Order Execution Policy Disclosure Statement. of Deutsche Bank AG Hungary Branch

Transcription

1 Order Execution Policy Disclosure Statement of Deutsche Bank AG Hungary Branch

2 Table of Contents 1. Scope of This Statement 3 2. How The Policy Will Operate 4 3. Best Result 5 4. Order Handling 6 5. Policy review 8 6. Other 7 ANNEX 1 9 ANNEX / 11

3 1. Scope of This Statement This Statement contains information on the Order Execution Policy (the Policy ) of Deutsche Bank AG Hungary Branch. (the Bank ) and is addressed to the Bank s clients (both professional and retail). The Bank currently includes the operational sub-divisions of Global Markets ( GM ) and Corporate Finance including Corporate Treasury Sales ( CTS ). 1.1 When Best Execution will and will not apply The Policy applies where the Bank is providing order execution services. When the Bank executes a transaction with you, it may either be acting on your behalf, or dealing with you as an arm s length counterparty. If the Bank executes a transaction on your behalf, and has not categorised you as an eligible counterparty ( ECP ), it will provide you with a best execution service ( best execution ) in accordance with the Bank s Policy. This Disclosure Statement is intended to give you appropriate information on the Policy. It is a summary, and is not intended to be comprehensive. If you have any queries as to particular aspects of the Policy you should address them in the first instance to your normal Bank contact. The Bank will be happy to respond to any reasonable enquiries of this sort. 1.2 What is meant by acting on your behalf The Bank will be acting on your behalf where: You have placed an order which the Bank has explicitly agreed to execute as your agent, or The Bank deals with you as principal and not as agent, but assumes similar duties to those of an agent. This may happen where the Bank contracts with you as principal but does not assume any price risk because it has simultaneously executed a matching back-toback trade in the market (known as riskless principal execution), or explicitly accepts a duty to provide best execution but chooses to fill the order off its own book ( own account best execution ); or You have given the Bank authority to exercise discretion to deal on your behalf and the Bank explicitly agrees this authorization. 1.3 What is meant by dealing or dealing as counterparty The Bank will be dealing with you on an arm s length counterparty basis if the Bank is dealing with you as principal for its own account and risk and without any undertaking to provide best execution. This will typically happen where the Bank: routinely provides two way quotes in financial instruments; and /or 3 / 11

4 in response to specific client requests provides quotes upon which a client can deal; and you elect to deal with the Bank at one or more of those quoted prices. 1.4 Eligible counterparties If either: (a) (b) you have been categorised as a professional client falling within the definition of a per se eligible counterparty and the Bank has not agreed to contract you back into best execution, or you are a professional client which has been categorised as an elective eligible counterparty; 1.5 Specific instructions then the Bank will owe you no duty of best execution as defined in this Policy. If you do not know your client categorisation you should ask your normal Bank contact to confirm this to you. If the Bank accepts specific instructions from you as to how your order should be executed, we will follow those instructions. This may result in your order not being executed with the best result. 1.6 Asset / Product Classes The Bank divides its client order execution capabilities within divisions by asset / product class. In respect of some classes the Bank will act as dealer only, in respect of others it may also act on behalf of clients. More information is available at Annex How The Policy Will Operate 2.1 General Where the Bank provides best execution it will take reasonable care to do so in accordance with both this policy and with relevant rules and regulations. This does not mean that the Bank assumes or accepts any fiduciary, contractual or other duty to provide best execution except in accordance with those rules and regulations. For these purposes, reasonable care means that the Bank will satisfy itself that it has processes and procedures in place that can reasonably be expected to lead to the delivery of the best result when providing a best execution service, and will take reasonable steps to follow those processes and procedures based on the resources available to it. The Bank does not guarantee that it will always be able to provide best execution on each and every relevant occasion. 4 / 11

5 2.2 Execution, reception and transmission of orders 3. Best Result 3.1 General Generally where the Bank is acting on your behalf it will either handle your orders itself as detailed in this Policy, or we may, at our discretion pass your orders to another firm(s) to execute. Such other firm(s) may be connected or affiliated with the Bank. In these circumstances we will satisfy ourselves that the other firm has arrangements in place to enable us to comply with the Policy. In the case the other firm is outside the EEA, then we will require that orders are executed according to local rules and regulations. The Bank s Policy for executing orders on your behalf is based around: (a) (b) (c) (d) a selection of suitable venues for execution; an evaluation of the factors to be taken into account when choosing the venues; an assessment of your particular client characteristics both in terms of your particular requirements, and the nature of the service which the Bank can offer to meet them; and a judgment as to how the first three factors can be best addressed and utilised in the context of your particular client order. 3.2 Execution Venues When the Bank executes orders on your behalf it will reasonably attempt to achieve the best result by selecting execution venues that consistently allow the best result to be achieved. Venues can be: EEA Regulated Markets (usually exchanges where companies have their primary listing or where their securities are admitted to trading and also those exchanges where derivatives are listed and traded), Multi-lateral Trading Facilities ( MTF s ), Systematic Internalisers ( SI s) which are investment firms, like Deutsche Bank AG, which on an organised frequent and systematic basis deal on own account by executing client orders outside a regulated market or MTF, and other liquidity providers that have similar functions to any of the above (which include non EEA regulated markets and exchanges). The execution of orders on a client s behalf other than on an EEA regulated market or MTF after 1 st February 2008 will be considered as OTC executions (i.e. over-the-counter). 5 / 11

6 3.2.1 Venues upon which the Bank places significant reliance The venues substantially relied upon by the Bank, and which we consider will consistently provide for the best result when executing your orders, are listed in Annex 2 of this Policy Single venue financial instruments 4. Order Handling 4.1 General Some instruments only have a single execution venue in the EEA for example listed non fungible futures and options. The Bank will route orders in such instruments to the relevant (single) venue and this will be regarded as achieving the best result when acting on your behalf. When in receipt of an order to which this Policy applies, the Bank will normally send or route it directly to an execution venue, which may be to ourselves, or to a combination of venues, chosen in accordance with the Policy. The decision making process concerning the routing of an order that achieves the best result will be assessed by reference to various factors. In particular, the Bank will give weight to the factors of price, cost, attributes of financial instrument, speed, size, and probability of execution when assessing the best result for professional orders. The weights to be given are dynamic and may depend upon several variables and characteristics including the financial instrument, order type, and market / execution venue conditions. Orders may at the Bank s discretion be reviewed during their execution life cycle and amended, for example by changing the venue choice or by the amounts of order sent to any particular venue or combination of venues, where this is considered appropriate or desirable for best execution purposes. The Bank will take into account certain of your characteristics, such as your understanding and experience of the market in question, your dealing profile, the nature of the execution service you require and the specific and general instructions you give which may prioritise how orders are sent, routed or executed. The Bank will normally execute your orders and other comparable client orders sequentially and promptly. 4.2 Orders from professional clients In the absence of specific instructions from a professional client, the Bank will exercise its own discretion in determining the factors that it needs to take into account for the purpose of complying with its Policy. 4.3 Orders from other investment firms or credit institutions acting on behalf of their own clients 6 / 11

7 If you are an investment firm acting on behalf of your own clients, the Bank will (unless agreed otherwise) treat you as its client for the purposes of the Policy to the exclusion of your underlying clients. 4.4 Orders from retail clients or from other firms identified as retail orders Notwithstanding the paragraph 4.2, you may request that some or all of your orders be treated as retail client orders. Where the Bank agrees to such an arrangement you should distinguish between retail and professional orders when transmitting them to us. When assessing the best result for orders from clients categorized as retail clients or identified as retail orders, the Bank will normally give weight to the factors of price and cost only. This means that our execution criteria will focus on the total consideration paid or received for your retail order, including venue fees, clearing and settlement fees, plus any fee paid to a 3 rd party. The Bank may however on occasion also consider other factors such as speed, size, and likelihood of execution and /or settlement where it considers this appropriate or necessary. 5. Policy review 5.1 Regular monitoring and review The Bank will monitor, review, and assess the Policy s effectiveness on at least an annual basis, and additionally whenever a material change occurs which in the Bank s view may affect the Bank s ability to consistently achieve best result using a chosen venue. Changes to the execution arrangements following from such monitoring will be made as the Bank considers appropriate. 5.2 Policy updates (via internet and durable medium) 6. Other This Policy will be kept up to date and accessible on the internet at the following address: under topic MiFID. For those clients that do not wish to receive the Policy via the internet and any updates, it will also be available in durable medium upon request. 6.1 Matters beyond the Bank s reasonable control Due to systems failures or other reasons which are unavoidable or beyond the Bank s reasonable control, we may from time to time execute orders in a manner that differs from the normal process contemplated by the Policy. In the event of such an occurrence, we will still endeavour to execute orders on the best terms available in the relevant circumstances. 6.2 Consent This Policy is an attachment to, and inseparable part of, the Bank s Terms of Business related to Investment Services and Ancillary Services. By entering into 7 / 11

8 a frame contract with the bank for investments services or by giving the Bank orders for execution, the client gives its consent to this policy. 6.3 Express Consent As already mentioned in this policy, orders which are executed after February 1 st 2008 other than through the order books of an EEA regulated market or MTF are considered as OTC executions. The Bank s order execution policy provides for the possibility of executing orders other than through the order books of an EEA regulated market or MTF, including the possibility that orders may be routed to ourselves as an execution venue. Express consent will normally be required from you before the Bank may proceed to execute your orders in such a fashion, and where appropriate the Bank will seek such consent by way of general agreement, i.e. within the Bank s terms of business, stand-alone consent letter, or individually in relation to specific transactions. Express consent will not be required for an OTC execution in situations where the relevant financial instrument is not listed on or admitted to trading on an EEA regulated market or MTF. 6.4 Order execution enquiries Where you wish to query an order execution, you may ask the Bank to demonstrate that it has executed your order in compliance with the Policy. Original issue date: Last review date: / 11

9 Annex 1 Asset / Product Classes Financial Instruments This section discusses the application of the Policy to particular asset classes. It is intended only as an illustration of certain points and not as an exhaustive explanation of how the Policy will operate in respect of each asset class mentioned here. In summary the Policy applies to the financial instruments currently traded by the Bank: bonds, OTC derivatives (including foreign exchange derivatives), and where the Bank is executing orders on behalf of a client. The Policy does not apply to non MiFID financial instruments. Asset Class Description Application of best execution Interest-bearing securities (bonds and other securities representing a credit relationship) Government Bonds, Covered Bonds, Pfandbriefe, Floating Rate Notes, Corporate Bonds and Emerging Markets Bonds. Out of scope The Bank s current business policy is to act exclusively on a dealing basis, i.e. upon the client s specific request for quote. Consequently, since you transact with us on the basis of prices provided to you dealing as our counterparty, those transactions will be outside the scope of this Policy. The Bank offers clients the option of buying interest-bearing securities (including zero bonds) directly from the bank or selling them directly to the Bank. Information on the current range of products, in particular the price, can be requested from the Bank. Securities are purchased and sold at fixed prices agreed with the Bank (fixed-price transaction). Note: With fixed-price transactions, the Bank s revenue share is already included in the fixed price. No further costs (e.g. brokerage fee) will be charged. 9 / 11

10 Asset Class Description Application of best execution In scope Should, as an exception, a fixed-price transaction between the Bank and the client not materialize, the Bank shall execute the client's orders on a commission basis as follows: Bonds whose home exchange is the Budapest Stock Exchange Execution on the Budapest Stock Exchange Financial derivatives OTC derivatives (e.g. interest rate and currency derivatives in the form of options, forwards and swaps) Depending on the financial instrument, special terms or contracts apply (Master Agreement for Financial Transactions with corporate customers (Close-out Netting Agreement), Addendum for Foreign Exchange Transactions and Foreign Exchange Options). Bonds with home exchange abroad If a bond is traded on the Budapest Stock Exchange, the order will be executed there. If a bond is not traded on Budapest Stock Exchange, Deutsche Bank AG as SI. If a bond is not traded by Deutsche Bank AG, the bank will select an alternative execution venue. Out of scope The Bank s current business policy is to act exclusively on a dealing basis, i.e. upon the client s specific request for quote. Consequently, since you transact with us on the basis of prices provided to you dealing as our counterparty, those transactions will be outside the scope of this Policy. The Bank offers clients the option of buying OTC derivatives products directly from the Bank or selling them directly to the Bank. Information on the current range of products, in particular the price, can be requested from the Bank. Fixed-price transaction are executed against the Bank s dealing books. Note: With fixed-price transactions, the Bank s revenue share is already included in the fixed price. No further costs (e.g. brokerage fee) will be charged. 10 / 11

11 Annex 2 Execution Venues The following is a non exhaustive list of venues used by the Bank to execute your orders. Any additional venues used, but not listed here, will nevertheless still have been selected in accordance with this policy. Interest-bearing securities (Bonds/Rates) EEA Regulated Markets Budapest Stock Exchange Systematic Internalisers Deutsche Bank AG V / 11