BestExHub RTS 28 & DA 65(6) OVERVIEW

BestExHub RTS 28 & DA 65(6) OVERVIEW

MIFID II EXECUTION QUALITY PUBLICATION BACKGROUND In order to fully assess the quality of execution being obtained on execution venues used by investment firms to execute client orders (including execution venues in third countries), MiFID II requires investment firms to publish on an annual basis execution quality data relating to: top five execution venues (per RTS 28) and top five execution brokers (per Delegated Regulation Art 65(6) 08/02/2018 2

MIFID II EXECUTION QUALITY PUBLICATION REQUIREMENTS MiFID II requires investment firms to publish on an annual basis quantitative information relating to: top five execution venues (per RTS 28) and top five execution brokers (per Delegated Regulation Art 65(6)). This is by class of financial instrument (as defined in Annex I of RTS 28) for executions relating to: professional clients, retail clients, securities financing transaction clients. 08/02/2018 3

MIFID II EXECUTION QUALITY PUBLICATION REQUIREMENTS In addition to quantitative data, firms are required to publish a summary of their analysis for each class of financial instrument. The analysis includes explanation and descriptions including: execution factors, close links, conflicts of interests, specific fee arrangements (discounts, rebates or non-monetary benefits received); factors that led to a change in the list of execution venues listed in the firm's execution policy, how the investment firm has used any data or tools relating to the quality of execution, including any data published by execution venues and firms under RTS 27 where applicable, an explanation of how the investment firm has used output of a CTP. 08/02/2018 4

BestExHub provides an independent platform to assist execution venues meet their regulatory obligations for publishing execution quality data and comparing market wide RTS 27, RTS 28 and DA 65(6) execution quality data. 08/02/2018 5

Our corporate website is not designed for publishing data files without a client login or accepting a disclaimer. I need a public website with no restrictions to publish RTS 28 (and DA65(6)) reports for the public to download. 08/02/2018 6

ESMA Q&A ESMA requires reports to be available to the public [on a website] without any charges, and not be placed behind a firewall, registration page or be subject to password encryption or other restrictions 08/02/2018 7

RTS 28/DA 65(6) REPORT PUBLISHING RTS 28 (and DA65(6)) execution quality reports are published on BestExHub.com website with dedicated URL and webpage per investment firm. Investment firms can use their own fully formed machine-readable format, or leverage the BestExHub format. BestExHub report hosting service meets the regulatory requirements of: freely accessible to the public, accessibly without limitations, not hidden behind firewall, no registration page, not subject to password encryption or any other restrictions. public domain for two years. Firms can provide a URL link from their homepage to their BestExHub.com page. 08/02/2018 8

DATA TO BE PUBLISHED UNDER RTS 28 and DA 65(6) 08/02/2018 9

CLASS OF FINANCIAL INSTRUMENTS 22 class of financial instruments as defined by RTS 28 annex I. RTS 28 Annex I Class of Financial Instruments Ref. a)i) Equities Shares & Depositary Receipts Tick size liquidity bands 5 and 6 a)ii) Equities Shares & Depositary Receipts Tick size liquidity bands 3 and 4 a)iii Equities Shares & Depositary Receipts Tick size liquidity band 1 and 2 b)i) Debt instruments Bonds b)ii) Debt instruments Money Market Instruments c)i) Interest rates derivatives Futures and options admitted to trading on a trading venue c)ii) Interest rates derivatives Swaps, forwards, and other interest rates derivatives d)i) Credit derivatives Futures and options admitted to trading on a trading venue d)ii) Credit derivatives Other credit derivatives e)i) Currency derivatives Futures and options admitted to trading on a trading venue e)ii) Currency derivatives Swaps, forwards, and other currency derivatives f) Structured finance instruments g)i) Equity Derivatives Options and Futures admitted to trading on a trading venue g)ii) Equity Derivatives Swaps and other equity derivatives h)i) Securitized Derivatives Warrants and Certificate Derivatives h)ii) Securitized Derivatives Other securitized derivatives i)i) Commodities derivatives and emission Options and Futures admitted to trading on a trading venue allowances Derivatives i)ii) Commodities derivatives and emission Other commodities derivatives and emission allowances derivatives allowances Derivatives j) Contracts for difference K0 Exchange traded products (Exchange traded funds, exchange traded notes and exchange traded commodities) l) Emission allowances m) Other instruments 10

DATA TO BE PUBLISHED As defined by RTS 28 annex II, table 1 (information regarding Retail Clients) Class of Instrument Notification if < 1 average trade per business day in the previous year Top five execution venues ranked in terms of trading volumes (descending order) Y/N Proportion of volume traded as a percentage of total in that class Proportion of orders executed as percentage of total in that class Percentage of passive orders Percentage of aggressive orders Percentage of directed orders 11

DATA TO BE PUBLISHED As defined by RTS 28 annex II, table 2 (information regarding Professional Clients) Class of Instrument Notification if < 1 average trade per business day in the previous year Top five execution venues ranked in terms of trading volumes (descending order) Y/N Proportion of volume traded as a percentage of total in that class Proportion of orders executed as percentage of total in that class Percentage of passive orders Percentage of aggressive orders Percentage of directed orders 12

DATA TO BE PUBLISHED As defined by RTS 28 annex II, table 3 (information regarding Securities Financing Transactions) Class of Instrument Notification if < 1 average trade per business day in the previous year Top five execution venues ranked in terms of trading volumes (descending order) Y/N Proportion of volume traded as a percentage of total in that class Proportion of orders executed as percentage of total in that class 13

SUMMARY OF ANALYSIS DATA TO BE PUBLISHED Details to be published for each Class of financial instrument. RTS 28 Ref. Art. 3)a) Art 3)b) Art 3)c) Art 3)d) Art 3)e) Art 3)f) Art 3)g) Art 3)h) Details to be published (by Class of financial instrument an explanation of the relative importance the firm gave to the execution factors of price, costs, speed, likelihood of execution or any other consideration including qualitative factors when assessing the quality of execution; a description of any close links, conflicts of interests, and common ownerships with respect to any execution venues used to execute orders; a description of any specific arrangements with any execution venues regarding payments made or received, discounts, rebates or non-monetary benefits received; an explanation of the factors that led to a change in the list of execution venues listed in the firm's execution policy, if such a change occurred; an explanation of how order execution differs according to client categorisation, where the firm treats categories of clients differently and where it may affect the order execution arrangements; an explanation of whether other criteria were given precedence over immediate price and cost when executing retail client orders and how these other criteria were instrumental in delivering the best possible result in terms of the total consideration to the client; an explanation of how the investment firm has used any data or tools relating to the quality of execution, including any data published under Delegated Regulation (EU) 2017/575; (aka RTS 27: Data published by Execution venues); where applicable, an explanation of how the investment firm has used output of a consolidated tape provider established under Article 65 of MiFID II. 14

TIMING OF REPORT PUBLICATION RTS 28/DA 65(6) reports Report Type Information Period To be published by; RTS 28 1-JAN to 31-DEC 30-APR DA 65(6) 1-JAN to 31-DEC 30-APR The first RTS 28/DA 65(6) reports are to be published by 30-APR-18 for information period 1-JAN-17 to 31-DEC-17. See Qu. 5 and 6 of ESMA Q & A on Investor Protection topics and for further details. https://www.esma.europa.eu/sites/default/files/library/esma35-43-349_mifid_ii_qas_on_investor_protection_topics.pdf#page=20 08/02/2018 15

RTS 28/DA 65(6) REPORT PUBLISHING BestExHub Reports Publishing Service will publish reports immediately (default), or can be configured to be held until noon of the previous business day prior to the relevant published by dates. 08/02/2018 16

I need help generating RTS 28 and DA 65(6) data into machinereadable reports. 08/02/2018 17

RTS 28/DA 65(6) REPORT CREATION The BestExHub web interface provides users with a GUI to enter information related to RTS 28 (and DA65(6)) to create reports in machine-readable format, by class of financial instrument for each client type. In addition, firms can enter qualitative information relating to summary of the analysis and conclusions drawn from their detailed monitoring. 08/02/2018 18

I need a solution to help me review and compare RTS 27 venue execution quality reports for different indices as part of my quarterly Best Execution policy review and annual RTS 28 report submission. 08/02/2018 19

RTS 27 REPORT AGGREGATION & COMPARISON SERVICE Using market wide quarterly public execution quality reports, BestExHub aggregates and consolidates RTS 27 reports into user configurable comparison and trend reports. Comparison, trend and summary reports are viewed and downloaded through BestExHub interactive web interface, or through an API. Reports are generated for individual instruments, index or combination of several instruments and/or indices stored as user configurable watchlists. Reports can be configured for selective date and time period. 08/02/2018 20

I need a solution to help me review and compare RTS 28 and DA 65(6) execution quality reports to help me understand my brokers, my clients and my peers. 08/02/2018 21

RTS 28 / DA 65(6) REPORT AGGREGATION AND COMPARISON SERVICE Using market wide annual public execution quality reports, BestExHub aggregates and consolidates RTS 28 and DA65 (6) reports into user configurable comparison reports. Comparisons of RTS 28 and DA65 (6) can be viewed and downloaded through BestExHub interactive web interface, or through an API. Select by class of financial instrument, client type and reporting investment firm to compare data. 08/02/2018 22

BestExHub The MiFID II Best Execution Report Hub info@bestexhub.com BestExHub.com Registered Office: Wyndmere House, Ashwell Road, Steeple Morden, Hertfordshire, England. SG8 0NZ Registered in England and Wales, Company number: 11050720 2 3