BEST EXECUTION POLICY
Following the implementation of the Markets in Financial Instruments Directive
2014/65/EU (“MiFID II”) and in accordance to the provisions of the Investment Services
and Activities and Regulated Markets Law of 2017 (the “Law”) of the Cyprus Securities
and Exchange Commission (“CySEC”), A-Conversio Capital Ltd (the “Company”) is
required to establish an Order Execution Policy (the “Policy”) and take all reasonable
steps to obtain the best possible result (“Best Execution”) on behalf of its clients.
The Policy describes the way that the Company will achieve the best possible results for its clients by taking into consideration the provisions of the Delegated Regulation (EU)
2017/565 and onward amendments including information that must be provided to
clients and potential clients in relation to the execution criteria and factors considered
when trying to obtain best possible results on a consistent basis.
The Order Execution Policy of the Company applies to both retail and professional clients, when providing the investment services of:
a)Reception and transmission of orders, and
b)Portfolio Management, in relation to:
- a) Transferable Securities;
- b) Money market instruments;
- c) Units in Collective investment undertakings;
- d) Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash; and
- e) Financial contracts for differences.
as these are defined in points 1,2, 3, 4, and 9 of section C of Annex I of MiFID II.
The Company’s Best Execution obligations do not extend to Eligible Counterparties as per Article 30(1) of MiFID II.
Moreover, the Policy is limited when the Company receives specific client instructions as provided in section 6 of this Policy.
3. Best Execution Factors & Criteria
When receiving and transmitting clients’ orders to third parties (“receiving firms”) for execution or when executing clients’ orders, the Company takes into account multiple
Execution Factors, in order to obtain the best possible result for its clients, such as:
- Likelihood of execution and settlement;
- Size of order;
- Costs (direct or indirect);
- Speed of execution;
- Nature of the order;
- Any other considerations relevant to the execution of an order (e.g. prevailing market conditions).
The Company determines the relative importance of the aforementioned Execution
Factors by taking into account the characteristics of the following Execution Criteria:
- the client, including the categorisation of the client as retail or professional,
- the client’s order,
- the financial instruments that are the subject of that order, and
- the Execution Venues to which that order can be directed.
The process by which the Company performs this assessment depends on the specifics of each case. The Company’s execution obligations will be discharged in a manner that
considers the different circumstances associated with the execution of the order as they
relate to the financial instruments involved.
Price and costs will ordinarily be of high relative importance in obtaining best possible results. However, in some circumstances, reference to the Execution Criteria may
appropriately determine that other Execution Factors have greater importance in
achieving the best possible result for the client.
For retail clients, the best possible result shall be determined in terms of the total consideration, representing the price of the financial instrument and the costs related to
execution, which shall include all expenses incurred by the client which are directly
related to the execution of the order, including Execution Venue fees, clearing and
settlement fees and any other fees paid to third parties involved in the execution of the
order. The relative importance of the execution factors considered by the Company to
obtain the best possible result for its clients are depicted in Annex 1 of the Policy
4. Execution Venues
“Execution Venues” are the locations (with or without a physical presence) such as regulated markets, multilateral trading facilities, systematic internalisers, market makers, liquidity providers or any other entity that facilitates trading of Financial Instruments.
For the purpose of transmitting orders for execution, the Company acts as an agent on behalf of the Client. A list of the Execution Venues and intermediaries (third party
brokers) used by the Company for the execution of client orders in respect to each class
of financial instruments can be found below:
- Eurobank Cyprus Ltd
The factors relevant to the Company for selecting intermediaries include the following:
- Soundness of intermediary;
- Reputation, financial strength and stability;
- Access to primary and/or secondary markets;
- Ongoing reliability;
- Overall costs of a trade including commissions, mark-ups, markdowns or spreads;
- Electronic connectivity; and
- Willingness to execute difficult transactions
In addition, the following conditions must be met before intermediaries can be approved:
- Licensed, as required, to execute the type of transaction; and
- Supervision by national authorities.
Shares/bonds trading venues:
- Stock Exchange (a Regulated Market in which securities are traded).
Derivatives’ trading venues:
- All transactions in derivatives are undertaken over the counter (OTC) and NOT on
a regulated exchange. As a result, such transactions may expose the Client to
greater risks than transactions executed on regulated markets.
The Company reserves the right to use other Execution Venues where deemed
appropriate and may add or remove any Execution Venues from this list.
5. Selecting an Execution Venue
Subject to proper consideration of the Execution Criteria and Execution Factors referred to above, where there is more than one competing Execution Venue to execute an order
for a financial instrument, the Company shall assess and compare the results for the client
that would be achieved by executing the order on each of the Execution Venues.
The Company will transmit orders to those execution venues that it deems sufficient to provide the best possible result based on comparable venue information. Subject to any
specific instructions, in meeting the best execution obligation to take all sufficient steps
to obtain on a consistent basis the best possible result for the execution, the Company
considers the following execution venues as appropriate:
- Regulated Markets (“RM”);
- Multilateral Trading Facilities (“MTF”);
- Organised Trading Facilities (“OTF”);
- Systematic Internalisers (“SI”);
- An entity which performs a similar function in a third country to the functions
performed by any of the foregoing outside the EEA which are regulated according
to their local rules.
6. Specific Client Instructions
Where the client gives specific instruction as to the execution of an Order, the Company shall execute the Order in accordance with the provisions of Article 27(1) of MiFID II.
When the Company executes an order following specific instructions from the client, it should be treated as having satisfied its best execution obligations only in respect of the
part or aspect of the order to which the client instructions relate. The fact that the client
has given specific instructions which cover one part or aspect of the order should not be
treated as releasing the Company from its best execution obligations in respect of any
other parts or aspects of the client order that are not covered by such instructions.
The Company will not induce a client to instruct it to execute an order in a particular way, by expressly indicating or implicitly suggesting the content of the instruction to the client.
7. Reception and Transmission of Orders
Subject to any specific instructions from the client (as per paragraph 6), the Company will transmit an order it receives from the client to an associated entity, such as a third-party
broker, for execution. In doing so, the Company shall act in the client’s best interests and
will comply with section 3 above.
The Company will review periodically its choice of third-party brokers to ensure that the third-party broker has execution arrangements and execution policy that enable the
Company to comply with all its best execution requirements.
The obligation to provide best execution applies to all types of financial instruments captured under MiFID II and is not based on whether or not the instrument is listed in the
European Economic Area. Therefore, the Company will require from third-party brokers
to demonstrate that they are providing with best execution on a consistent basis in line
with the Policy.
8. Client Order Handling
All client orders will be executed promptly and accurately recorded and allocated. The Company will inform retail clients about any material difficulty relevant to the proper
carrying out of orders promptly upon becoming aware of the difficulty.
Where comparable orders are received, they will be processed sequentially, unless a specific client seeks to be treated otherwise. The Company will disclose any inducements
and fees related to the use of execution venues to clients.
9. Order Aggregation
To carry out a client order in aggregation with either another client order, the Company will ensure the following requirements are met:
- a) The client has been made aware that aggregation may, in some cases, result in
obtaining a less favourable price than if the order were executed separately;
- The Company, in its sole discretion and under prevailing market conditions, does
reasonably believe that such action is likely to be within the client’s best interests
and the Company is able to demonstrate this; and
- The decision to aggregate and, if necessary, reallocate will be made in accordance
with any client instructions, having regard to price and volume and allocated
10. Monitor and Review
The Company will monitor on a regular basis and the effectiveness of this Policy and the execution quality of the procedures explained in this Policy, making any changes where
The Company will also be able to demonstrate to clients, at their request, that we have executed their orders in accordance with this Policy.
In addition, the Company will review this Policy at least once a year and will notify its clients of any material changes (including changes to the selected Execution Venues and
third-party brokers). Upon request, the Company will demonstrate to its clients that it
has executed their orders in accordance with its Order Execution Policy.
Pursuant to MIFID II, since some transactions are executed outside of the trading venue (i.e. OTC), the Company will monitor and check the fairness of the price by collecting
market data used in the estimation of the price of such products, and in cases that is
possible, compare with comparable or similar products. The determination of the
relevancy of any similar products or markets will be solely at the Company’s discretion,
when assessing and monitoring the fairness of price and may choose different markets
for different products or circumstances.
11. Client Consent
When establishing a business relation with the Client, the Company is required to obtain the Client’s prior consent to this Policy. The Company is also required to obtain the
Client’s prior express consent before it transmits its order for execution outside a
regulated market or an MTF (Multilateral Trading Facility).
The client shall be deemed to have provided such consent to the Order Execution Policy, as in force from time to time, by signing the Agreement or by effecting a transaction
following the receipt of the notice of any amendment of the Order Execution Policy.
12. Publication obligation
The Company will summarize and make public on an annual basis, for each class of financial instruments, the top five execution venues in terms of trading volumes where
they execute orders in the preceding year and information on the quantity of execution
obtained. The publication must be in line with the provisions of the Delegated Regulation
(EU) 2017/576 and includes among others:
- Information on the class of financial instrument;
- Venue name and identifier; and
- Volume of client orders executed on that execution venue expressed as a percentage of total executed volume.
13. Request to demonstrate best execution
Upon reasonable request from a client, and provided that the order was subject to the requirements of this Policy, the Company will demonstrate to the client that it has been
executed its order in accordance with this Policy.
In the absence of evidence, the records of the Company will constitute conclusive evidence to the actions taken by the Company to obtain best execution on behalf of its
clients. The Company keeps records in relation to the best execution requirements,
including records of its trading activities and versions of this Policy, for a period of five
years in accordance with MiFID II.
14. Additional Information regarding this Policy
In case that a retail client requests additional information about this Policy, and the request is reasonable and proportionate, the Company will consider honouring such a
request, especially where such information is requested to enable the client to make a
properly informed decision about whether to utilise (or continue utilising) the services
of the Company.
15. Notification for changes in the Policy
The Company will notify its clients of any amendments of this Policy. A change is considered as material when its disclosure/publication is necessary to enable the client
to make a properly informed decision about whether to continue utilising the services to
Specifically, the Company will consider the materiality of any amendment it makes to the relative importance of the execution factors or the execution venues that it places
significant reliance in meeting the comprehensive best execution requirement.
Annex 1: Relative importance of best execution factors