The purpose of this document is to provide clients of Leodis Wealth Asset Management with a general understanding of our ‘Order Execution Policy’ (OEP) and explain how we meet our regulatory obligations.
What is Best Execution?
When executing an order, we must demonstrate that we achieve ‘Best Execution’ on a consistent basis – that is obtaining the best possible results for clients when carrying out transactions on their behalf. When dealing, we will consider certain execution factors and the importance of these factors will vary depending on the characteristics of the order, financial instrument and execution venue.
The execution factors we consider when executing an order are:
- Speed of execution
- Likelihood of execution and settlement
- Size and nature of the order
In most cases, price and overall transaction costs will be important factors in obtaining the best execution for a client order. However, in certain circumstances we may determine that other factors warrant greater consideration in achieving the best execution result. We will exercise our own discretion in determining these factors.
All our clients are classified as Retail clients and will be treated as such for the purposes of best execution.
Specific Client Instructions
If a client provides us with a specific instruction to deal, this will be carried out in accordance with those instructions and we will be deemed to have complied with the best execution requirement. We will take all reasonable steps to obtain the best results, however we may be prevented from executing the order in accordance with the OEP.
We actively monitor our trades to ensure that orders are placed in accordance with the OEP. To assist with this process a regular and random sampling of trades is undertaken and the results reviewed to satisfy our monitoring obligations and ensure consistent best execution. The monitoring arrangements will not be focused purely on price and will take into consideration other factors such as speed and likelihood of execution, price movement and implicit as well as explicit costs.
We also undertake an annual review of the OEP and the performance of third-party broker dealers used for execution services. Any significant changes to the OEP will be communicated to clients and implemented accordingly.
When placing an order, a range of execution venues are used depending on the financial instruments involved.
- UK equities – in normal market conditions and orders concerning liquid UK equities, we will use an RSP (Retail Service Provider) network to poll market counterparties to identify best price. If the order cannot be executed via the RSP, it will be passed to a third-party broker for execution on a regulated market (RM) such as the London Stock Exchange, or Multilateral Trading facility (MTF).
- The selection of our third-party brokers is dependent on certain factors such as market reputation, historic execution performance and overall costs. Due diligence on the approved brokers is undertaken on an annual basis.
- Overseas/International listed equities/bonds – for crest deliverable securities the RSP route will be used where possible and if required a third-party broker dealer will be used to fulfil the order. Where a listing is overseas and settled locally, we will execute via a selected broker under the terms of the OEP.
- Collective UCITS/OEICS – Orders will be passed through the FNZ electronic system or directly with the fund manager and executed on agreed terms with the provider.
- Debt securities – Smaller orders listed on the London Stock Exchange will be routed via the electronic order system (RSP). For larger and less liquid orders and those not listed on the LSE, we will pass on the order to a broker dealer to source the best possible price for the client.
- Structured products – Where a quote on an exchange is unavailable the order will be executed with the product provider.
- we reserve the right to use other venues and third parties where it has been deemed appropriate in accordance with the OEP and venues may be added or removed from the list.
Execution venues – Top Five Report for 2018
The Markets in Financial Instruments Directive (MiFID II) requires firms to publish annual reports on the top 5 execution venues used during the previous calendar year. Please see the below tables for the Leodis Wealth 2018 data:
- Passive Orders – an order sent to an execution venue that is not required to be executed immediately and may not be entirely fulfilled
- Aggressive Orders – an order sent to an execution venue that you expect to be executed immediately and expected to be fulfilled.
A copy of this policy and venue information can be downloaded Here