Order Execution Policy State Street Global Markets International Limited State Street Global Markets International Limited ( SSGMIL ) provides trading services in equities, fixed income, futures and foreign exchange. When executing or transmitting your order(s) we take all reasonable steps to provide you with the best possible result on a consistent basis by taking into account any specific instructions 1 we receive from you and a range of execution factors in accordance with the principles described in this Order Execution Policy ( Policy ). 1. Scope Our obligation to consistently provide you with the best possible result in accordance with the Policy applies in respect of any order you may give us in any financial instrument as defined by the Markets in Financial Instruments Directive ( MiFID ), regardless of whether the execution takes place on a venue in the European Economic Area, an equivalent venue in a third country or on an overthecounter basis. The Policy only applies where we have categorised you as a professional client and owe you a contractual or agency obligation. The duty to provide best execution does not apply to transactions involving eligible counterparties and therefore where we have categorised as such the Policy will not apply. SSGMIL does not deal with retail clients. 2. Execution factors When executing and/or transmitting your orders we will take into account different execution factors including, but not limited to: Price; Costs; Speed; Likelihood of execution; Likelihood and reliability of settlement; 1 See Section 4 below. STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 1
Size; Nature of an order; and Other relevant considerations, such as: Liquidity (relative order size or financial instruments underlying liquidity); Market Impact; Nature of the available execution venue (regulated versus unregulated market venue);and Nature of the financial instrument. Our traders use their experience and judgment to determine the importance of each of these factors on a case by case basis to assist in achieving of the best possible result on a consistent basis in respect of your orders. 3. Execution criteria In determining the relative importance of the execution factors, when we are executing and/or transmitting your orders, we will take into account the following execution criteria: The extent to which we believe you are relying upon us to provide you with the best possible result; The characteristics of your order(s); The characteristics of the financial instrument; The characteristics of the available execution venues; and If your order is subject to any specific instructions that you have given us. 4. Specific client instructions Whenever you have given us a specific instruction regarding an order or an aspect of an order, we will execute or transmit such order or aspect thereof following your specific instruction. We will then apply this Policy and take reasonable steps to obtain the best possible result for the elements of the order not subject to or limited by your instructions. In the event that we feel that your instructions may have become unduly limiting to the execution of your order, such as where market conditions have changed, we would aim to discuss this with you and agree a suitable course of action. 5. Relative importance of the execution factors While price is generally a key factor, the overall value to a client of a particular transaction may be affected by the other factors listed above. The relative importance of each of the factors will differ depending on: The characteristics of your order; STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 2
The characteristics of the financial instruments to which the order relates, as certain instruments are easier to execute than others; The characteristics of the execution venue(s) to which we are able to direct and execute your order and the conditions for safe settlement associated with those venues; and, Consideration of potential market impact, taking into account any instructions you might give us on participation levels and having analysed the liquidity and relative size of the order. 6. Further information on assetclass specific execution arrangements a. Equity instruments SSGMIL s preferred method of executing your orders for equity instruments is for our traders to directly execute your order in the market as your agent using a combination of techniques ranging from manual to fully automated. We may also use smart order routers and algorithms in order to allow us to work your order(s) across multiple venues in the most efficient manner possible; we may also cross your order with another SSGMIL client or with another market counterparty or liquidity provider. Where facilities for direct execution are not available to us we will transmit your order to a suitable thirdparty or affiliated for execution 2. In such cases we will closely monitor the performance of the order in so far as is possible and will apply the principles described in section 7 of the Policy. In Appendix I of this Policy we provide you with an indicative list of the execution venues and illustrate our access arrangements, broadly these comprise the following categories of venue: Regulated markets and third country equivalents; Multilateral trading facilities ( MTF ) and third country equivalents; Systematic internalisers; Internal and external crossing networks; and Marketmakers, s, banks and other liquidity providers. You may of course instruct us to execute your orders using particular venues or combinations thereof. Subject to regulation and acceptance by SSGMIL, you may instruct us to direct your order to specific counterparties for execution. 2 Please refer to Appendix I and see further in section 7 of this Policy. STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 3
From timetotime we may determine that it is beneficial to your order to execute it outside of a regulated market or MTF. Provided that you have given us your express prior consent and we believe it is consistent with this Policy to do so, we will execute your orders in such a manner. b. Fixed Income instruments SSGMIL typically executes your orders in fixed income instruments directly with other market counterparties (also known as dealers), because the use of trading venues is traditionally limited in fixed income markets. When seeking prices from such market counterparties we will look to obtain quotes from the key dealers for the particular instrument and would aim to gain at least three quotes where the instrument permits this and rarely more than five. There may be limited circumstances where, based on our expertise and judgment, your best interests may be better served by seeking prices from fewer or more market counterparties. The choice of counterparties varies based on the specific instrument. When selecting counterparties to seek prices from, in addition to the execution factors, we will consider the following characteristics of available counterparties: Electronic execution capability and ability to quote a market via Bloomberg functionality; The quality of indicative bids and offers and associated spreads; Previous executions performed with the counterparty; Status of the counterparty as a: lead manager of the applicable issuance of the instrument; and/or, known specialist in the instrument or sector. c. Futures In the absence of specific instructions, when we are executing or transmitting your orders in futures, we exercise our own discretion, based on our experience, judgment, and the nature of your order(s) to provide you with the best possible result and we take into account the following execution factors: Price; Market impact; Size of the order; Speed/ likelihood of execution; Market depth and liquidity in the contract; and, STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 4
Any specific instructions you may give us. 3 d. Foreign SSGMIL will typically transmit your orders in foreign exchange derivatives for execution to a suitable thirdparty or affiliated dealer for execution 4, subject to jurisdiction. SSGMIL acts as your agent; however, the relevant thirdparty or affiliate may become your counterparty to the trade, depending on the specifics of the transaction. Additionally, at your request we will route your orders to a specific counterparty of your selection. When deciding where to transmit your orders, SSGMIL will act in your best interests when exercising our professional judgment to select an affiliate or thirdparty dealer based on our assessment of that firm s ability to satisfy the various execution factors related to your order and taking into account any instructions you may have given us. Finally, in respect of any orders in foreign exchange which do not constitute a financial instrument (i.e. spot contracts), whilst the obligation for best execution of orders under MiFID does not apply, we will seek to apply the principles of this Policy as we believe this serves your general best interests. 7. Other important matters a. Use of thirdparties and affiliates In order to gain access to certain markets where we do not have a membership or other direct access arrangements, we may need to transmit your order to an affiliated or third party firm for execution on our behalf. We will exercise our judgment, skill and experience to determine the appropriateness and suitability of the relevant affiliate or third party firm. The choice of thirdparty and affiliate firms will be determined by an ongoing assessment of their ability to support our best execution obligations to you and a combination of the following considerations which will depend on the market we aim to access: Execution capabilities and range of accessible venues in target markets; Range of electronic execution and order handling capabilities; Credit ratings and quality of settlement arrangements; Status of the thirdparty or affiliate as: an official market maker or other market specialist; and/or 3 Please refer to section 4 above. 4 Please refer to Appendix I for details of SSGMIL s affiliates. STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 5
a known specialist in the market, sector or instrument. Client orders executed using such arrangements are subject to monitoring and review 5 in order to assess both the outcome of the order against the Policy and the overall performance of the thirdparty or affiliate firm. b. Publication of limit orders We believe that it is not always in your best interests to make public limit orders in shares admitted to trading on a regulated market when they are not immediately executed under prevailing market conditions. We therefore will seek to obtain a general instruction from you during the onboarding process, which we will also reconfirm periodically thereafter, which allows us to use our discretion as to whether or not to make such orders public. Unless otherwise instructed, we will follow the general instruction in respect of each order you give us. c. Execution of orders outside a regulated market or MTF From timetotime we may determine that it is beneficial to your order to execute all or part of it outside of a regulated market or MTF. Provided that you have given us your express prior consent, obtained during the onboarding process and periodically renewed thereafter, when we believe that it is consistent with this Policy to do so we will execute your orders in such a manner and apply the principles of this Policy. d. Order aggregation and allocation When executing and/or transmitting your orders we may combine your orders with those of other clients of SSGMIL, which may include affiliated companies. We will only do this where we reasonably believe that it is in the overall best interest of each client. In the limited circumstances where SSGMIL or an affiliate may need to trade on its own account, such as when trading out of errors associated with client orders, we would not combine your orders with those orders. 8. Monitoring and oversight SSGMIL closely monitors the effectiveness and performance of its execution arrangements and delivery of best execution to its clients in respect of this Policy. The relevant trading desks perform regular monitoring using a variety of methods pretrade, during trading and posttrade, including third party analytics. In addition to frontoffice monitoring, the compliance department conducts independent monitoring and may challenge findings and outcomes when required through the course of their program. SSGMIL has established a Best Execution Committee ( BEC ) with set terms of reference in order to provide oversight of the firm s execution arrangements and performance findings. The BEC reports directly to State 5 Please refer to section 8. STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 6
Street Global Markets EMEA Senior Management Committee, and meets monthly to consider the findings of monitoring activities by the trading desks and compliance department. The BEC s membership comprises senior representatives from sales trading, execution trading, operations, transition management, compliance, legal and risk. 9. Procedural arrangements The Policy and our order execution arrangements are reviewed at least annually by the relevant trading desks, compliance and BEC, but may be updated more frequently when required, such as where we identify a material change which may affect our ability to deliver best execution on a consistent basis. In the event that any material changes are made to the Policy or to our execution arrangements we will notify you accordingly. Finally, you may request that we demonstrate adherence to this Policy in respect of any order(s) we execute on your behalf. Such requests should be made in writing and directed to: Head of SSGM EMEA Compliance State Street Global Markets International Limited 20 Churchill Place Canary Wharf London E14 5HJ United Kingdom Effective date: May 2015 Legal notices and disclaimer State Street Global Markets is the marketing name and a registered trademark of State Street Corporation used for its financial markets business and that of its affiliates. The products and services outlined herein are only offered to professional clients or eligible counterparties through either State Street Bank Europe Limited, authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority; State Street Bank and Trust Company, London Branch, authorised and regulated by Federal Reserve Board, authorised and subject to limited regulation by the Prudential Regulation Authority and subject to regulation by the Financial Conduct Authority; State Street Global Markets International Limited, authorised and regulated by the Financial Conduct Authority and/or State Street Bank GmbH, London Branch, authorised by Deutsche Bundesbank and the German Financial Supervisory Authority and subject to limited regulation by the Financial Conduct Authority and Prudential Regulation Authority. Details about the extent of our regulation by the Financial Conduct Authority and Prudential Regulation Authority are available from us on request. Please note certain foreign exchange business (spot and certain forward transactions) are not regulated. This communication is not intended for retail clients, nor for distribution to, and may not be relied upon by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to applicable law or regulation. This publication or any portion hereof may not be reprinted, sold or redistributed without the prior written consent of State Street Global Markets. 2015 State Street Corporation All Rights Reserved STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED 7
Appendix I Execution Venues State Street Global Markets International Limited The following list sets out the various arrangements State Street Global Markets International Limited ( SSGMIL ) may use in each in market and assetclass to execute your orders. The precise venues and arrangements will be selected in accordance with the Policy, subject to any preferences you may indicate and specific jurisdictional requirements. References to Direct Access include venues where SSGMIL is either a member/participant or has direct market access through a thirdparty that is itself a member. This list may change from time to time, please consult your SSGMIL representative for details of our most current capabilities and to discuss your execution requirements further 1. European venues Direct Access Thirdparty Austria Vienna Stock Belgium Euronext Brussels Bulgaria Bulgarian Stock Croatia Zagreb Stock Cyprus Cyprus Stock Czech Republic Prague Stock Denmark NASDAQ OMX Nordic Copenhagen Estonia NASDAQ OMX Baltic Tallinn Finland NADAQ OMX Nordic Helsinki France Euronext Paris Germany Frankfurt Stock (Xetra) Börse Berlin Equiduct Eurex Deutschland Greece Athens Stock Hungary Budapest Stock Iceland NASDAQ OMX Iceland Ireland Irish Stock Italy Borsa Italiana Latvia NASDAQ OMX Baltic Riga Lithuania NASDAQ OMX Baltic Vilnius Luxembourg Luxembourg Stock Netherlands Euronext Amsterdam Norway Oslo Børs Burgundy STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED A11
APPENDIX I Poland Warsaw Stock Portugal Euronext Lisbon Romania Bucharest Stock Russia Moscow Stock Slovakia Bratislava Stock Slovenia Ljubljana Stock Spain Bolsa de Madrid Switzerland SIX Swiss United Kingdom BATS Europe / ChiX Europe London Stock Turquoise 2. Middle East and Africa venues Direct Access Thirdparty Bahrain Bahrain Stock Egypt Egyptian Ghana Ghana Stock Israel TelAviv Stock Kenya Nairobi Stock Kuwait Kuwait Stock Morocco Casablanca Stock Nigeria Nigerian Stock Qatar Qatar Stock Turkey Borsa İstanbul South Africa Johannesburg Stock United Arab Emirates Abu Dhabi Stock Dubai Stock Uganda Uganda Stock 3. AsiaPacific venues Australia Australian Securities ChiX Australia Bangladesh Dhaka Stock China Shanghai Stock (inc. ShanghaiHong Kong Stock Connect) Hong Kong Hong Kong Stock (inc. ShanghaiHong Kong Stock Connect) Hong Kong s and Clearing India Bombay Stock National Stock Indonesia Bursa Efek Indonesia Japan JASDAQ Securities Nagoya Stock Osaka Securities Sapporo Securities Tokyo Stock ChiX Japan SBI Japannext Direct Access Affiliated Thirdparty STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED A12
APPENDIX I Malaysia Bursa Malaysia Pakistan Karachi Stock New Zealand NZX Markets Philippines Philippine Stock Singapore Singapore Sri Lanka Colombo Stock South Korea Korea Taiwan Taiwan Stock Thailand The Stock of Thailand Viet Nam Ho Chi Minh City Stock 4. Americas venues Brazil BM&F BOVESPA Rio de Janeiro Stock Canada Alberta Stock Montreal Toronto Stock Vancouver Stock Affiliated Thirdparty Chile Santiago Stock Columbia Columbia Stock Mexico Bolsa Mexicana de Valores Peru Lima Stock United States New York Stock NYSE Arca NASDAQ BATS Blockcross 5. Relevant SSGMIL affiliates Global State Street Bank and Trust Company EQ FI FUT FX EMEA State Street Bank GmbH AsiaPacific State Street Global Markets (Japan) Americas State Street Global Markets, LLC State Street Global Markets Canada, Inc. Currenex, Inc. All execution venues listed are available through State Street Global Markets International Limited as of May 2015. Venues are subject to periodic review and change. 2015 State Street Corporation All Rights Reserved STATE STREET GLOBAL MARKETS INTERNATIONAL LIMITED A13