Order Execution Policy

Order Execution Policy

Introduction

The Markets in Financial Instruments Directive (MiFID), a European directive which aims to harmonise the operation of financial markets across Europe, requires that we provide clients with information concerning our execution policies in respect of transactions we undertake on your behalf. This document sets out Beaufort Securities Limited (‘Beaufort Securities’)’s policy and should be read in conjunction with our Terms of Business.

Your Consent

When, having been provided with a copy of this document or having had the opportunity to review it on our website, you give us an order to execute a transaction on your behalf you will be deemed to have given your consent for your orders to be undertaken in accordance with this Policy.

Achieving Best Execution

We will take all reasonable steps to obtain the best possible result, when executing your order. To achieve Best Execution of your order we will use our own commercial experience and judgment to determine the relative importance of a number of factors including price, costs, speed and likelihood of execution, settlement, size and any other factors relevant to the execution of your order together with the possible execution venues to which the order can be directed.

We will assume that the best available price at the time is the most important outcome for your transaction unless you specify at the time of dealing that another factor is of greater importance.

To calculate the price, we will determine the total consideration. This is represented by the price of the financial instrument and all expenses that 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.

Specific Instructions

If you provide us with a specific instruction to deal for you it may prevent us from following our Order Execution Policy which is designed to get the best overall result for the execution of orders on a consistent basis.

Execution Venues

We are a member of the London Stock Exchange (‘LSE’), ISDX (‘ISDX’) and GXG Markets (‘GXG’) which we consider to be the most significant execution venues for execution of your order. All of your orders, except those in Unit Trusts and OEICS international securities, will be transacted on and reported to LSE, ISDX or GXG, which operate regulated markets (‘on-market’) and will be subject to the rules and regulations of that market. In the event that your order cannot be executed on-market, we will endeavour to execute it off-market where possible.To the best of our ability we will not, without your specific consent, execute transactions in shares that are capable of being executed on a Regulated market or MTF, away from these venues. These are known as Over The Counter (OTC) trades. We will, however, on occasion offer clients the opportunity to participate in transactions where Beaufort Securities is acting as principal. These transactions will be offered at or less than the closing offer price available on the relevant Regulated Market or MTF or the prevailing offer price at the time when Beaufort Securities no longer has a position, whichever is the earlier. Thus a client will not purchase principal shares at a worse price on the day than would have been available on the relevant market.

Where available we may cross a client’s order with that of another opposing client.

Order Execution

For online orders, we are currently connected electronically to a wide range of Retail Service Providers (RSP) who are market makers and liquidity providers in a range of instrument types. When an order is received our system will request a price from all RSPs offering a price in the requested security and will select the best price returned and complete the order following confirmation from our customer. In the event that an order cannot be executed online it will be routed to a dealer who will negotiate the price with a market maker by telephone with reference to any available electronically displayed prices. We believe that these execution methods ensure that we take all reasonable steps to meet our Best Execution obligations.

International Securities

When trading in International Securities, the execution of your order could be restricted only to those market makers that are able to provide the settlement arrangements and foreign currency conversion that we require to complete the order. In such circumstances Best Execution is achieved by reference to the prices provided by these market makers and any available published local market price information.

Order Timings and priority

To achieve timely execution, once we have agreed to execute your order, we will do so as soon as reasonably practicable, unless we have taken reasonable steps to ensure that postponing the execution the order is in your best interests. Customer orders will normally be executed in the same order as they are received, except where there are special conditions, such as price limits or limited liquidity, where such conditions might require extra time to ensure we achieve Best Execution.

Order Types

We will accept the following order types from you and details will be confirmed on the contract note.

  • At Best - Execute immediately at the best available price
  • At Limit - Execute at, or better than, a specified minimum price for sales or a maximum price for purchases
  • Stop Loss - Sell should the price fall to within a specified price band
  • Rising Buy - Purchase if the price rises to within a specified price band.

For limit orders where we cannot execute the order immediately we will confirm to the customer the limit conditions as we understand them and the period during which our systems will monitor market conditions in order to be able to effect execution as soon as possible.

Limit Orders

We are required to publish unexecuted At Limit orders in order that they may be visible to other market participants unless you give us express consent not to do so. Therefore by placing a limit order for us to monitor and execute on your behalf if market conditions are met, you will be deemed to have given consent for all of your limit orders not to be published.

Advisory clients will be able to place limit orders in the market only. These orders will either be left with the market to execute and will be generally ‘good till dealt’ or ‘good for the day’ or will be placed on an electronic trading facility of the Regulated Market.

Order Allocation

In the event that your order forms part of an aggregated order, we will usually allocate on a pro rata basis any partially completed orders that are received from different customers in the same security. If this allocation would result in any customer detriment, we may allocate other than on a pro rata basis. In every instance that an allocation other than pro rata is used we will take reasonable steps to ensure that any allocation is in the best interests of all customers concerned.

Best Execution Monitoring

We monitor our effectiveness in achieving Best Execution of your orders on a regular basis by comparing a representative sample of our executed trades against similar orders executed by other firms using data provided by the relevant exchanges or market data vendors.

Policy Review

This Policy is reviewed at least annually or at any other time when there is any material change to our arrangements. We will notify you of any material change to our execution arrangements or our Policy by providing you with an updated version of this document either in writing or by publishing it on our website.

July 2014