BEST EXECUTION POLICY

Transcription

1 BEST EXECUTION POLICY Prepared by : Treasury Department Date : 17 April 2018 Effective date : 1 May Next review date : 31 December 2018 Version :

2 Contents 1 Purpose of this Policy What is Best Execution Execution Venue / Broker selection Client Order Handling Over The Counter (OTC) Monitoring Disclosure... 5 Annex 1 - Execution Venues and Brokers

3 1 Purpose of this Policy When providing investment services to clients, Yapi Kredi Bank Nederland N.V (the Bank) will always act honestly, fairly and professionally in accordance with the best interests of its clients. This Best Execution Policy (the Policy) of the Bank sets out our approach to providing best execution to our professional and retail clients for the purpose of handling and executing orders in financial instruments (as defined by the Markets in Financial Instruments Directive (MiFID II)). 2 What is Best Execution When executing orders the Bank takes all sufficient steps to obtain the best possible result for their clients. To obtain best execution the Bank takes the following factors into account: Price: The price at which a financial instrument is purchased or sold; Costs: This includes explicit costs, e.g. exchange or clearing fees and implicit costs such as the market impact; Speed: The time period to execute a client order after its receipt; Likelihood of Execution: The likelihood to completely execute a client order; Likelihood of Settlement: The likelihood that the settlement of the transaction takes place at value date; Size and nature: The size of the client order in proportion to the average turnover in a specific financial instrument and specific restrictions in the client order such as the order type. To determine the relative importance of the factors mentioned above, the following criteria are taken into account: The characteristics of the financial instruments that are subject of the order; The characteristics of the client including the categorization of the client as retail or professional; The characteristics of the Execution Venues to which the client order can be directed; The characteristics of the client order, including where the order involves a Securities Financing transaction (SFT). For retail clients, best execution is determined by the price of the financial instrument and the costs related to execution (total consideration). For professional clients, other best execution factors other than price and costs are also taken into consideration, typically speed of execution, followed by likelihood of settlement. Below the relevant execution factors per type of financial instrument are listed. Equities: Shares and Depository Receipts Price: For equity products the market is primarily exchange driven. This means that the prices are set efficiently by the exchange market makers with whom the Bank will execute client orders. As the Bank does not have direct access to exchanges, it will use a Broker to access the trading venue. Cost/Likelihood: In achieving best execution, the Bank will, as relevant and appropriate, take into account liquidity as a prevailing factor for determining the best

4 execution for listed securities. Speed/Size: In normal market conditions orders will be executed promptly on receipt. For larger orders depending on liquidity and client request. Currencies Derivatives, Equity Derivatives, Interest Rate derivatives Price: The market is primarily Over-The Counter(OTC) driven. The prices are set by the market makers that conclude transactions on a Request For Quote(RFQ) basis. Where trading is also executed on a trading venue, the Bank will take into account liquidity as a prevailing factor for determining the best execution. Cost/Likelihood: Execution is on a best effort basis, customized to the client s requirements. If market liquidity results in reduced likelihood of execution or increased costs, then this will be explained to clients at the time of acceptance of RFQ. Execution fees will be incorporated in the final fees to the client, unless otherwise communicated with the client. Speed/Size: In normal market conditions orders will be executed promptly on receipt. All order sizes are accepted but issuer or national law or regulation may provide restrictions. 3 Execution Venue / Broker selection The Bank only cooperates with selected Brokers and Execution Venues that can demonstrate they meet specific, required criteria. As such, it makes heavy demands on the business conduct, integrity and trustworthiness of the third parties it uses to create an environment in which best execution can be ensured. The Bank will select an Execution Venue / Broker based on the execution factors. Where there is only one possible venue to execute a client s order the Bank will execute the order on that venue. When the Bank applies different fees depending on the Execution Venue, it will explain these differences in sufficient detail in order to allow the client to understand the advantages and the disadvantages of the choice of that single Execution Venue. If an order is received outside of the trading hours of the Execution Venue intended for the transaction in question, it will be placed on that venue on the next trading session. If the client wishes the order to be placed on the same day, then the client must provide instructions specifying a particular venue. The Bank will not switch the order to a different venue even if the order will not or cannot be executed on the selected Execution Venue over an extended period. The Bank shall not receive any remuneration, discount or non-monetary benefit for routing client orders to a particular Broker or Execution Venue which would infringe the requirements on conflicts of interest or inducements set out in MIFID II. Neither will the Bank structure or change commissions in such a way as to discriminate unfairly between Brokers or Execution Venues. In Annex II of this Policy, a list of Execution Venues and Brokers used by the Bank is available. The Bank doesn t invite clients to choose an Execution Venue or Broker but clients have the right to choose an Execution venue from the list in Annex II of this Policy. 4 Client Order Handling The Bank will satisfy the following conditions when handling client orders: a) Ensure that orders executed on behalf of clients are promptly and accurately

5 recorded and allocated; b) carry out otherwise comparable client orders sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of the client require otherwise; c) Inform a retail client about any material difficulty relevant to the proper carrying out of orders promptly upon becoming aware of the difficulty. Where the Bank is responsible for overseeing or arranging the settlement of an executed order, it shall take all reasonable steps to ensure that any client financial instruments or client funds received in settlement of that executed order are promptly and correctly delivered to the account of the appropriate client. The Bank will share information at request of a client demonstrating that the Bank has executed client orders in accordance with this Policy. When the client makes requests for the information about this Policy and how it is reviewed, the Bank will answer clearly and within a reasonable time. 5 Over The Counter (OTC) The Bank trades over the counter (OTC) where the Bank executes client orders outside the rules of a trading venue. When trading OTC the Bank uses one of the following methods to execute a client order: Outside a trading venue with selected high quality counterparties who deal against their own book or act as Systematic Internaliser ( as defined by MiFID II); Market Maker; or Other Liquidity Providers. Without the client s consent, the Bank is not allowed to execute client orders OTC. For this purpose the Bank kindly requests clients to complete the consent form, which is available on or can be sent to the client upon request. In case no signed consent form is available, the Bank will request this consent during order capturing process. The execution of orders outside trading venues may cause as a consequence increased risks (e.g. increased counterparty risks) which are taken into consideration in the assessment of Execution Venues. In the consent form the Bank also requests client s consent for not publishing limit equity orders which has not been executed. 6 Monitoring This Policy is reviewed regularly, at least once a year, and amended if necessary. The Bank will notify clients of any material changes to this Policy by publishing an updated version on A material change shall be a significant event that could impact factors of best execution such as cost, price, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. By carrying on business with the Bank after an updated version has been published, you shall be deemed to have consented to such changes to this Policy, unless you notify the Bank that you do not agree with certain changes to this Policy. The currently applicable version of the Best Execution Policy can be accessed on the Bank s website: 7 Disclosure

6 In order to comply with the regulatory provisions, the Bank will publish on an annual basis the top 5 Execution Venues in terms of trading volumes for all executed client orders per class of financial instruments. This reporting will be done separately for retail, professional clients and for Security Financing Transactions The Bank will also annually publish information about the quality of execution of these Execution Venues used for executing client orders across the various asset classes. The Bank will publish the information required on their website available for downloading by the public.

7 Annex 1 - Execution Venues and Brokers Note that this listing of Execution Venues and Brokers is not an exhaustive listing, but rather comprises those venues on which the Bank places significant reliance. The selection of offered Execution Venues per asset class is a result of a market analysis per asset class. The Bank analyzes all Execution Venues it is connected to and other potential Execution Venues to identify such Execution Venue which it considers to be most competitive Execution Venue to perform Best Execution for the client. The analysis and assessment will be performed on an ongoing basis.. The assessment may lead to the adoption of new Execution Venues or the deletion of an Execution Venue. The Bank reserves the right to use any other Execution Venue additional to those listed here as deemed appropriate in accordance with this Policy. Equities Yapi Kredi Bank Nederland N.V has no direct access to Regulated Markets. The Bank uses Yapi Kredi Yatirim Menkul Degerler A.S as a Broker to access the following Execution Venues: AMEX-NYSE MKT AMS-Euronext Amsterdam ASX-Australian Securities Exchange BRU-Euronext Brussels CSE-NASDAQ OMX FSE-Deutsche Borse HSE-NASDAQ OMX Helsinki ISE-Irish Stock Exchange LISB-Euronext Lisbon LSE_INTL-London Stock Exchange (IOB) LSE_SETS-London Stock Exchange MIL_Borsa Italiana/Milan Stock Exchange NASDAQ NSC-NASDAQ (Small cap) NYSE_New York Stock Exchange OSE_Oslo Stock Exchange PAR_Euronext Paris SIBE_BME Spanish Exchanges SSE_NASDAQ OMX Stockholm SWX_SIX Swiss Exchange TSE_Toronto Stock Exchange TSX_TSX Venture Exchange VIE_Vienna Stock Exchange VX_SIX Swiss Exchange

8 Debt Instruments AFS Group BV Bloomberg MTF Cantor Fitzgerald EU Citigroup Global Markets LTD Commerzbank AG Credit Agricole Credit Suisse AG Deutsche Bank AG GFI Securities Limited Goldman Sachs International HSBC Bank PLC ING Bank NV JP Morgan Securities PLC Kepler Cheuvreux Merill Lynch International Morgan Stanley Nomura International PLC OHV BV Royal Bank of Scotland PLC Société Générale Standard Chartered PLC Stifel Nicolaus Europe Limited Tradition UK LTD UniCredit Bank AG Wallach Securities BV Zürcher Kantonalbank

9 Currencies Derivatives, Equity Derivatives, Interest Rate derivatives Bloomberg Citigroup Global Markets Commerzbank AG Credit Agricole Credit Suisse AG Goldman Sachs International HSBC Bank PLC ING Bank NV JP Morgan Securities PLC Kepler Cheuvreux Merill Lynch International Morgan Stanley Nomura International PLC Royal Bank of Scotland PLC Société Générale Standard Chartered PL Thomson Reuters Forwards Matching Thomson Reuters FX All UniCredit Bank AG Zürcher Kantonalbank