RULES FOR EXECUTION OF ORDERS

Transcription

1 RULES FOR EXECUTION OF ORDERS Valid and effective from 1 March 2016 Citibank Europe plc, organizační složka PRAGUE CZECH REPUBLIC Citibank Europe plc, a company established and existing under the laws of Ireland, with its registered office at North Wall Quay 1, Dublin, Ireland, registered in the Company Register in the Irish Republic under No , conducting business in the Czech Republic through Citibank Europe plc, organizační složka, with its registered office at Bucharova 2641/14, Prague 5, Stodůlky, postal code , ID No , incorporated in the Commercial Register administered by the Municipal Court in Prague, Section A, File Member of Citigroup. The supervisory authority of Citibank Europe plc is the Central Bank of Ireland.

2 These Rules for Execution of Order ("the Rules") set out the general rules under which Citibank Europe plc, conducting its business in the Czech Republic through Citibank Europe plc, organizační složka, registered office at Praha 5, Stodůlky, Bucharova 2641/14, Postal Code , Company ID No , incorporated in the Commercial Register of the Municipal Court in Praha, Section A, Insert ("the Bank") accepts and executes the customers orders under the best terms, in accordance with the applicable legal regulations governing the capital market, particularly Act No. 256/2004 Coll., on Undertaking on the Capital Market, as amended (the "Legal Regulations") and the Bank's internal regulations. I. SUBJECT AND PURPOSE OF THE RULES The purpose of the Rules is to generally describe and familiarize the customers with the rules and procedures under which the Bank, in relation to the investment instruments, shall accept the customers orders and execute the same under the best terms (if such execution is required by the applicable Legal Regulations), but always taking into account the relevant criteria and conditions arising from the Rules and Legal Regulations. In the course of the aforementioned operations, the Bank shall proceed in a qualified, honest and businesslike manner, in the best interest of its customers. The Rules are applied in cases where the Bank receives and transmits the customers orders concerning the investment instruments (e.g. procurement of purchase or sale of the investment instruments), or executes the orders concerning the investment instruments on account of its client (hereinafter referred to as "the Client"), under the following conditions. The Rules also set out certain conditions for processing the Client s orders. II. ACCEPTING ORDERS Unless otherwise stipulated in the Agreement between the Bank and the Client, the orders may be delivered to the Bank via the following distribution channels: in writing by delivery of the order to the appropriate mailing address of the Bank as specified in the Agreement; by telephone to the relevant numbers set out in the Agreement; and/or in another manner stipulated in the Agreement; The Bank is entitled to require a certain type of order to be provided on a specific form, in such a case, the Client shall be obliged to submit written order using the relevant form. In addition, the Bank is entitled to stipulate that certain orders may only be given in a particular mode of communication (e.g. in writing at the Establishment) or that a specific Agreement must be concluded with respect to the provision of particular investment service or the product to the Client. The order must include all the particulars required by the Bank. The order is binding upon its proper acceptance by the Bank. Unless otherwise stipulated in the Agreement to be processed on the same Business Day as received, the order shall be received no later than: For written orders, 10:00 CET of the relevant Business Day; For the orders submitted via phone, by 17:00 CET on the relevant Business Day. The Bank verifies the identity of the Client upon submission of the orders in a manner prescribed by the applicable legal regulations or as agreed with the Client. If a person acts on behalf of the Client by virtue of the power of attorney granted by the Client for representation of the Client vis-à-vis the RULES FOR EXECUTION OF ORDERS Page 2

3 Bank, the Bank may require submission of the original or certified copy of such a power of attorney in the form and with the content acceptable to the Bank, bearing the certified signatures of the Client. If the Client fails to ensure sufficient funds or investment instruments, in an agreed manner, to execute the order and/or the order does not include the required particulars, the Bank shall be entitled not to execute such an order and shall not bear responsibility for consequences of such nonexecution for the Client. If necessary for execution of the order and settlement of the business transaction concluded on the basis of the order, the Bank is entitled to convert the funds transferred during settlement of the relevant business transaction, using the appropriate exchange rates as published by the Bank and valid at the time of the conversion. The Client is obliged to reimburse the Bank for the costs related to such conversion. During the processing of the order, the Client may obtain information about the current status of the order. by telephone to the relevant numbers set out in the Agreement; and/or in another manner stipulated in the Agreement; In accordance with the applicable legal regulations, the Bank shall provide the Client with information about the executed order in writing and/or via the electronic communication (if agreed with the Client), usually on the business day following the execution of the order, or the business day following the delivery of the confirmation to the Bank if such information can only be notified to the Client subject to a third party s confirmation (where relevant). The Bank shall immediately inform the Client of a failed or delayed execution of the order and the reasons thereof, specifically in the form of a notification provided via electronic message sent to the Client s address and/or otherwise as agreed between the Client and the Bank. III. ACHIEVING THE BEST TERMS The Bank executes the orders on best terms and in a manner defined in these Rules; these Rules are to ensure the achievement of the best possible results for the Client within the specific investment service (while taking account of all relevant factors, primarily the categorization of the Client, nature of the specific customer s order, characteristics and features of the investment instrument which is the subject-matter of the relevant order, as well as the nature of the transfer venues which the order may be directed to), all of which should be achieved on a permanent or regular basis. Acting in accordance with the Rules should bring the best possible results with regard to all orders concerning any investment instrument that the Bank may execute for the Clients; The Bank is required to operate in accordance with the Rules and continuously review and evaluate how effective the Rules are and, if necessary, amend the terms of the Rules to ensure the best possible results for the Client during execution of the orders. Executing the orders on the best terms shall mean that such orders shall be executed in compliance with the Legal Regulations and the Rules. Achieving the best possible result in the meaning of the Rules, however, does not necessarily mean that this result must be achieved in relation to every single order or that it would not be possible to obtain a better price or different terms, in respect to a particular order, under certain circumstances. The Bank shall primarily take into account of the following factors while ensuring the best possible results: price which can be attained at the relevant transfer venue, costs (including fees and charges), RULES FOR EXECUTION OF ORDERS Page 3

4 promptness of order execution, likelihood of executing the order (liquidity), volume of requested transaction, conditions for settlement, nature and type of the order, type and characteristics of the investment instrument which the order pertains to, characteristics of possible point of transfer, other relevant factors for executing the Client s order on the best possible terms. The relative importance of the factors above shall be assessed by the Bank as part of the Bank s regular business terms and practices or experience in the light of available information and the conditions on the relevant market; these shall be further considered while taking the following criteria into account: the nature of the Client s order; the nature and characteristics of the investment instrument the Client s order concerns; the nature of the transfer venue to which the Client s order can be directed. In the case of an order from a non-professional Client, the execution of the order on the best possible terms shall be determined on the basis of the overall performance consisting of the price of the investment instrument and the costs associated with executing the order; such costs shall include any expenses of the Client in direct relation to executing the order, any fees to transfer venue, settlement charges and any other fees payable to third parties with participation in the execution of the order. In some cases third parties may execute the order and/or intermediate the execution thereof; these third parties are usually other Citibank group companies, i.e. company Citigroup Inc. and any entity controlled directly or indirectly by Citigroup Inc. (hereinafter the Citibank Group ) or other providers of the given investment service or activity (such as broker). In these instances the Bank shall ensure that (i) this third party proceeds in accordance with the Rules or other rules for executing order on the best terms that the Bank regards as reasonably acceptable and/or (ii) this third party is judged and designated by the Bank as the entity to execute the relevant order on the best possible terms. If the Bank employs third parties to execute the orders, the most sought after third parties shall be Citibank N.A., London Branch and Citigroup Global Markets Limited. IV. SPECIAL INSTRUCTION If the Bank receives special instruction from the Client with respect to the execution of the given order, it shall follow such an instruction. This, however, can prevent the Bank from executing the order under the Rules and in such a case, the Bank shall not be held liable for acting according to the Rules, though only to the extent to which the Bank accepts and follows the relevant instruction of the Client. This means that these Rules will apply to the particular order only with respect to appropriate factors (as described above in Section III herein) only to the extent that they are not affected by the special instruction of the Client. Examples: If the Client, through his/her special instruction, determines a specific transfer venue where the order is to be executed, the Bank will not be responsible for selection of such a venue for the execution of the order under the Rules and shall execute the order at the transfer venue designated by the Client (if the execution is practicable at such a venue) If the Client, through his/her special instruction, determines a specific time or deadline for execution of the order, the Bank shall execute the order within such time or towards such a deadline under the best terms which are available at the relevant time, but will not be RULES FOR EXECUTION OF ORDERS Page 4

5 responsible for the timing of the execution or other impacts on the price and other factors affected by the special instruction. V. SELECTING THE TRANSFER VENUE The transfer venue, in the scope of these Rules, means a venue for execution of the order (regulated market, multilateral trading facility, systematic internalizer, market maker or other liquidity provider or any person performing similar activities). Unless otherwise agreed with the Client, the Bank shall direct appropriate orders from the Client to the relevant transfer venues. In general, the transfer venues mean the relevant regulated markets (including the primary markets of particular investment instruments) in the relevant country or relevant multilateral trading facility, or the liquidity providers concerning the investment instrument (including the investment company, or a relevant person involved authorized by the collective investment fund to the specific activity), OTC or other relevant market with relevant liquidity and conditions. Details concerning the specific transfer venues in relation to the relevant investment instrument will be communicated to the Client at his/her request. The Bank is a member of Centrální depozitář cenných papírů, a.s. (hereinafter "CDCP") central securities depository - and all transactions in domestic book-entry securities are settled through CDCP, unless otherwise stated hereinbelow. The Bank is also a direct participant in the Short-term Bonds System run by the Czech National Bank (hereinafter "SBS") and all transactions with domestic government short-term bonds are settled in accordance with the rules of SBS. The Bank shall settle all transactions with domestic collective investment book-entry securities through applicable investment fund managers, i.e. by applicable entry in the applicable asset account in the independent registry of investment instruments (domestic collective investment book-entry securities) and, if applicable, in the registry linked to independent registry of investment instruments. The Bank settles the executed transactions made with the foreign securities through the Clearstream system operated by Deutsche Börse AG. Detailed information on the method of settlement in particular systems depends on the type of investment instrument being settled. At the Client's request for information on how his/her investment instrument is settled, the Bank will provide the Client with detailed information (e.g. about the moment of the settlement finality, etc.). If a Client s order is to be executed on a particular regulated market or in a multilateral trading facility, this order shall be executed by a Citibank Group company or any other person that is a duly authorized provider of the respective investment service or activity (e.g. broker) a that is a member of the regulated market or the multilateral trading facility. This is without prejudice to the obligations of the Bank in executing orders through third parties (as described in Part III of these Rules). The following is a list of criteria that influence the choice of the transfer venue for a given order from the Client with respect to individual investment instruments: generally available prices level of liquidity relative volatility on the market promptness of execution costs of execution creditworthiness of local counterparties or that of the central counterparty (if relevant) quality and costs of settlement. On some markets price volatility may mean that the time factor is of paramount importance, while on other markets with low liquidity the very fact of executing an order may satisfy the requirement of executing under the best terms. In other cases the choice of where an order should be executed may RULES FOR EXECUTION OF ORDERS Page 5

6 be limited significantly as a result of the nature of the order, the type of investment instrument or the Client s special instruction. For instance, if the given investment instruments are of a lower liquidity, there are just limited number of venues, or even a single venue only, where the order can be executed. In some cases in which the Bank may have available several comparable venues for orders to be executed, the Bank may only take into account its own commission and the costs of executing the order at each transfer venues for the purpose of choosing transfer venue according to these Rules and assessing outcomes for the Client that would be achieved by execution of the order at each of the transfer venues. The Bank shall regularly, on an annual basis at minimum, assess and compare the transfer venues for order execution used by the Bank for the purposes as stated in these Rules. If necessary, the Bank shall make appropriate changes to these Rules. VI. METHODS OF ORDER EXECUTION Unless otherwise specified in the Client s special instruction (as described in Part IV herein), the Bank shall execute the orders using one of the following methods or combination thereof (for further details, see Part X herein): (a) Outside a regulated market or a multilateral trading facility, alone or through a third party: the order will be executed by pairing with order of other customer; The Bank or the relevant third party (e.g. broker), acting as transfer venue, executes the order itself (including the Bank buying the investment instrument to or selling from its own assets); the order will be executed at other third party (e.g. broker, market maker or other liquidity provider). (b) Directly on a regulated market, at the systematic internalizer or in a multilateral trading facility, or where the Bank or a third party is not a direct member of the regulated market or the multilateral trading facility, through a selected participant in the relevant market or system with which the Bank or a third party has entered into an adequate agreement concerning execution of the orders in the given market or system. The Bank shall be authorised to hand any order of the Client over for execution to a third party, especially other company from the Citibank Group or other provider of the applicable investment service or activity (e.g. broker). VII. CONTACT DETAILS: In case of any queries or comments of the Client concerning these Rules or by the Bank s activities in accordance with these Rules the Bank may be contacted at the following contacts: For all purposes of providing the investment services with the exception of custody investment service including related services and procurement of settlement of securities or book-entry securities transactions: Citibank Europe plc, organizační složka The Treasury Marketing department: Bucharova 2641/14, Prague 5, postal code RULES FOR EXECUTION OF ORDERS Page 6

7 Website: Phone: For the purpose of providing the custody investment service including related services and procurement of settlement of securities or book-entry securities transactions: Citibank Europe plc, organizační složka SFS Operations Department Bucharova 2641/14, Praha 5, postal code Website: Phone: The Client has the right to communicate with the Bank in Czech. In individual cases the Bank may agree to communicate with the Client in English. The Bank shall communicate any relevant information and enter into contracts or agreements with the Client in these languages. VIII. CONTINUOUS EVALUATION OF THE RULES The Bank shall continuously evaluate the efficiency of the Rules, especially how well orders are executed by third parties, and correct any deficiencies without undue delay. IX. REVIEW OF THE RULES The Bank shall review the provisions of these Rules on a regular basis (at least once a year) and immediately after the occurrence of a substantial change impacting the ability to achieve the best possible result for the Client through the execution of the order. The Bank shall publish the notification of the changes in the conditions which may affect the execution of the orders or these Rules. X. GENERAL TERMS FOR PROCESSING THE ORDERS The Bank shall process the Client's orders in relation to the other customer orders or orders on its own account, fairly and without undue delay. To this end, the Bank has set rules for: prompt and accurate recording of the acceptance and execution of the orders; processing the comparable orders of the customers sorted by the time of acceptance, except where justified by the nature of the order, the current situation on the market or the interest to the Client; proper settlement of the order, if such settlement is provided by the Bank; prompt and accurate distribution of investment instruments, the received funds and costs incurred in case of combining of the customers orders or combining the customers orders with those of the Bank on the Bank s own account (see also hereinbelow, Part XI). Details are stipulated in the special Agreement between the Bank and the Client, or they shall be communicated to the Client in any other suitable manner in accordance with the relevant special Agreement. Further information shall be communicated by the Bank at the Client s request. RULES FOR EXECUTION OF ORDERS Page 7

8 XI. COMBINING THE ORDERS The Bank is entitled to combine the orders (i.e. to execute the Client s order along with a transaction on the Bank s own behalf or with an order from another customer) if: (a) (b) (c) (d) it is unlikely that combination of orders is less beneficial for the customers whose orders are to be combined than executing their orders separately; the Client whose order is to be combined has been informed that combining may be less beneficial for the Client than executing the Client s order separately provided such a situation can occur; the Bank distributes the performances and obligations out of the executed combined order in accordance with the relevant internal policy of the Bank; and the distribution of the performances and obligations out of the combined order damages no other customer. If the Client s combined order and the transaction on the Bank s own behalf were executed only in part, the Bank shall preferentially assign the Client the performances and relevant obligations out of the combined order, unless the Bank is able to substantiate that the combined order was executed on more favorable terms than would have likely been achieved if executing orders separately, or not executing them at all. If this is substantiated by the Bank, the Bank may distribute performances and relevant obligations out of the combined order on a pro rata basis. XII. FINAL PROVISIONS This document is effective only in relation to the Bank s business activities in the Czech Republic. Information in this document, (i) that is not intended for the Client personally, (ii) the provision of which using a remote access is a reasonable practice established or envisaged to be established between the Bank and the Client, and (iii) if accessible to the Client at any time for a period of time adequate to its purpose, and information about change thereof, if such a change is relevant to the service provided by the Bank to the Client, shall be provided by the Bank to the Client in a manner allowing a remote access, i.e. on its official Internet website RULES FOR EXECUTION OF ORDERS Page 8