, speed, likelihood of execution and settlement, value and characteristics of the order and other circumstances relevant to the execution of the order such as execution fees, clearing and settlement costs and other fees paid to third parties involved in the execution of the order.
In determining the relative importance of the factors referred to in the preceding paragraph of this Article, the Company shall take into account the following criteria:
(1) the characteristics of the order;
(2) the characteristics of the financial instruments that are the subject of the contract;
(3) the characteristics of the execution venues to which the order is sent.
2.2. Policy implementation
The Company regularly monitors the effectiveness of the implementation of its procurement arrangements and policies to identify and, where necessary, correct deficiencies. In particular, it shall regularly assess whether the execution venues to which orders are sent allow them to be executed on terms and conditions that are most favourable to clients. The Company shall carry out regular audits by means of the following measures:
(1) checking, monitoring and comparing execution venues against each other with the aim of achieving the lowest trading costs.
(2) Checking, monitoring and comparing execution venues with the aim of obtaining the best price for buying or selling a financial instrument.
(3) Verification, monitoring and peer comparison of execution venue infrastructure. Emphasis is placed on adequate communication, up-to-date reporting of executed trades, efficient provision of settlement services and partnering in the event of any problems with trade settlements.
Notwithstanding the preceding paragraph, the Company shall, from a risk management perspective, periodically review the possibility of executing trades in particular capital markets also through execution venues that do not offer the best execution, which shall not represent a significant proportion of the total number of trades.
The Company shall review the Policy annually. The Company shall promptly review the adequacy of the Policy and, if necessary, amend it whenever there is any change which may materially affect the Company’s ability to achieve execution of orders on terms most favourable to its clients.
2.3. Forwarding orders
The entities to which a trading order for transferable securities may be submitted for execution are:
(1) brokerage firms
(2) banks;
(3) other financial institutions that act as an intermediary in the primary or secondary issuance of individual transferable securities.
The entities to which a trade order for money market instruments may be submitted for execution are:
(1) brokerage firms
(2) banks;
(3) other financial institutions that act as intermediaries in the primary or secondary onward issuance of individual money market instruments.
The entities to which a trading order for units of collective undertakings may be submitted for execution are:
(1) brokerage firms
(2) banks;
(3) management companies and alternative investment fund managers.
3. RULES ON THE HANDLING OF ORDERS
3.1. General principles
The Company has procedures and measures in place to ensure prompt, fair and expeditious execution of transactions on behalf of its clients. To this end, the Company has adopted internal policies, regulations and procedural instructions for the handling of orders.
The procedures and measures referred to in paragraph 1 of this Article shall ensure that:
(1) record and allocate executed client orders promptly and accurately,
(2) execute comparable orders in sequential order and without delay, unless the nature of the order or prevailing market conditions make this impracticable;
(3) financial instruments or sums of money received for settlement of executed orders shall be promptly and properly transferred to the account of the individual client.
The Company shall not misuse information about unexecuted orders for clients and shall take all reasonable steps to prevent the misuse of such information by the persons concerned.
3.2. Aggregating and distributing orders
The Company may aggregate orders for the account of clients or use orders for a joint account.
No party shall receive preferential treatment or the execution of orders on a joint account will have any adverse effect on the achievement of the best possible result for any party.
The Company shall apply the pro rata principle to allocate fairly the effects of transactions between parties arising from a joint account order. This means that orders executed at different prices are allocated to the clients’ accounts in proportion to their shares in the underlying order, at the same price for all clients. This price is calculated as a weighted average of the prices of the individual trades – the so-called average price. The weights are the lot quantities in each transaction. In the event that, in accordance with the pro rata condition, it is not possible to allocate the entire quantity because two or more parties have equal shares, the remainder shall be allocated at random among all parties in the aggregate order.
4. FINAL PROVISIONS
4.1. Control
The Compliance Officer and the Company’s management oversee the implementation of all provisions of this Policy.
4.2. Informing clients
The Company is obliged to make this Policy reasonably known to the client in such a way that the client can clearly understand how the orders will be executed for the client.
4.3. Final provisions
This Policy shall enter into force on the date of the Company’s authorisation to provide investment services.