Introduction

 

We have a general duty to conduct our business with you honestly, fairly, and professionally and to act in your best interests when receiving and transmitting orders. We are required to take all reasonable steps to obtain the best possible result for our clients taking into account factors such as price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to a transmitting an order for execution.

 

 

Does Equitrade Capital Ltd have a duty to provide Best Execution?

 

No. Equitrade Capital Ltd does not deal as Principal and does not ‘execute’ client orders but ‘receives’ and ‘transmits’ orders on behalf of its clients with ‘entities’ also referred to as ‘clearing and executing brokers’ i.e Equitrade Capital Ltd is “Arranging” and not “Executing” the transactions. As a firm that transmits or places orders with other entities for execution, Equitrade Capital Ltd is obliged to provide appropriate information on its policy to its clients. We are still obliged therefore to have a ‘Best Execution Policy’.

 

 

What duties does Equitrade Capital Ltd have in respect of Best Execution under MIFID?

 

In accordance with guidance under MIFID Directive Article 45, Equitrade Capital Ltd has a duty to put in place a policy to identify, in respect of each class of instruments, the entities with which the orders are placed or to which the firm transmits orders for execution.

 

Equitrade Capital Ltd has a duty to ensure that the entity or entities with which it transmits the client orders to, have sufficient systems in place to offer Best Execution and have an Execution Policy.

 

We have a duty to ensure that the entities we use will enable us to comply with the MIFID ‘best execution requirements’ when placing an order with, or transmitting an order to another entity for execution. In order to satisfy this requirement we have carried out reviews of all the entities we use to ensure we are able to comply with our best execution requirements. In carrying out a review of these entities, we have considered the following:

 

(i) Whether the entity itself is subject to the MIFID best execution requirements.

(ii) Whether the entity will undertake by contract to comply with any or all of the MIFID best execution requirements in relation to the relevant business ie. It has contractual responsibilities for best execution.

(iii) Whether the entity can demonstrate that it delivers a high level of execution quality for the kind of orders we are likely to transmit to it.

 

Although we are not obliged to provide you with the review itself, in the spirit of our Treating Customer Fairly policy and by virtue of the firm’s duty to act fairly and professionally, we would consider honouring such a request should it enable you to make a properly informed decision about the firm.

 

If the entities themselves are subject to Article 21 under MIFID, then we are allowed to place a high degree of reliance on the entity in order to comply with its own best execution requirements.

 

 

Selecting the Clearing and Executing Brokers (‘Entities’)

 

Equitrade Capital Ltd considers a number of factors when deciding which entity to introduce your account to. Some of the factors considered when choosing the entities are listed below, but this list is not exhaustive and other factors not listed here may or may not influence the firm’s decision as to where your account is introduced.

 

1. Dealing Platforms
2. Range of Markets
3. Commercial Terms
4. Quality of Service
5. Spreads, Quotes, Quality of IT and Price Systems.
6. Back office, Administration.
7. Approach to Treating Customers Fairly
8. Quality of Execution and ability to maintain good quality best execution requirements.

 

We will have chosen one or more of the entities listed in Section 7.0 to execute orders as our preferred provider and as agreed in writing with you. By choosing an entity to execute our client orders with, we are satisfied that their execution policies will allow them to deliver best execution on your behalf.

 

Once we have chosen an entity to execute your transactions with, we may not have any influence or control over which execution venues they choose, and by entering into a contract directly with that entity you will be deemed to have given consent to their own best execution policy.

 

 

How do we assess whether or not we are acting in the best interests of our clients and/or obtaining the best possible result for our clients?

 

 

Equitrade Capital Ltd has a Treating Customers Fairly policy which, amongst other things, includes regular monitoring of client orders to ensure that the entities are providing good quality best execution and that we are performing our obligations under MIFID Directive Article 45.

 

As receivers and transmitters of orders we must comply with the obligation to act in accordance with the best interests of our clients when transmitting orders to other entities for execution. When we receive and place orders for execution with a third party we have a duty to take all reasonable steps to obtain the best possible result for the client, taking into account the execution factors.

 

The relative importance of these factors must be determined by reference to certain execution criteria to determine the best possible result in terms of the considerations below.

 

Where the chosen entity executes an order, the best possible result must be determined in terms of the total consideration, representing the price of the financial instrument and the costs related to execution, which must 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.

 

In order to assess whether or not we are obtaining the best possible result for our clients, we will also take into account the following criteria to determine the relative importance of the criteria (above):

 

- the characteristics of the client including the categorisation of the client as retail or professional;
- the characteristics of the client order;
- the characteristics of the financial instruments that are the subject of that order;
- the characteristics of the execution venues chosen by the entity to which that order can be directed.

 

If you give us a specific instruction about the way you would like your order executed, you should be aware that this may prevent us or the entity from implementing our policies to obtain the best possible result for our clients.

 

 

Monitoring and review of our Order Execution Policy

 

We will monitor the effectiveness of our order execution arrangements and Order Execution policy in accordance with our own Treating Customers Fairly procedures. We will assess from time to time whether the entities are able to provide best execution and execution arrangement of a suitable quality on a consistent basis or whether we need to make changes to our execution arrangements.

 

We will also review our order execution arrangements and Order Execution Policy in respect of material changes either in respect of one of our chosen entities or otherwise that affects our ability to continue to achieve the best results for our clients. Should there be any material changes to our order execution arrangements or Order Execution Policy, we will notify you.

 

 

List of Clearing and Executing Brokers (‘Entities’)

 

IG Markets
IG Index
MF Global
Direct Sharedeal
GNI Ltd
CMC Markets
Saxo Bank

 

Each of these entities will have their own Best Execution policies containing lists of Execution Venues.

 

 

Your Consent

 

We are required to obtain your prior consent to this policy. By giving us an order to transmit for execution on your behalf, you will be deemed to have given your consent to this policy.