Best Execution Policy for transactions in Financial Instruments

Transcription

1 Best Execution Policy for transactions in Financial Instruments Belfius Bank has adopted this policy for the execution of its Clients orders in order to comply with the requirements of the European Directive on markets in Financial Instruments. This execution policy applies to orders in Financial Instruments placed with Belfius Bank by the Client via the available distribution channels. Belfius Bank will take all reasonable measures to ensure the best execution of its Clients orders, having due regard for the following criteria: price, costs, speed and likelihood of execution and reliability of settlement, volume, the nature of the order, etc. Belfius Bank reserves the right to execute orders through a Systematic Internaliser, or OTC. 1. Definitions Client : any non natural person who is both capable and authorised, acting for his own account or that of third parties, and who places an order in Financial Instruments. Specific Instruction : any specification made by the Client with regard to the order he gives to Belfius Bank (e.g.: specify the place of execution, exclusion of certain places of execution, specify a limit price, etc.) Financial Instrument : any financial instrument, as listed in article 2(1) 1 of the loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers (law of 2 August 2002 on supervision of the financial sector and financial services). Regulated Market : any market, as defined in article 2(1) 5 and 6 of the loi du 2 août 2002 relative à la surveillance du secteur financier et aux services financiers. Multilateral Trading Facility : a trading system, which is not a Regulated Market, and on which certain Financial Instruments are listed. OTC (Over the Counter) : a private transaction, which is not executed on a Regulated Market, or through a Multilateral Trading System. Public Auction-mart : non-regulated Belgian market on which shares, bonds and savings certificates are traded. Systematic Internalizer : any enterprise, which trades internally in certain Financial Instruments (generally shares) and acts as counterparty. The main places of execution selected by Belfius Bank are listed in the appendix. Belfius Bank has online connections to the market access systems through financial intermediaries. The selection policy for the financial intermediaries who provide access to places of execution is based on the quality of their services and of the systems used by these intermediaries (speed and security), and their pricing policy. The selection of financial intermediaries is periodically reviewed Choosing a place of execution For shares listed on a market outside of the European Economic Area, the place of execution will be the issuer s home market, having due regard for the criteria of price, liquidity and likelihood of execution. For shares listed on at least one market of the European Economic Area, Belfius Bank uses a selection module to determine the best place of execution. The total price is regarded as the key criterion for selecting the place of execution. The total price comprises the price on the market and the costs (excluding taxes) borne by the Client. When comparing the prices Regulated Markets are put in competition with Multilateral Trading Facilities. Belfius Bank reserves the right to include Systematic Internalizers in its comparison. This module ensures that the order is dynamically monitored: Orders at market value: These orders are sent to the market for immediate execution. As it receives and inspects market data from the eligible places of execution, the module determines which eligible places of execution offer the best price/cost ratio for a single listing currency. The order is then sent to this market immediately, for execution. Orders with limit price: The module checks whether the order can be executed immediately, in part at least, at the eligible places of execution in the same way as orders at market value. If necessary, the part of the order that has not been executed is then transferred to the most favourable market. If market conditions change in favour of another place of execution, the order will automatically be forwarded to that place of execution Specific Instruction Specific Instructions given by Clients will always be followed. This may mean that the execution policy shall not be applied, or at least not entirely. In this case, the policy will only apply to the aspects not covered by the Specific Instruction. Moreover, the Client may always specify the place of execution when placing an order. In this case, the aforementioned selection module will not be used. 3. Other listed instruments There are other Financial Instruments besides shares that list on Regulated Markets (warrants, exchange traded funds, etc.). These instruments are treated in the same way as shares. 2. Shares 2.1. Selection of places of execution and accessibility The selection criteria for places of execution are: transparency and operating procedures of the market; defined liquidity; efficiency of the technical platform; membership and access costs; reliability of the settlement and delivery process; presence of a clearing house or service; quality of market data retrieval (historically). Places of execution may be Regulated Markets, Multilateral Trading Facilities, or Systematic Internalizers. All of these places of execution are periodically assessed against the above criteria and the list of selected places revised accordingly. 4. Financial instruments traded OTC For OTC orders, Belfius Bank gives priority to the criterion of likelihood of execution and settlement of the order, regardless of the type of Financial Instrument involved. Therefore, once the Client s agreement to the transaction has been obtained, we undertake to ensure the best likelihood of the order s execution and settlement, as quickly as possible. In applying this policy, Belfius Bank may act as an active counterparty for OTC orders, in some cases by basing its prices on models developed internally. Because transactions are settled and delivered outside an organised system, Belfius Bank cannot be held responsible for failing to do its utmost to honour the defined obligations under this policy if the Client is responsible for the order not being settled/delivered. These orders relate, inter alia, to fixed income products (bonds, reverse convertibles), unlisted derivative products such as options, warrants, swaps, IRS and structured products. 1/5

2 5. Undertakings for Collective Investments Undertakings for Collective Investment (UCI) include trust funds, mutual funds and any other funds operated on a primary subscription basis Primary subscription The Bank will always treat orders in UCI as primary subscriptions, or redemptions, unless the Client gives a Specific Instruction to buy or sell any listed UCI via the specified stock exchange. The Client is advised that liquidity on the stock exchange is normally very limited and Belfius Bank gives no guarantee that the order will be executed Order management For UCI under Belgian law and UCI under foreign law whose promoter is part of the Belfius Group, Belfius Bank forwards the order to the transfer agent named in the (simplified) prospectus of the UCI in question. For UCI whose promoter is not part of the Belfius Group, Belfius Bank will forward the Order to the promoter or an Order centraliser (who, in turn, will forward the Order to the promoter) without the limit time for execution stated in the (simplified) prospectus being guaranteed. 6. Savings certificates Subscriptions for savings certificates issued by Belfius Bank are executed by the Bank in accordance with the characteristics of the issue. If the Client wishes to sell a savings certificate issued by Belfius Bank before maturity, there are two options, in principle: either Belfius Bank will redeem the savings certificate, or it will be sold on the Public Auction-mart. Given the higher cost and low liquidity of the Public Auction on the one hand and the security and speed of execution of repurchase by Belfius Bank on the other, Belfius Bank opts for repurchase by Belfius Bank unless the Client gives Specific Instructions. The main criteria in determining the price are the market interest rate, the accrued interest and the remaining term. Savings certificates of other institutions can only be sold on the Public Auction-mart. APPENDIX List of main places of execution Regulated Markets: American Stock Exchange AMEX Athens Stock Exchange Borsa Italiana Frankfurt Stock Exchange (including Xetra trading platform) London Stock Exchange Luxembourg Stock Exchange Madrid Stock Exchange NASDAQ New York Stock Exchange NYSE Euronext Amsterdam Stock Exchange NYSE Euronext Brussels Stock Exchange NYSE Euronext Lisbon Stock Exchange NYSE Euronext Paris Stock Exchange OMX Copenhagen Exchange OMX Helsinki Exchange OMX Stockholm Exchange Oslo Stock Exchange Vienna Stock Exchange Virt-X (Switzerland) 7. Revisions and amendments Belfius Bank will regularly assess this order execution policy against the relevant criteria and market developments. The policy will be assessed at least once a year. The Client will be informed promptly of any amendments that have a significant impact on the way in which orders are executed. 2/5

3 Document of signature Best execution policy for transactions in financial instruments To be sent back to Belfius Bank Parcel No. U.V. Filing Number Date: Best Execution is one of the basic principles of the MiFID (Markets in Financial Instruments Directive). This means that the financial intermediary must take all reasonable measures to obtain the best result possible for this client. To comply with its best execution obligations, Belfius Bank outlined a Best Execution Policy for transactions in Financial Instruments (see enclosure). In confirmation of your approval of Belfius Bank s Best Execution Policy for transactions in Financial Instruments, please send back this reply coupon, dated and signed by your company s legal representatives or by the person(s) authorized to make transactions in financial instruments. By signing this reply coupon, you accept that Belfius Bank can execute your orders outside a regulated market or Multilateral Trading Facility (MTF). I declare that I have taken note of the Best Execution Policy for transactions in Financial Instruments of Belfius Bank and that I agree with its contents. Place Date Belfius Bank SA/NV IBAN BE BIC GKCCBEBB Insurance agent FSMA no A 3/5

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5 Document of signature Best execution policy for transactions in financial instruments Specimen client Parcel No. U.V. Filing Number Date: Best Execution is one of the basic principles of the MiFID (Markets in Financial Instruments Directive). This means that the financial intermediary must take all reasonable measures to obtain the best result possible for this client. To comply with its best execution obligations, Belfius Bank outlined a Best Execution Policy for transactions in Financial Instruments (see enclosure). In confirmation of your approval of Belfius Bank s Best Execution Policy for transactions in Financial Instruments, please send back this reply coupon, dated and signed by your company s legal representatives or by the person(s) authorized to make transactions in financial instruments. By signing this reply coupon, you accept that Belfius Bank can execute your orders outside a regulated market or Multilateral Trading Facility (MTF). I declare that I have taken note of the Best Execution Policy for transactions in Financial Instruments of Belfius Bank and that I agree with its contents. Place Date Belfius Bank SA/NV IBAN BE BIC GKCCBEBB Insurance agent FSMA no A 5/5