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Regulated by the Cyprus Securities and Exchange Commission
Authorisation № 162/12
ORDER EXECUTION POLICY
LIMASSOL
Approved by the Board of Directors
On 15 May 2012
NBI Investments Limited («NBI», «the Company») is a Cypriot Investment Firm established in
accordance with the laws of the Republic of Cyprus and regulated by the Cyprus Securities and Exchange
Commission.
«Order Execution Policy» (the «Policy») of NBI is a document which lays down basic principles of handling
and execution of Client Orders and sets the system of execution arrangements to obtain best possible
result for Clients on consistent basis.
Order Execution Policy is referred to in internal documents of NBI also as «Best Execution Policy».
The Policy is drafted in accordance with requirements of the legislation of the Cyprus Securities and
Exchange Commission and other competent authorities of European Union.
All terms and definitions stated in this document shall have the meanings assigned to them by relevant
legislative acts of the Republic of Cyprus and European Union, except as expressly provided otherwise.
It should be noted that that this Policy applies if the Client has been categorized as Retail Client or
Professional Client. In case of aggregation of orders, retail clients have priority over professional clients.
The Policy is designed for review and examination by Clients before and in the course of provision of
investment and/or ancillary services and activities to Clients.
Potential or existing Client of the Company provides its express consent to the terms of the Policy by
accessing and reading this document. Current version of the Policy is placed on the website of NBI at
http://www.nbinvest.com
The Company shall notify its Clients of any material change to this Policy by posting an updated version of
this document on the website, however, the Clients would not be expressly notified of any such changes.
Therefore, it is highly recommended to refer to the current versions of the Policy and other applicable
documents regularly.
APPLICABILITY AND EXEMPTIONS
This Policy applies when NBI
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Receives and transmits Orders on behalf of the Client, or
Executes Orders on behalf of the Client.
Exemptions from provision of best execution:
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Eligible Counterparties. If the Client is classified as Eligible Counterparty, the Client is be entitled to best
execution.
Specific Instructions. If the Client provides specific instructions in relation to its Order or any part of it,
and NBI acts upon these instructions, NBI is considered to comply with its obligations to provide best
possible results to the extent those instructions are followed.
ORDER EXECUTION
When determining the strategy for execution of Client Orders, NBI takes into consideration certain factors,
which may have different importance in the context of the terms of the Orders:
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Price of the Financial Instrument,
Costs associated with executing the Order,
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The need for timely execution,
Probability of execution and settlement of the Order,
Liquidity or illiquidity of the market,
Size and type of the Order,
Price Volatility
All other aspects relevant to achieving best possible results when executing the Order.
For Retail Clients NBI takes into account the total consideration when selecting possibilities to execute the
Order. The total consideration also comprises, in addition to the price of the Financial Instrument, the costs
associated with executing the Order, for example, expenses which are directly related to the execution of
Order, including execution venue fees, clearing and settlement fees as well as other fees paid to third
parties participating in the execution of the Order.
Subject to any specific Client instruction, NBI will exercise discretion, based on market experience,
knowledge, commercial judgment, category of the Client, characteristics of the execution venue, the
relevant Financial Instrument and the type of the Client Order to obtain best possible execution result.
Taking into account the factors of volume and price of certain Client Orders, NBI may aggregate such
transactions and such Orders for execution. Such aggregation is permissible if possible overall
disadvantage to the Client is eliminated, except certain cases where the effect of aggregation may work to
Client’s disadvantage in relation to the particular order, and it is not possible to eliminate the disadvantage.
Certain non-EU Regulated Markets and Multi-Lateral Trading Facilities, to which Client Orders can be
placed for the execution (specifically, markets of securities in Russian Federation), do not always provide
possibility of executing the Order within such market in strict accordance with the conditions of the Order (in
case the certain execution venue was indicated in the Order). Such situation could necessitate the
execution of the Order outside this Regulated Market directly with the counterparty, thus letting the
Company to fulfill the «best execution» criteria more precisely. execution of the Order outside Regulated
Markets or MTFs requires the client’s consent which may be granted by the client through the agreement
with NBI.
In cases described in paragraph above the orders are executed considering various execution factors as
appropriate to the case, the total consideration being of the higher importance among those, and all
reasonable steps are taken in order to achieve best execution of this order.
Nothing in this Policy should be taken to imply that NBI acts as either a Systematic Internaliser or an MTF
(Multi-Lateral Trading Facility).
BASIC PRINCIPALS
Receiving and transmitting Orders in relation to Financial Instruments for execution on behalf of the Client,
the Company takes all reasonable steps to achieve best execution. NBI applies procedures designed to
obtain best possible results for execution of Client Orders on consistent basis, taking into account the
nature of the Orders, the priorities that the Client may place upon the Company in execution of those
Orders and the nature of relevant markets.
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Price will generally have relatively high importance in terms of best execution. However, in some
circumstances NBI may appropriately determine that some execution factors are more important than price
in order to obtain best possible execution results for the Client. For example, there is no formalized market
or settlement infrastructure for some over-the-counter transactions, in some markets price volatility may
mean that the timeliness of execution is a priority, whereas on illiquid market the fact of execution may by
itself constitute best execution.
The Company endeavors to achieve best balance across a range of sometimes conflicting factors. This
does not mean achieving best price for every Client Order, but rather best possible result that the Company
can reasonably be expected to achieve with the resources available to it.
In the absence of specific instructions from the Client, NBI will exercise the judgment, skill and experience
having regard to available market information, when determining the factors that are required to be taken
into account for the purpose of providing the Client with best execution.
The Company’s commitment to provide the Client with best execution does not mean that NBI owes its
Clients any fiduciary or other duties over and above the specific regulatory obligations placed upon the
Company or as may be otherwise agreed between NBI and the Client.
TRANSMISSION OF ORDERS AND EXECUTION VENUES
Subject to any instructions that may be given by the Client, one or more execution venues may be used to
enable the Company to obtain best possible result on a consistent basis when executing the Order. These
venues include Regulated Markets and Multi-Lateral Trading Facilities (or non-EU entities performing
similar functions, specifically Securities and Currency Exchanges of Russian Federation), third party
investment firms and brokers (or non-EU entities performing similar functions).
Client orders may also be executed over-the counter provided the client gave its express prior consent to
that.
Preference to venue may be determined by availability of only one market or platform where an Order can
be executed because of the nature of the Order, the nature of Financial Instrument or specific requirements
of the Client.
NBI selects execution venues which enable to obtain on consistent basis best possible result for execution
of client orders. NBI transmits client orders in respect of financial Instruments to on-exchange execution via
following entities (referred to as “Upper brokers”):
Open Joint-Stock Company "NOMOS-BANK",
Otkritie Securities Limited.
NBI may also transmit orders to exchanges via direct market access connectivity provided by the Upper
brokers.
Receiving orders from the Clients and transmitting those Orders to the Upper brokers for execution, the
Company takes all reasonable steps to achieve best results, taking into account the factors specified above
and any specific instructions received as part of the order, where applicable.
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Determining the strategy for obtaining best result for the orders, in the absence of specific instructions, the
Company considers where it is reasonable to simply transmit the order to Upper broker or whether it is
necessary to exercise additional control when instructing the Upper broker in relation to the Order.
NBI monitors regularly efficient implementation of its order execution arrangements and this Policy to
identify and, where appropriate, correct any deficiencies. The Company assesses whether the Upper
brokers allow to achieve best execution on consistent basis or whether the Company needs to make
changes to its execution arrangements.
SPECIFIC INSTRUCTIONS OF THE CLIENT AND ALTERNATIVE TYPES OF ORDERS
Where the Client provides a specific instruction in relation to its entire Order, or any particular aspect of the
Order, including an instruction for the order to be executed on a particular venue, the Company will execute
the Order according to these instructions. However, in following these specific instructions, NBI will be
deemed to have taken all reasonable steps to provide best possible results for the Client in respect of its
Order, or aspect of the Order, covered by the specific instructions.
In the event a Client Order is transmitted for execution to Upper broker, NBI will take into account special
instructions of the Client, taking all measures necessary to achieve best possible results.
Given the risks that arise when trading in volatile markets, the client shall consider using different types of
orders to limit risk and manage investment strategies.
Market order. This is the simplest type of order, when the Client instructs the Company to execute a trade
of a certain size as promptly as possible at the prevailing price. The Company is required to execute market
orders without regard to price changes. Therefore, if the market price moves significantly during the time it
takes to fill the Client’s order, the order will most likely be exposed to the risks outlined above, including
execution at a price substantially different from the price when the order was entered.
Limit order. With a limit order, the Client sets the maximum purchase price, or minimum sale price, at which
the trade is to be executed. If the market moves significantly away from this price, the order will not be
executed unless the market price returns to the limit price. Thus, the Client may not receive an execution of
the order.
Good Till Cancelled order (“GTC”) means an order that is valid until filled or cancelled.
Stop order. This type of order is held, and when the stopped price is reached, it is automatically sent for
execution as a market order at the price then prevailing.
Stop limit order. This is similar to a limit order, except that the order is held until the market reaches the
“stopped” price, at which the order may be executed as a limit order.
DISCLOSURES OF INFORMATION
In the case of a Client limit order in respect of shares admitted to trading on a regulated market which is not
immediately executed under prevailing market conditions, NBI will, unless the Client expressly instructs
otherwise, take measures to facilitate the earliest possible execution of that order by making public
immediately that limit order in a manner which is easily accessible to other market participants.
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This obligation will be treated as satisfied where NBI transmits the client limit order for execution to a
regulated market or/and MTF.
Where NBI, acting on behalf of its Clients, concludes transactions in shares admitted to trading on a
regulated market outside a regulated market or Multilateral Trading Facility, it will make public the volume
and price of those transactions and the time at which they were concluded. This information will be made
public as close to real time as possible, on a reasonable commercial basis, and in a manner which is easily
accessible to other market participants.
APPROPRIATENESS
Providing Investment Services such as Transmission and Execution of Orders, the Company will assess
whether the investment service is appropriate for the Client basing on its knowledge and experience in the
investment field relevant to the specific type of product or service offered or demanded.
CONCLUSION
NBI encourages the Clients, before placing orders, to give careful thought to how the risks previously
described may affect investment in volatile markets. There are several internet resources available to help
explain these and other risks in greater detail, including the web site of Cyprus Securities and Exchange
Commission (www.cysec.gov.cy). You should also consider how different types of orders might help
manage some of these risks.
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