ICAP Execution and Order Handling Policy

Transcription

1 ICAP Executin and Order Handling Plicy Nvember 2017 This Executin and Order Handling Plicy (the Plicy ) is applicable t executin services prvided t yu by any f the fllwing entities and any f their successrs, tgether with any affiliates f them that are authrised t prvide investment services and perate under the ICAP brand within the UK r any ther member state f the Eurpean Unin/Eurpean Ecnmic Area ( EU/EEA ): ICAP Energy AS; ICAP Energy Limited; ICAP Eurpe Limited; ICAP Deutschland GmbH; ICAP Scandinavia Fndsmæglerselskab A/S; ICAP Securities Limited; r The Link Asset & Securities Cmpany Limited ( ICAP ). The Plicy shuld be read in cnjunctin with the ICAP Terms f Business. Executin Services In prviding executin services t yu in relatin t financial instruments (as set ut in Annex 1), ICAP may (subject always t applicable law): (1) arrange a transactin in the ver-the-cunter financial r cmmdities markets, which may be inside r utside f the EU/EEA; (2) arrange fr the submissin f trading interests t a trading venue fr executin, which may be inside r utside f the EU/EEA; (3) arrange a transactin which is submitted t a trading venue fr registratin, which may be inside r utside f the EU/EEA; (4) within an ICAP-perated rganised trading facility ( OTF ), arrange and execute rders placed n that ICAP OTF; r (5) transmit an rder t anther entity (which may be an affiliate f ICAP) fr executin in accrdance with ne f the methds described abve. Organised Trading Facilities The Eurpean regulatry package knwn as MiFID II intrduced OTFs as a new type f multilateral trading venue alngside regulated markets ("RMs") and multilateral trading facilities ( MTFs ). Details f the OTFs perated by ICAP are cntained in the fficial rulebks, which shuld be cnsulted fr infrmatin n the financial instruments, ther prducts and transactin types that are tradable within them. The peratr f an OTF is required t exercise discretin in relatin t the executin f rders, either when deciding t place r retract an rder n the OTF and/r when deciding nt t match ptential rders

2 available in the system. The exercise f discretin within ICAP s OTFs is separate frm the requirement t prvide best executin, which is discussed in mre detail in Annex 2. Business Mdels ICAP s executin services are prvided thrugh: vice brking, where brkers, supprted by prprietary screens displaying histrical data, analytics and real-time prices, discver price and liquidity fr their clients; and electrnic platfrms. These arrangements can be cmbined in hybrid brking mdels, which allw fr the interactin f trading interests thrugh bth vice and electrnic systems. The business brkers prducts using three majr executin methds: Name Passing (where all cunterparties t a transactin settle directly with each ther r thrugh a settlement agent); Matched Principal (where an ICAP entity is a cunterparty t bth sides f a matching trade); r Exchange Give-Up (where a brker places an rder fr a client n a trading venue and then gives up the resulting trade t the relevant client r its clearer). A derivatin f this business mdel includes trades which are privately negtiated and registered n an exchange r MTF r prvides the clients with a settlement prcess thrugh a central cunterparty (CCP settlement). When Best Executin Is Owed ICAP will take sufficient steps t achieve the best verall trading result when acting as brker in the executin r receptin and transmissin f rders in financial instruments and, when acting as the peratr f an OTF, in cncluding transactins in financial instruments n that OTF. This means that ICAP will aim t prvide best executin subject t and taking int accunt the nature f yur rders, the prices available t ICAP in the market, the nature f the market in questin and a reasnable assessment f the relevant executin factrs (which are detailed belw). ICAP s intentin is, s far as pssible, t exercise cnsistent standards and perate the same prcesses acrss all markets, clients and financial instruments in which it perates. ICAP als intends t prvide yu and ther market participants with access t (where pssible) tradable prices n a nn-discriminatry basis. Hwever, the diversity in thse markets and instruments, what ICAP knws f yur wn trading intentins, and the kind f rders that yu may place, mean that different factrs will have t be taken int accunt in relatin t any particular transactin. When Best Executin Is Nt Owed Ntwithstanding the intentins expressed abve, ICAP des nt undertake t prvide best executin in the fllwing circumstances:

3 Eligible Cunterparties If yu are classified as an Eligible Cunterparty, yu will nt be entitled t best executin under the UK Financial Cnduct Authrity ( FCA ) r equivalent EU/EEA rules (pursuant t Article 30 f MiFID II, which disapplies the best executin bligatin under Article 27 f MiFID II fr Eligible Cunterparties). Legitimate reliance In the whlesale OTC derivatives and bnd markets (and fr the avidance f dubt this wuld include derivatives in Equities, Energy and Cmmdities) in which ICAP perates (and as recgnised by the Eurpean Cmmissin) it is nrmal market practice fr buyers and sellers t shp arund by appraching several brkers/dealers fr a qute. In these circumstances, there is n expectatin between the parties that the brker/dealer chsen will we best executin. As a sphisticated participant in the whlesale markets, unless yu advise us t the cntrary we will assume that this is yur nrmal trading behaviur. When Best Executin is deemed t have been prvided ICAP is deemed t have prvided best executin in the fllwing circumstances: Client Instructins Where yu prvide ICAP with a specific instructin in relatin t yur entire rder, r any particular aspect f yur rder, including an instructin fr yur trade t be executed n a particular venue, ICAP will execute the rder in accrdance with yur instructins. In fllwing yur instructins, ICAP will be deemed t have taken all sufficient steps t prvide the best pssible result fr yu in respect f the rder, r aspect f the rder, cvered by yur specific instructins. 1 Nte that when yu aggress a resting rder r place an rder n an ICAP MTF, the best executin prvisins f MiFID II will nt apply t the peratr f the MTF. Clients ICAP clients must be classified as either Eligible Cunterparties r Prfessinal Clients as defined in MiFID II and by the FCA. The classificatin f a client is ntified t the client in a separate ntice (the Client Classificatin Ntice). MiFID II entitles clients t request a different client classificatin frm that ntified in the Client Classificatin Ntice in respect f ne r mre investment services r transactins, r ne r mre types f transactin r prduct. Any such request must be made t ICAP in writing. Hwever, because ICAP always intends t handle rders and indicatins f interest in an equitable and cnsistent manner, nce a client is classified as an Eligible Cunterparty fr the purpses f a particular instrument, it is ICAP s plicy that it will decline t prvide services shuld an Eligible Cunterparty request t be re-classified fr the purpses f ne transactin f a type it custmarily undertakes. There may be exceptinal circumstances and ICAP will cnsider each written request n a case by case basis. 1 Article 66(3)(f) f DA2.

4 Executin Venues This Plicy sets ut the venues n which ICAP may execute yur rder. It has identified thse venues n which ICAP mst regularly seeks t execute yur rders and which ICAP believes ffer the best prspects fr achieving the best pssible results fr yu, taking int accunt the executin factrs detailed belw. ICAP is able t execute trades n yur behalf n any f the fllwing executin venues: any MTF perated by ICAP; any OTF perated by ICAP; regulated markets, MTFs and OTFs nt perated by ICAP; (in a quasi-venue r nn-venue capacity), systematic internalisers, market makers r ther liquidity prviders; and executin venues in nn-eu/eea cuntries that perfrm a similar functin t any f the freging t which ICAP has access and which are listed in Annexes 3 9 accrding t the relevant classes f financial instrument. Please nte that this list is nt intended t be exhaustive and ICAP reserves the right t utilise alternative executin venues. When selecting the venue n which t transact, ICAP will take sufficient measures t ensure that the selected venue btains the best pssible trading result fr its clients, subject t the fllwing general factrs: In the OTC markets in which ICAP perates, it can nly give clients visibility t prices that have been cmmunicated t ICAP by ther clients that perate in the same market; accrdingly, any best utcme will slely be within these limits. Hwever, when executing rders r taking a decisin t deal in OTC prducts, including bespke prducts, ICAP will check the fairness f the price prpsed t the client by gathering market data used in the estimatin f the price f such prduct and, where pssible, by cmparing with similar r cmparable prducts; ICAP will prvide details f all tradable bids and ffers (subject t the ther matters referred t belw); Time availability f prices in many markets, there are lulls and spikes in trading as negtiatins align trading interests at different times and different parts f the curve; accrdingly, the last traded price may nt always be available r act as a reliable indicatr f current price; ICAP cannt allw clients t trade in a market unless it is reasnably satisfied that the client (via an agent r therwise) is peratinally capable f settling the relevant trade; ICAP cannt cntrl either the cst f credit (credit premium) r credit acceptance between its clients; and where ICAP invites yu t chse ne executin venue rather than anther, we will prvide fair, clear and nt misleading infrmatin t prevent yu frm chsing ne executin venue rather than anther n the sle basis f the price plicy applied by ICAP. 2 In cases where ICAP applies different fees depending n the executin venue, we will explain these differences t yu in sufficient detail t allw yu t understand the advantages and disadvantages f the chice f a particular executin venue. 3 Similarly, 2 Article 66(5) f DA2. 3 Article 66(4) f DA2.

5 ICAP will infrm yu f any inducements (if any) it receives frm an executin venue and f the value f any mnetary r nn-mnetary benefits it receives in circumstances where ICAP charges mre than ne participant in a transactin. 4 The executin venues n which ICAP places particular reliance in meeting its best executin bligatins, and the relevant factrs fr selecting a particular executin venue, als vary depending n the class f financial instruments t which yur rder relates. Please see Annexes 3 9 fr mre detail n the variatin that applies acrss the varius classes f financial instruments. 5 These Annexes als specify in which circumstances ICAP may execute an rder utside a trading venue. 6 ICAP will publish the tp five executin venues in terms f trading vlumes fr all executed client rders per class f financial instruments in accrdance with the prvisins in RTS 28 f MiFID II. This will be made available n ICAP s website. Executin Factrs In the absence f express instructins frm yu, ICAP will exercise its wn discretin in determining the factrs that ICAP needs t take int accunt fr the purpse f prviding yu with the best pssible result. These executin factrs in the whlesale markets in which ICAP perate will include, but are nt restricted t, the: characteristics f the client; size, nature and characteristics f the rder; characteristics f the executin venue n which that rder can be directed; likelihd and speed f executin; and price and csts f executin. The imprtance f each f the executin factrs may be weighted differently depending n the class f financial instruments and the type f service prvided. Please see Annexes 3 9 fr mre detail n the variatin that applies acrss the varius classes f financial instruments. 7 Order Handling When handling rders, ur bjective is t: ensure that executed client rders are prmptly and accurately recrded and allcated; and carry ut therwise cmparable client rders sequentially and prmptly unless: (i) therwise instructed by the client; (ii) the characteristics f the rder r prevailing market cnditins make this impracticable; r (iii) the interests f the client require therwise. In the case f client limit rders (as defined by MiFID II) in respect f shares admitted t trading n a regulated market r traded n a trading venue which are nt immediately executed under prevailing market cnditins, ICAP will take measures t facilitate the 4 Article 66(6) and (7) f DA2. 5 Article 66(3)(b) and (c) f DA2. 6 Article 66(3)(e) f DA2. 7 Articles 64(1) and 66(3)(a) and (d) f DA2.

6 earliest pssible executin f that rder by making public immediately that client limit rder in a manner which is easily accessible t ther market participants (by submitting the rder fr executin t a regulated market r a MTF r ensuring the rder is published by a data reprting services prvider lcated in an EU member state and can be easily executed as sn as market cnditins allw) unless: express instructins are given by the client nt t publish; r the rder is large in scale cmpared t nrmal market size (as defined by MiFID II). When ICAP accepts an rder frm yu t effect a single transactin r a series f transactins fr the purpse f acquiring r dispsing f all r part f a prtfli r a large basket f securities, it may undertake ther client rders with respect t the cnstituent securities r any related security which culd have an impact n the price f the cnstituent security. If yu are a nn-exempted US client under Sectin 15a-6 f the Securities Exchange Act f 1934, an appinted US Brker Dealer will act in the capacity f US intermediary brkerdealer fr securities transactins. The appinted US Brker Dealer used in each instance will be dependent n the ICAP entity that has undertaken the transactin with yu and will be ntified t yu as necessary. Settlement f Orders Where it is respnsible fr verseeing r arranging the settlement f an executed rder, ICAP will take all reasnable steps t ensure that any client financial instruments r client funds received in settlement f that executed rder are prmptly and crrectly delivered t the accunt f the apprpriate client. Aggregatin and Allcatin ICAP may aggregate yur rders with its wn rders, that f its affiliates and thse f ther clients, in rder t imprve the quality f executin. Whilst ICAP will nly aggregate client rders if it is unlikely the aggregatin will wrk verall t the disadvantage f thse clients whse rders are aggregated, it is pssible that the effect f such aggregatin may wrk t the disadvantage f a client in respect f particular rders. In the unlikely event that ICAP aggregates yur rder with that f anther client, the subsequent executin will be prmptly recrded and allcated fairly. ICAP will nt give preference t ne client ver anther. Misuse f Infrmatin / Cnfidentiality ICAP will take all reasnable steps t prevent the misuse f infrmatin relating t pending client rders by any f its relevant persns. Fr this purpse, ICAP perates barriers which limit the flw f ptentially sensitive infrmatin between clleagues and different areas f the business. ICAP s internal dealing rules prevent emplyees in pssessin f price sensitive infrmatin frm taking advantage f that infrmatin by dealing in that security r arranging fr smene else t d s. Further details in respect f the cnfidentiality prcedures implemented by ICAP are prvided in the TP ICAP Cnflicts f Interest Management Plicy which is available n the ICAP website and which can als be btained by cntacting the client n-barding department n ClientOnbarding@icap.cm.

7 Mnitring and Review ICAP will mnitr the effectiveness f its rder executin and rder handling arrangements as dcumented in this Plicy in rder t identify and, where apprpriate, incrprate any required amendments t this Plicy and any attendant prcedures. ICAP will assess, n a regular basis, whether the executin venues included in this Plicy prvide fr the best pssible result fr its clients r whether ICAP needs t make changes t its executin arrangements. Such assessments will include, but will nt be limited t: reviewing the quality f executin reprts prvided by thse executin venues n which it places a significant reliance against ther executin venues in the market; and when executing rders in OTC prducts, including bespke prducts, checking the fairness f prices prpsed t clients by gathering market data used in the estimatin f the price f such prducts and, where pssible, by cmparing with similar t cmparable prducts. ICAP will review its rder executin arrangements and this Plicy at least annually r whenever a material change ccurs that affects its ability t cntinue t btain the best pssible result fr the executin f client rders n a cnsistent basis using the venues included in this Plicy. 8 ICAP will ntify yu f any material changes t its rder executin arrangements r this Plicy as described abve by psting the infrmatin n ICAP s website. N Fiduciary Relatinship ICAP s cmmitment t prvide yu with best executin des nt mean that it wes yu any fiduciary respnsibilities ver and abve the specific regulatry bligatins placed upn it r as may be therwise cntracted between ICAP and yurself. Yu remain respnsible fr yur wn investment decisins and ICAP will nt be respnsible fr any market trading lss yu suffer as a result f thse decisins. 8 Article 66(1) f DA2.

8 ANNEX 1: FINANCIAL INSTRUMENTS AS DEFINED BY MIFID II 1. Transferable securities 2. Mney-market instruments; 3. Units in cllective investment undertakings; 4. Optins, futures, swaps, frward rate agreements and any ther derivative cntracts relating t securities, currencies, interest rates r yields, emissin allwances r ther derivatives instruments, financial indices r financial measures which may be settled physically r in cash; 5. Optins, futures, swaps, frwards and any ther derivative cntracts relating t cmmdities that must be settled in cash r may be settled in cash at the ptin f ne f the parties ther than by reasn f default r ther terminatin event; 6. Optins, futures, swaps, and any ther derivative cntract relating t cmmdities that can be physically settled prvided that they are traded n a regulated market, a MTF, r an OTF, except fr whlesale energy prducts traded n an OTF that must be physically settled; 7. Optins, futures, swaps, frwards and any ther derivative cntracts relating t cmmdities, that can be physically settled nt therwise mentined in 6 and nt being fr cmmercial purpses, which have the characteristics f ther derivative financial instruments; 8. Derivative instruments fr the transfer f credit risk; 9. Financial cntracts fr differences; 10. Optins, futures, swaps, frward rate agreements and any ther derivative cntracts relating t climatic variables, freight rates r inflatin rates r ther fficial ecnmic statistics that must be settled in cash r may be settled in cash at the ptin f ne f the parties ther than by reasn f a default r ther terminatin event, as well as any ther derivative cntracts relating t assets, rights, bligatins, indices and measures nt therwise mentined in this Sectin, which have the characteristics f ther derivative financial instruments, having regard t whether, inter alia, they are traded n a regulated market, OTF, r an MTF; and 11. Emissin allwances cnsisting f any units recgnised fr cmpliance with the requirements f Directive 2003/87/EC (Emissins Trading Scheme).

9 ANNEX USE OF DISCRETION BY ICAP IN RELATION TO OTF BUSINESS Pursuant t Article 20(6) f MiFID II, executin f rders in an OTF will be carried ut n a discretinary basis by the peratr f the OTF. When carrying n OTF business, ICAP uses a cmbinatin f rder level and executin level discretin; namely: (a) (b) when deciding t place an rder int r retract an rder frm the OTF (Order Level Discretin); and/r when deciding nt t match a specific client rder with ther ppsite rders available n the systems at a given time (Executin Level Discretin). The discretin exercised in respect f OTF business will be cnducted in accrdance with the best executin requirements under MiFID II, when they apply, and as set ut in this Plicy. The OTF supprts varius trading systems 10 thrugh which rders r indicatins f interest (Trading Interests) can be submitted by venue users r brkers n behalf f venue users and where they can interact with ther Trading Interests (as part f the matching and executin prcess). The nature f the discretin exercised will depend n the cmbinatin f trading systems used fr a particular market segment (r sub-segment). In particular, each f the specific trading systems will enable the relevant brker t exercise discretin in different ways. Order Level Discretin Order Level Discretin may be exercised by brkers that sit within the OTF (Executing Brkers). The peratr f the OTF will have exercised Order Level Discretin in respect f Trading Interests whenever they have been placed in the OTF by an Executing Brker r remved frm the OTF by an Executing Brker. The peratr f the OTF may establish parameters fr trading by users f the OTF, which take accunt f the characteristics f the users and the market segment, which may be applied by the systems f the OTF t accept r reject Trading Interests. Trading Interests that are rejected will be reviewed by an Executing Brker r a persn acting under their supervisin. If an Executing Brker determines at any time that a Trading Interest that has already been placed in the OTF (thrugh any f the trading systems) shuld be remved, having regard t any applicable best executin requirements under MiFID II and as set ut in this Plicy, the Executing Brker will have discretin t reject that Trading Interest entirely r t remve the Trading Interest and, where applicable, t send it t anther executin venue. The availability f ther executin venues will vary accrding t the prduct being traded and the extent f external liquidity, as well as any applicable best executin requirements under MiFID II and as set ut in this Plicy. 9 Article 20(8) f MiFID II and ESMA Q&A. 10 E.g. a system fllwing ne r mre f the methdlgies which are described in MiFID II (Annex 1, RTS 2).

10 An Executing Brker may remve a Trading Interest frm the OTF if, fr example, the Executing Brker is aware that the venue user des nt wish t be expsed t particular psitins under certain market cnditins. If such market cnditins ccur, the Executing Brker may remve that venue user s Trading Interests frm the OTF. As anther example, if the speed f executin is a pririty fr a Trading Interest and there is greater liquidity at anther venue available t the Executing Brker, the Executing Brker may remve a venue user s Trading Interest frm the OTF and submit it t that ther executin venue, imprving the likelihd f executin. If an Executing Brker rejects r remves a Trading Interest frm the OTF, then it may be executed in accrdance with any f the methds set ut in this Plicy. Executin Level Discretin Executin Level Discretin may be exercised by Executing Brkers by determining that an rder submitted t the OTF and matched with an ppsing rder in the OTF shuld nt be executed against that ther rder. The Executing Brker will have regard t any applicable best executin requirements under MiFID II and as set ut in this Plicy. The factrs that are relevant are thse derived frm any applicable best executin requirements under MiFID II and as set ut in this Plicy. An example f the exercise f Executin Level Discretin in the OTF may include the determinatin that an rder culd be executed at a better price if it were t be brken int child rders.

11 ANNEX 3 CASH EQUITIES 1. Executin Venues 11 ICAP trades cash equities n the fllwing executin venues: ICAP Executin Venues Third Party Executin r Registratin Venues ICAP WCLK MTF* Athens Stck Exchange Australian Stck Exchange BATS* Brussels Stck Exchange Budapest Stck Exchange Cpenhagen Stck Exchange Eurnext Amsterdam Eurnext Paris Hng Kng Stck Exchange Irish Stck Exchange (Xetra) Istanbul Stck Exchange Jhannesburg Stck Exchange Lisbn Stck Exchange Lndn Stck Exchange Madrid Stck Exchange Milan Stck Exchange NYSE Osl Stck Exchange Prague Stck Exchange Singapre Stck Exchange Stckhlm Stck Exchange Swiss Exchange Tel Aviv Stck Exchange Tky Stck Exchange Trnt Stck Exchange Vienna Stck Exchange (Xetra) Warsaw Stck Exchange Xetra* 11 Article 66(3)(b) f DA2.

12 2. Weighting f Executin Factrs 12 Fr cash equities, the fllwing Executin Factrs are given greater weight in descending imprtance as fllws: Price; Likelihd f executin; Size; nature and characteristics f the rder; and Settlement. Speed and csts f executin are nt majr Executin Factrs fr these prducts. 3. Factrs used t select Executin Venues 13 Fr cash equities, the factrs used t select an executin venue are as fllws: DMA algrithm rules. Where rders are placed in a DMA algrithm, the algrithm will determine n which executin venue t execute the rder, based n the rules f the algrithm. The trading venue where a prduct is listed. Where an rder is placed directly n a third party trading venue, the venue where the prduct is listed will determine the place f executin. Where prducts are dual listed, the executin will take place n the venue with the mst liquidity (which may be a third cuntry trading venue), unless this venue is nt eligible under MiFID II rules. In such situatins, ICAP will execute trades n an EU trading venue r third cuntry trading venue that is eligible under MiFID II rules (which culd result in trades being executed n the venue with the least market liquidity). Fr certain transactins, the nature f the characteristics f the rder may determine that the executin venue is nt the venue with the mst liquidity due t the certainty f executin f multiple rders as a whle being given a higher executin factr. Settlement type. Fr sme cash equity prducts, the settlement type (e.g., cleared / nncleared) will determine the executin venue which can be used. Client instructin. 12 Articles 64(1) and 66(3) (a) and (d) f DA2. 13 Article 66(3)(c) f DA2.

13 4. Executin utside a trading venue 14 ICAP will nt execute cash equity instruments utside f a trading venue (acting as an executin venue r trade registratin venue). 14 Article 66(3)(e) f DA2.

14 ANNEX 4 - EQUITY DERIVATIVES 1. Executin Venues ICAP has access t the fllwing executin venues: ICAP Executin Venues Third Party Executin Venues ICAP WCLK MTF Eurex ICE Futures Eurpe Eurnext Paris Eurnext Amsterdam Brsa Italiana IDEM OMX Stckhlm MEFF. 2. Weighting f Executin Factrs tpsef Fr equity derivatives, the fllwing Executin Factrs are given greater weight in descending imprtance: Price; Time pririty; Likelihd f executin; Speed f executin; and Type f settlement Csts f executin is nt a majr factr fr equity derivatives prducts. Fr rders frm a US persn in equity swaps gverned by SEF regulatin, likelihd f executin will be assigned mre weight as there will be a smaller liquidity pl fr such rders. Fr package transactins where ne cmpnent is a cash equity, the type f settlement (cleared / nn-clearing) f the cash equity cmpnent will be assigned mre weight. 3. Factrs used t select Executin Venues Fr equity derivatives, the factrs used t select an executin venue will be

15 Where the prduct is listed. Where an rder is placed directly n a third party trading venue, the venue where the prduct is listed will determine the place f executin. Where prducts are dual listed, the executin will take place n the venue with the mst liquidity (which may be a third cuntry trading venue), unless this venue is nt eligible under MiFID II rules. In such situatins, ICAP will execute trades n an EU trading venue r third cuntry trading venue that is eligible under MiFID II rules (which culd result in trades being executed n the venue with the least market liquidity). Client instructin 4. Executin utside a trading venue 15 ICAP will nt execute any equity derivative swaps n a multilateral basis utside f a trading venue (acting as an executin venue r trade registratin venue). 15 Article 66(3)(e) f DA2.

16 ANNEX 5 - CREDIT DEFAULT SWAPS (CDS) 1. Executin Venues ICAP has access t and places significant reliance n the fllwing executin venues: ICAP Executin Venues Third Party Executin Venues ICAP Securities OTF N/A 2. Weighting f Executin Factrs Fr CDS, the fllwing Executin Factrs are given greater weight in descending imprtance: Price; Time pririty; Speed; Likelihd f executin; and Cunterparty credit limit. Csts f executin is nt a majr factr fr credit derivatives prducts. 3. Factrs used t select Executin Venues All rders fr CDS prducts will be received nt and executed within the ICAP Securities OTF. Cnsequently, any rder received frm a client fr CDS prducts will be cnsidered a client instructin t execute the trade n this venue. The OTF peratr will handle the rder; n venue selectin will be undertaken by the ICAP investment firm. 4. Executin utside a trading venue 16 ICAP will nt execute any Credit Default Swaps utside f a trading venue (acting as an executin venue r trade registratin venue). 16 Article 66(3)(e) f DA2.

17 ANNEX 6 - EUROBONDS & SECURITISED DEBT PRODUCTS 1. Executin Venues ICAP has access t and places significant reliance n the fllwing executin venues: ICAP Executin Venues Third Party Executin Venues ICAP WCLK MTF ICAP Securities OTF ICAP Trading System (ATS) N/A 2. Weighting f Executin Factrs Fr Eurbnds and securitised debt prducts, the fllwing Executin Factrs are given greater weight in descending imprtance: Price; Time pririty; Speed; Likelihd f executin; and Cunterparty credit limit. Occasinally, the weighting r price f a gvernment bnd risk hedge, r a nn-standard settlement date can result in likelihd f executin being assigned mre weight as an Executin Factr. Cst f executin is nt a majr factr fr Eurbnds and securitised debt prducts. 3. Factrs used t select Executin Venues Fr Eurbnds and Securitised Debt Prducts the fllwing factrs t select an executin venue will be as fllws: Client instructin Orders in Eurbnds and Securitised Debt Prducts will either be received directly int the ICAP Securities OTF (and cnsequently arranged and executed by the ICAP Securities OTF peratr), received directly int the ICAP WCLK MTF, r received by ICAP as investment firm fr the purpses f a transactin being registered nt the ICAP WCLK MTF. Type f cntract traded

18 Nt all prducts will be listed and available t trade n all venues. Fr example, sme US crprate debt prducts are nly available t trade n the ICAP Trading System (ATS). 4. Executin utside a trading venue 17 ICAP will nt execute Eurbnds r securitised debt instruments utside f a trading venue (acting as an executin venue r trade registratin venue). 17 Article 66(3)(e) f DA2.

19 ANNEX 7 - COMMODITIES 1. Executin Venues ICAP has access t and places significant reliance n the fllwing executin venues: ICAP Executin Venues Third Party Executin Venues ICAP Energy OTF Chicag Mercantile Exchange (CME) Eurnext Cmmdities (MATIF) Eurpean Energy Exchange (EEX) ICE ICE Endex Baltex Pegas NASDAQ Spanish Futures & Optins Exchange (MEFF) Singapre Exchange (SGX) 2. Weighting f Executin Factrs Fr Cmmdities, the type f trading capacity will determine the relative imprtance f the Executin Factrs. The type f trading activity can be split in the cmmdity markets int trade registratin and name give-up (NGU) business. Fr trade registratin markets, the Executin Factrs will typically be weighted in the fllwing rder f descending imprtance: Price, Likelihd f executin; Size; Speed f executin Althugh executin factrs specific t the client r rder may take precedence and change the relative imprtance f the general Executin Factrs. Fr registered trades, credit wrthiness f cunterparties, settlement and cst f executin will nt be relevant Executin Factrs.

20 Fr NGU markets, the Executin Factrs will typically be weighted in the fllwing rder f descending imprtance: Price; Credit wrthiness f client and their ability t trade with ther cunterparties; Likelihd f executin; Size Speed f Executin Althugh factrs specific t the client r rder may take precedence and change the relative imprtance f the general Executin Factrs. Fr NGU markets, cst f executin and settlement f trades will nt be relevant Executin Factrs. 3. Factrs used t select Executin Venues Fr Cmmdities, the factrs used t select an executin venue are as fllws: Type f Cmmdity cntract traded Certain cmmdity cntracts nly clear at certain venues. In such circumstances, the executin venue will be prescribed; ICAP will nt select the executin venue. This will be particularly prevalent fr trade registratin business. Client instructin / ability t trade n executin venues Fr trade registratin business, ICAP is nly able t register trades nt venues t which the client(s) have the ability t trade. Fr NGU business, all activity in MiFID II financial instruments relating t cmmdities will be carried ut n the ICAP Energy OTF. 4. Executin utside a trading venue Whilst transactins in cmmdities are predminantly executed n a trading venue, spt and sme physically-settled instruments (nt classified as financial instruments under MiFID II) will be executed ff venue Article 66(3)(e) f DA2.

21 ANNEX 8 MONEY MARKETS (MM), FX AND LOCAL MARKET INTEREST RATE SWAP PRODUCTS 1. Executin Venues ICAP has access t and places significant reliance n the fllwing executin venues: ICAP Executin Venues Third Party Executin Venues ICAP WCLK MTF tpsef iswap MTF ICAP Securities OTF 2. Weighting f Executin Factrs The asset classes within MM & FX will determine the relative imprtance f the Executin Factrs, as fllws: Fr G10 FX prducts, the Executin Factrs will likely be weighted in the fllwing descending rder f imprtance: Price; Likelihd f executin; Credit wrthiness; Limits available between cunterparties; Size and preferred executin style (i.e. size request); and Csts f executin. Fr rders which are large in size, likelihd f executin will be assigned mre weight. Fr emerging markets (EM) FX, nn-deliverable frwards (NDFs) and Lcal Market interest rate swap (IRS) prducts, price, likelihd f executin and client credit wrthiness will be weighted mre equally than fr G10 FX prducts. Fr MM prducts, the Executin Factrs will likely be weighted in the fllwing descending rder f imprtance: Price and likelihd f executin are f equal imprtance (likelihd f executin will be given greater weight fr NGU business);

22 Client s preferred executin style (i.e., matched principal r name give-up); Credit wrthiness f client(s); Size; Speed; and Csts f executin. Fr EM Bnds, the Executin Factrs will be the same as fr EM FX prducts. Hwever client bilateral credit limits (client credit wrthiness) will nt be an Executin Factr as all EM bnds are traded n a matched principal basis. 3. Factrs used t select Executin Venues The factrs used t select an executin venue are as fllws: Type f prduct traded Nt all prducts will be listed and available t trade n all venues. Fr example, Interest Rate Swaps can nly be traded electrnically n the iswap MTF. Client permissins/ability t trade Trades will nly be able t be executed n venues where the client r ICAP is permissined t trade. This factr is prevalent fr trades which are required t be executed n a SEF platfrm. Client Instructin 4. Executin utside a trading venue 19 Save as prvided belw, ICAP will nt execute any trades in Lcal Market Interest Rate Swaps, Mney Market and FX prducts utside f a trading venue (acting as an executin venue r trade registratin venue). ICAP brkers (including Executing Brkers) have access t liquidity n a glbal basis. If a Trading Interest is matched and executed against an ppsite Trading Interest in a third cuntry that des nt require the executin t take place n a regulated trading venue, and the rules t which the ICAP brker is subject d nt require that all transactins invlving the relevant financial instrument are executed n a regulated trading venue (e.g., the MiFID II trading bligatin), then the ICAP brker may interact with a cunterparty r intermediary in that third cuntry t execute the trade, subject t any restrictins r limitatins under applicable law. 19 Article 66(3)(e) f DA2.

23 ANNEX 9 - G10 INTEREST RATE DERIVATIVES, UK GILTS AND SCANDI GOVERNMENT BONDS 1. Executin Venues ICAP has access t and places significant reliance n the fllwing executin venues: ICAP Executin Venues Third Party Executin Venues iswap MTF ICE IGDL SEF EUREX ICAP WCLK MTF Nasdaq OMX Nrdic ICAP Securities OTF 2. Weighting f Executin Factrs The asset classes within these financial instruments will determine the relevant imprtance f the Executin Factrs, as fllws: Fr G10 IRS, inflatin prducts, ptins and crss-currency swaps, the fllwing Executin Factrs are given greater weight in descending imprtance: Maturity, directin (buy/sell), price and size f rder; Speed and time f executin; Likelihd f executin; Fr rders which are large in size and rders frm a US persn gverned by SEF regulatin, likelihd f executin will be assigned mre weight. Fr UK Gilts and Scandinavian Gvernment Bnds, the fllwing Executin Factrs are given greater weight in descending imprtance: Price; Time pririty; Speed; Likelihd f executin; and Cunterparty credit limit. 3. Factrs used t select Executin Venues Fr G10 IRS, the factrs used t select an executin venue are as fllws: Type f prduct traded

24 Nt all prducts will be listed and available t trade n all venues. Client permissins/ability t trade Trades will nly be able t be executed by n venues where the client r ICAP is permissined t trade. This factr is prevalent fr trades which are required t be executed n a SEF platfrm. Client Instructin 4. Executin utside a trading venue 20 ICAP will nt execute any G10 Interest Rate Derivatives, UK Gilts r Scandi Gvernment Bnds utside f a trading venue (acting as an executin venue r trade registratin venue). 20 Article 66(3)(e) f DA2.