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 executing orders on their behalf in accordance with the Financial Conduct Authority’s (“FCA”) Conduct of Business 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.
When executing Customer orders, TPS will take all sufficient steps to achieve Best Execution, taking into account the execution factors defined under the FCA rules.
This policy is available via the Third Financial website (www.thirdfin.com/Useful Documents) and copies can also be provided to upon request.
What is Best Execution?
Best Execution is the requirement for TPS to take ‘sufficient steps’ to consistently provide its Customers with the best possible overall results when executing 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 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
What criteria are used for assessing the relative importance of the execution factors?
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
Does Best Execution mean that the results received will always be the best price for the trade?
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.
How does TPS treat specific instructions from Customers?
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.
How does TPS prove that orders were dealt with in accordance 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.
How and where will Customer orders be executed?
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||FNZ Respective fund managers||The orders are passed through the FNZ 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 17 Neal’s Yard, London, WC2H 9DP. 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.
[Last revised: 9-Jul-2020]