Introduction and Overview
This Order Execution Policy provides Customers with the information they need in order to understand how Third Platform Services Limited (“TPS”) will seek to obtain the best possible results (“Best Execution”) when orders are executed on their behalf in accordance with the Financial Conduct Authority’s (“FCA”) Conduct of Business Sourcebook (COBS) rules.
For the purposes of this policy, TPS’ Customers are categorised as Professional Clients, who may themselves be acting on behalf of clients they have categorised as Retail Clients. TPS has no direct Best Execution obligation to such retail clients as that responsibility resides with its Customers. However, through TPS’ commitment to obtaining Best Execution for its Customers, the underlying retail clients of such Customers also benefit under this policy.
TPS will both execute trades directly or place orders with another entity for it to execute on its behalf. Execution is where an order is executed directly against an execution venue, a market maker or other liquidity provider. In such instances TPS will not receive a duty of best execution from the venue, but will owe a duty of best execution to Customers. Placing an order is where the order is placed with another entity for that entity to execute, such as a broker or a group dealing desk. In such instances the entity will owe TPS and its Customers a duty of best execution. In both instances TPS will take all sufficient steps to achieve Best Execution, taking into account the execution factors defined under the FCA rules. As a firm authorised and regulated by the Financial Conduct Authority (FCA) TPS is required, when executing orders on behalf of clients, to take sufficient steps in order to obtain the best possible results.
TPS’s general procedure for order handling is set out in accordance with the FCA’s Client Order Handling Rules as detailed in COBS 11.3 of the FCA Handbook with the ultimate aim of providing the prompt, fair and expeditious execution of client orders.
Given the nature of its business, TPS may aggregate orders for Customers. By aggregating orders customers may be able to benefit from better prices achieved through larger, bulk transactions and although this may not necessarily happen, the aggregation is unlikely to work to the overall disadvantage of any client whose order is aggregated.
Best Execution is the requirement for TPS to take ‘sufficient steps’ to consistently provide its Customers with the best possible overall results when executing or placing orders on their behalf. To do this, TPS will take into account those execution factors specified below that are considered to be relevant to the execution of a Customer’s order. The importance that is placed on these execution factors depends on the characteristics of the Customer, the nature of the order, the financial instrument concerned and the execution venue on which the order is effected.
The execution factors that TPS considers when executing Customer orders are:
- The price of the financial instrument;
- The costs related to execution;
- The timing and speed of settlement;
- The likelihood of execution and settlement;
- The size of the order;
- The nature of the order; and
- Any other consideration relevant to the execution of an order
TPS will take into account the following criteria for determining the relative importance of the execution factors:
- The characteristics of the Customer, including their categorisation as a Professional Client;
- The characteristics of the Customer’s order;
- The characteristics of the financial instruments that are the subject of the order; and
- The characteristics of the execution venues to which that order can be directed
Determining Best Execution
Ordinarily, price and overall costs for transacting the deal will merit a high importance in obtaining the best result for a Customer’s order. However, in some circumstances, TPS may determine that other factors listed above may be more important in determining the best outcome for the order. TPS will exercise its own discretion in determining these factors.
In relation to Professional Clients, TPS will apply Best Execution where an agency or contractual obligation is owed and also in circumstances where it can be demonstrated that the Customer is legitimately relying on TPS in relation to the execution of their order. The importance of the execution factors will be weighed according to the product involved.
Specific Customer Instructions
Whenever TPS receives a specific instruction from a Customer in relation to an order, the order will be carried out in accordance with that specific instruction and, in so doing, TPS will be deemed to have complied with its obligation to obtain the best possible result for the Customer. However, please note that by acting on a specific instruction, TPS may be prevented from executing the order in accordance with the Order Execution Policy.
Complying with the Order Execution Policy
TPS monitors all of its trades to check that they are placed in accordance with the Order Execution Policy. Although such monitoring arrangements are strongly focussed on price they will also consider the speed and likelihood of execution (such as fill rate), the availability and incidence of price improvement, and implicit as well as explicit costs.
TPS also undertakes an annual review of its Order Execution Policy and order execution arrangements. The policy will also be reviewed and revised should any material change occur that affects the order execution arrangements and these will be communicated to Customers via the TPS website.
When TPS carries out Customer’s instructions, a range of execution venues are used depending on the financial instruments involved. The list below is not exhaustive but comprises those venues which have been selected in order to obtain, on a consistent basis, the best possible result for the execution of Customer orders. TPS reserves the right to use other venues and third parties where it has been deemed appropriate in accordance with the Order Execution Policy and venues may be added or removed from the list.
|Financial Instrument||Execution Venue||Selection Rationale|
|UK equities, ETFs, government and corporate bonds||London Stock Exchange||Primary venue - deals are usually passed through the Fidessa electronic order routing system which is designed to review and trade at the best price available. If the order cannot be executed in this way, TPS will seek to place the order directly with a market maker who will be selected based on their ability to achieve the best overall outcome for the order.|
|International equities and bonds||Various depending on country||TPS will place orders directly with selected third party brokers who will route orders to the venues that offer the best price and liquidity.|
|Unit trusts and OEICs||Aegon Respective fund managers||The orders are passed through the Aegon electronic system or placed directly with the fund manager.|
Under FCA rules, TPS is required to obtain prior express consent from Customers to execute orders away from a trading venue for an instrument that is ordinarily traded on a trading venue.
Third Platform Services Limited is a private limited company, registered in England and Wales under No. 09588254, registered office Birchin Court, 20 Birchin Lane, London, EC3V 9DU. Third Platform Services Limited is authorised and regulated by the Financial Conduct Authority (FCA), 12 Endeavour Square, London, E20 1JN (Firm reference number 717915), and is a member of the London Stock Exchange.