Order Execution Policy

Transcription

1 Order Executin Plicy ( SSBTC,LB ) prvides trading services in securities lending and freign exchange derivatives within State Street Glbal Markets, a divisin f State Street Crpratin, ne f the wrld s leading prviders f financial services t institutinal investrs. When executing r transmitting yur rder(s) we take all reasnable steps t prvide yu with the best pssible result n a cnsistent basis by taking int accunt any specific instructins 1 we receive frm yu and a range f executin factrs in accrdance with the principles described in this Order Executin Plicy ( Plicy ). 1. Scpe Our bligatin t cnsistently prvide yu with the best pssible result in accrdance with this Plicy applies in respect f any rder yu may give us in any financial instrument as defined by the Markets in Financial Instruments Directive ( MiFID ), regardless f whether the executin takes place n a venue in the Eurpean Ecnmic Area, an equivalent venue in a third cuntry r n an ver-the-cunter basis. This Plicy nly applies where we have categrised yu as a Prfessinal client and we yu a cntractual r agency bligatin. The duty t prvide best executin des nt apply t transactins invlving Eligible cunterparties and therefre where we have categrised as such in respect f such business this Plicy will nt apply; specific transactins and services are identified in sectin 6 belw. SSBTC,LB des nt deal with Retail clients. Please nte that this Plicy des nt apply t services ffered utside f the State Street Glbal Markets divisin unless therwise stated. 1 See Sectin 4 belw. Page 1

2 2. Executin factrs When executing and/r transmitting yur rders we will take int accunt different executin factrs including, but nt limited t: Price; Csts; Speed; Likelihd f executin; Likelihd and reliability f settlement; Size; Nature f an rder; and Other relevant cnsideratins, such as: Liquidity (relative rder size r financial instruments underlying liquidity); Market Impact; Nature f the available executin venue (regulated versus unregulated market venue);and Nature f the financial instrument. Our traders use their experience and judgment t determine the imprtance f each f these factrs n a case by case basis t assist in achieving f the best pssible result n a cnsistent basis in respect f yur rders. 3. Executin criteria In determining the relative imprtance f the executin factrs, when we are executing and/r transmitting rders n yur behalf, we will take int accunt the fllwing executin criteria: The extent t which we believe yu are relying upn us t prvide yu with the best pssible result; The characteristics f yur rder(s); The characteristics f the financial instrument; The characteristics f the available executin venues; and If yur rder is subject t any specific instructins that yu have given us. Page 2

3 4. Specific client instructins Whenever yu have given us a specific instructin regarding an rder r an aspect f an rder, we will execute r transmit such rder r aspect theref fllwing yur specific instructin. We will then apply this Plicy and take reasnable steps t btain the best pssible result fr the elements f the rder nt subject t r limited by yur instructins. In the event that we feel that yur instructins may have becme unduly limiting t the executin f yur rder, such as where market cnditins have changed, we wuld aim t discuss this with yu and agree a suitable curse f actin. 5. Relative imprtance f the executin factrs While price is generally a key factr, the verall value t a client f a particular transactin may be affected by the ther factrs listed abve. The relative imprtance f each f the factrs will differ depending n: The characteristics f yur rder; The characteristics f the financial instruments t which the rder relates, as certain instruments are easier t execute than thers; The characteristics f the executin venue(s) t which we are able t direct and execute yur rder and the cnditins fr safe settlement assciated with thse venues; and, Cnsideratin f ptential market impact, taking int accunt any instructins yu might give us n participatin levels and having analysed the liquidity and relative size f the rder. 6. Asset-class specific arrangements a. Securities lending transactins i. Agency Lending Prgram SSBTC,LB typically executes yur agency lending rders n an ver-the-cunter basis acting as yur agent against ne f a panel f brrwers which yu have apprved. Where apprpriate t the transactin it may be necessary fr SSBTC trading desk(s) in ther jurisdictins t handle yur rder(s) fr the purpse f bringing abut transactins with cunterparties that SSBTC LB des nt have direct access t. Additinally, Page 3

4 where liquidity fr a particular security permits we may als execute yur rders n a relevant trading venue specialising in securities lending transactins 2. The majrity f lending transactins arise frm a specific request t brrw securities frm ne r mre apprved brrwers t SSBTC,LB. These requests are matched against the securities available in yur lending prgram. When determining whether r nt t enter int a ptential lending transactin ur traders will first refer t the terms f yur lending prgram and any specific instructins yu may have given befre using their wn discretin and prfessinal experience t assess the relevant executin factrs in rder t assist them in achieving the best pssible result. Typically this will invlve a priritisatin f the price and cst factrs ver factrs such as size because ur traders will lk t maximise the ptential return n capital f the lending transactin. Finally, while the nature f the securities lending business means that the majrity f yur rders will be executed n an ver-the-cunter basis as described abve, we may expse yur rder t ne f the small selectin f trading venues specializing in securities lending transactins f which we are members r have direct access arrangements. Any decisin t execute yur rder n a trading venue will be determined in a similar manner t that described abve but with particular cnsideratin f the market demand f the specific security yu have made available in yur lending prgram and yur securities lending directive. ii. Enhanced custdy prgram SSBTC,LB enters int all securities lending transactins as part f its Enhanced Custdy Prgram with yu as a principal t the trade and n the basis that yu are an Eligible cunterparty. All such business is deemed by us t be Eligible cunterparty business and therefre nt subject t the Plicy. b. Freign Exchange i. Principal FX Our Principal FX services cmprise f the Direct FX and Indirect FX services and they are intended fr Investment Managers wh wish t negtiate and trade directly with State Street r whse assets are under custdy at State Street and want t manage their FX requirements with State Street, typically based n standing instructins. In bth services, State Street acts as yur cunterparty and deals as principal t the trade and trades are typically executed n an ver-the-cunter ( OTC ) basis. 2 See Appendix 1 belw fr details f SSBTC,LB s executin venues. Page 4

5 Direct FX SSBTC,LB executes all f yur Direct FX rders in freign exchange derivatives n an ver-the-cunter basis acting as a principal t the trade fllwing a request frm yu fr pricing ( RFP ) r request fr qute ( RFQ ). Upn receiving an RFP r RFQ frm yu and where yu are bth a Prfessinal client and we reasnably believe that yu are relying upn us t prvide the best pssible result r yu have made us aware at the utset that yu are relying upn us t this effect, ur Sales Traders will seek a price frm ne f ur Traders by prviding them with relevant infrmatin abut yur rder (i.e. type f cntract, currency pair, ntinal and maturity). The price prvided by the Trader will be based upn their assessment f the market in that currency pair at the time and cnsideratins arund SSBTC,LB s market and cunterparty risk. The Sales Trader will give yu the pprtunity t accept r reject the price ffered and may prvide cmmentary as t the wider market in rder t supprt the value prpsitin f price ffered t yu taking int accunt yur rder, hwever precise details f pricing remain prprietary t SSBTC,LB in rder t permit us t manage ur market risk. Finally, in respect f any rders in freign exchange which d nt cnstitute a financial instrument (i.e. spt cntracts and certain frward cntracts), the bligatin fr best executin under MiFID des nt apply and therefre this Plicy will nt be applicable. Indirect FX SSBTC,LB s Indirect FX 3 service which is made available t State Street s custdy clients. Such services are typically linked t security settlement and dividend and interest incme repatriatin and almst exclusively invlve deliverable cntracts executed in accrdance with yur standing instructins r n the basis f individual trade advices. Cnsequently, while certain frward cntracts may be executed frm time-t-time by SSBTC,LB under this service, such cntracts will nt cnstitute a financial instrument fr the purpses f MiFID and this Plicy and therefre the bligatin fr best executin under MiFID des nt apply. State Street may hwever we a separate, cntractual bligatin and yur shuld refer t yur cntractual agreements with us and The Client Guide made available t all custdy clients. 3 Indirect FX is nly made available t investment managers acting behalf f and fr the benefit f institutinal investr clients whse assets are under custdy with State Street. Page 5

6 ii. Agency FX Our Agency FX services cmprise f an utsurced directed FX trading slutin and ur TruCrss/FX executin platfrm. In bth cases, State Street acts as yur agent and des nt trade as principal t the trade, and such trades are typically executed n an ver-the-cunter (OTC) basis. Agency FX rders SSBTC,LB executes all f yur Agency FX rders in freign exchange derivatives n an ver-the-cunter ( OTC ) basis acting as yur agent t arrange a trade with ne r mre apprved cunterparties based upn yur trade requirements. Upn receipt f an rder frm yu in respect f a cntract which cnstitutes a financial instrument under MiFID, SSBTC,LB s traders will aim t btain a range f prices and qutes frm a selectin available dealers, subject t any specific instructins yu might have given r the existence f any credit related restrictins and minimum cunterparty trading vlumes. Our traders will d this either directly with the individual dealers r thrugh ne f a number f multi-dealer electrnic trading platfrms available t us (e.g. Currenex 4, EBS, Thmpsn Reuters) after taking int accunt bth the nature f yur rder (i.e. type f cntract, currency pair, ntinal and maturity) and current market prices and/r any selected benchmarks. Fllwing an assessment f the available prices frm the selected dealers, ur traders will seek t execute ne r mre OTC trades n yur behalf with the selected cunterparties in rder t cmplete yur rder in a timely manner and at a price that is as clse t current market prices, r yur selected benchmark, as pssible. Finally, in respect f any rders in freign exchange which d nt cnstitute a financial instrument (i.e. spt cntracts and certain frward cntracts), whilst the bligatin fr best executin f rders under MiFID des nt apply, we will seek t apply the principles f this Plicy as we believe this serves yur general best interests. TruCrss/FX rders TruCrss/FX is an FX spt benchmark prduct, which allws clients t submit rders in spt FX cntracts ahead f a fixing time and receive the WM mid-rate net f standardised fees. TruCrss/FX des nt invlve freign exchange cntracts that cnstitute financial instruments fr the purpses f MiFID; therefre, the bligatin fr best executin f rders under MiFID des nt generally apply. State Street may hwever we a separate, cntractual bligatin and yu shuld refer t yur cntractual agreements with us. 4 Currenex is affiliated with SSBTC,LB and ffered in EMEA by State Street Glbal Markets Internatinal Limited Page 6

7 7. Other imprtant matters a. Use f third-parties and affiliates In rder t gain access t certain markets where we d nt have a membership r ther direct access arrangements, we may need t transmit yur rder t an affiliated r third party firm fr executin n ur behalf. We will exercise ur judgment, skill and experience t determine the apprpriateness and suitability f the relevant affiliate r third party firm. The chice f third-party and affiliate firms will be determined by an nging assessment f their ability t supprt ur best executin bligatins t yu and a cmbinatin f the fllwing cnsideratins which will depend n the market we aim t access: Executin capabilities and range f accessible venues in target markets; Range f electrnic executin and rder handling capabilities; Credit ratings and quality f settlement arrangements; Status f the third-party r affiliate as: an fficial market maker r ther market specialist; and/r a knwn specialist in the market, sectr r instrument. Client rders executed using such arrangements are subject t mnitring and review 5 in rder t assess bth the utcme f the rder against the Plicy and the verall perfrmance f the third-party r affiliate firm. b. Executin f rders utside a regulated market r MTF Frm time-t-time we may determine that it is beneficial t yur rder t execute all r part f it utside f a regulated market r MTF. Prvided that the financial instrument t which yur rder relates can be traded utside f such venues, and prvided that yu have given us yur express prir cnsent, which is btained during the nbarding prcess and peridically renewed thereafter; when we believe that it is cnsistent with this Plicy and in yur best interests t d s we will execute yur rders utside f regulated markets and MTF. c. Order aggregatin and allcatin When executing and/r transmitting yur rders we may cmbine yur rders with thse f ther clients f SSBTC,LB, which may include affiliated cmpanies. We will nly d this where we reasnably believe that it 5 Please refer t sectin 8. Page 7

8 is in the verall best interest f each client. In the limited circumstances where SSBTC,LB r an affiliate may need t trade n its wn accunt, such as when trading ut f errrs assciated with client rders, we wuld nt cmbine yur rders with thse rders. 8. Mnitring and versight SSBTC,LB clsely mnitrs the effectiveness and perfrmance f its executin arrangements and delivery f best executin t its clients in respect f this Plicy. The relevant trading desks perfrm regular mnitring using a variety f methds t assess perfrmance pre-trade, during trading and pst-trade, and this includes the use f apprpriate third-party analytics. In additin t frnt-ffice mnitring, the cmpliance department cnducts regular independent mnitring and challenges findings and utcmes when required thrugh the curse f their prgram. Oversight f best executin matters is prvided under the auspices f the SSBTC,LB Gvernance Cmmittee which receives regular reprts n the perfrmance and effectiveness f SSBTC,LB s rder executin arrangements and its bligatins under this Plicy frm bth the relevant trading desks and cmpliance. 9. Prcedural arrangements This Plicy and ur rder executin arrangements are reviewed at least annually by the relevant trading desks, cmpliance and senir management, but may be updated mre frequently when required, such as where we identify a material change which may affect ur ability t deliver best executin n a cnsistent basis. In the event that any material changes are made t this Plicy r t ur executin arrangements we will ntify yu accrdingly. Finally, yu may request that we demnstrate adherence t this Plicy in respect f any rder(s) we execute n yur behalf. Such requests shuld be made in writing and directed t: Head f SSGM EMEA Cmpliance 20 Churchill Place Canary Wharf Lndn E14 5HJ United Kingdm Effective date: December 2016 Page 8

9 Legal and regulatry ntices and disclaimer State Street Glbal Markets is the marketing name and a registered trademark f State Street Crpratin used fr its financial markets business and that f its affiliates (cllectively State Street ). The prducts and services utlined herein are nly ffered t Eligible cunterparties and Prfessinal clients thrugh either: (i) State Street Bank and Trust Cmpany, Lndn Branch, authrised and regulated by Federal Reserve Bard, authrised and subject t limited regulatin by the Prudential Regulatin Authrity and subject t regulatin by the Financial Cnduct Authrity; (ii) State Street Eurpe Limited, authrised and regulated by the Financial Cnduct Authrity; (iii) State Street Glbal Markets Internatinal Limited, authrised and regulated by the Financial Cnduct Authrity and/r (iv) State Street Bank and Trust Cmpany, Lndn Branch, authrised by Deutsche Bundesbank and the German Financial Supervisry Authrity and subject t limited regulatin by the Financial Cnduct Authrity and Prudential Regulatin Authrity. Details abut the extent f ur regulatin by the Financial Cnduct Authrity and Prudential Regulatin Authrity are available frm us n request. Please nte certain freign exchange transactins (spt and certain frward transactins) are nt regulated in all jurisdictins. This dcument and infrmatin prvided herein is fr marketing and/r infrmatinal purpses nly, it des nt take int accunt any client's particular investment r ther financial bjectives r strategies nr any client s legal, regulatry, tax r accunting status, nr des it purprt t be cmprehensive nr intended t replace the exercise f a client s wn careful independent review regarding any crrespnding investment r ther financial decisin. This dcument and infrmatin prvided herein des nt cnstitute investment, legal, regulatry, tax r accunting advice and is nt a slicitatin t buy r sell securities nr t enter int any transactin, nr is it intended t cnstitute any binding cntractual arrangement r cmmitment by State Street t prvide securities services nr any ther financial services. Any infrmatin prvided has been btained frm surces believed t be reliable at the time f publicatin, nnetheless, we cannt guarantee nr d we make any representatin r warranty as t their accuracy and yu shuld nt place any reliance n such infrmatin. This dcument and any cmments and statements made herein d nt necessarily reflect thse f State Street, its subsidiaries r its affiliates. State Street hereby disclaims all liability, whether arising in cntract, trt r therwise, fr any lsses, liabilities, damages, expenses r csts arising, either direct r cnsequential, frm r in cnnectin with the use f r any reliance place upn any infrmatin prvided. Prspects, clients r cunterparties shuld be aware f the risks f participating in trading equities, fixed incme, and freign exchange instruments, derivative instruments and/r in investments in illiquid r emerging markets. Derivatives generally invlve leverage and are therefre mre vlatile than their underlying cash investments. Prspects, clients r cunterparties shuld be aware that prducts and services utlined may put their capital at risk. Further, past perfrmance is n guarantee f future results and, where applicable, returns may increase r decrease as a result f currency fluctuatins. This dcument and infrmatin prvided herein is nt intended fr retail clients, nr fr distributin t, and may nt be relied upn by, any persn r entity in any jurisdictin r cuntry where such distributin r use wuld be cntrary t applicable law r regulatin. The cmmunicatin and infrmatin r any prtin theref may nt be reprinted, sld r redistributed withut the prir written cnsent f State Street Glbal Markets 2016 State Street Crpratin - All Rights Reserved. Page 9

10 Appendix I Executin Venues The fllwing list sets ut the varius arrangements ( SSBTC,LB ) may use in each in market and asset-class t execute yur rders. The precise venues and arrangements will be selected in accrdance with SSBTC,LB s Order Executin Plicy, subject t any preferences yu may indicate and specific jurisdictinal requirements. References t direct access include venues where SSBTC,LB is either a member/participant r has direct market access, r similar electrnic arrangements, thrugh a third-party that is itself a member. This list may change frm time t time, please cnsult yur SSBTC,LB representative fr details f ur mst current capabilities and t discuss yur executin requirements further. 1. Eurpean venues United Kingdm EBS Brkertec Eurpe Equilend Eurpe Thmsn Reuters Matching MTF Direct Access Third-party brker All executin venues listed are available thrugh State Street Bank and Trust Cmpany, Lndn branch as f December Venues are subject t peridic review and change State Street Crpratin - All Rights Reserved Page A1-1