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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 Receives and transmits Orders on behalf of the Client, or Executes Orders on behalf of the Client. Exemptions from provision of best execution: 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: Price of the Financial Instrument, Costs associated with executing the Order, 1 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. 2 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. 3 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. 4 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. 5