Order Execution Policy

1. Introduction

This order execution policy or Best Execution Policy is applicable to all clients and categories of business conducted by ISEC Wealth Management Ltd.

We manage portfolios of investments on a discretionary basis for managed account clients (“Clients”). The Company is authorised and regulated in Cyprus by the Cyprus Securities and Exchange Commission with Licence Number 356/18 to undertake Portfolio Management Services.

We will take all sufficient steps to obtain the best possible result for our clients by abiding by this policy when executing orders.

This document outlines the Order Execution Policy (“the Policy”) for executing a client order as required.

Aside from the explicit best execution rules explained in this policy, we have an overriding duty to act honestly, fairly and professionally in accordance with the best interests of our clients at all times.

2. Scope

Our Order Execution Policy applies to the execution of orders on behalf of Retail and Professional Clients for the following classes of financial instruments: Equities, Derivatives (both Exchange-traded and OTC, Fixed Income Instruments, Money market and cash instruments, as well as any other financial instruments in which we may execute orders from time to time.

We will always execute client orders as Agent, which we pass on (i.e. transmit) at our discretion to another broker-dealer (‘Third Party’) for execution.

3. Client Orders

These may result from:
A decision by us to deal on behalf of a discretionary client;
Due to the fact that we will be acting as Discretionary Manager the timing of transmitting orders will be at our discretion.

4. Execution Factors

When executing trades on behalf of our clients and the Funds we manage, we place all orders with another entity for it to execute on behalf of the client (e.g. a broker or investment bank). In these instances, Article 24 of MiFID II and Article 65 of the Delegated Regulation will apply. In such scenarios, while we will owe our client a duty of Best Execution, we will also receive a duty of best execution from the third party. We select the brokers that we are satisfied that the can provide the “Best Execution” in accordance with MiFID II regulations and we have established and implemented order execution arrangements that enable us to obtain on a consistent basis the best possible result for our own clients.

Subject to any specific instructions received, we will take the following execution factors into consideration in determining how to obtain the best possible result for the order, namely:

• Price paid for the investment with the HIGH importance as the execution factor
• Costs incurred as a result of the transaction being placed (including clearing and settlement costs) with the HIGH importance as the execution factor
• Speed of the execution and settlement with the HIGH importance as the execution factor
• Likelihood of the order being executed and settled with the MEDIUM importance as the execution factor
• Liquidity in the instrument being traded with the MEDIUM importance as the execution factor
• Size and nature of the transaction with the LOW importance as the execution factor
• Nature of the financial instrument including whether it is executed on a regulated market, multilateral trading facility (MTF), Organised trading facility (OTF), over-the-counter (OTC) or with a Systematic Internaliser (SI) with the LOW importance as the execution factor
• Any other consideration relevant to the execution of the order

In determining the relevant importance of each of the above factors, when executing an order, we will use our commercial judgement, experience in light of current market information as well as the following criteria:

• The characteristics of the client including the categorisation of the client as retail or professional;
• The characteristics of financial instruments that are the subject of that order;
• The characteristics of the execution venues to which that order can be directed and
• The total consideration of the trade (i.e. the price of the financial instrument and the costs related to execution) will be our primary focus for the majority of transactions, although in some circumstances we may determine that other execution factors are more important in obtaining the best possible execution result for our clients.

5. Execution venues

An execution venue is the term used to describe a place, where a client order is executed and includes Regulated Markets, Multi-lateral Trading Facilities (MTF), Organised Trading Facilities (OTF) Systematic Internalisers (SI) and market makers or any other liquidity providers.

We will, in all instances, place client orders with a broker for execution. The broker will choose the execution venue used for a particular trade. In choosing which broker to use, we will take into consideration the following factors relating to that broker:

• Access to alternative markets and trading venues;
• Adequate coverage of asset classes globally;
• Commission rates and prices/spreads provided;
• Execution speed/latency;
• Quality of execution and service, both historical and current;
• Clearing and settlement efficiency and capabilities;
• Risk profile and creditworthiness; and
• Regulatory status and reputation

All brokers are reviewed/assessed on an on-going basis against mentioned above factors in accordance with our obligation to provide the client with the best possible execution results on a consistent basis.

We undertake an annual review of all brokers utilised. This includes assessments of execution quality, service delivery, regulatory status and the financial standing of the firm.

A list of top 5 brokers that we use for execution is published on our website as a part of RTS28 execution quality summary statement annually. An execution venue used for execution of any particular order placed by us in relation to the Client is displayed in the Client Area of our website. The full list of brokers currently used by the Company is published on our website and we reserve the right to change the Brokers we use from time to time, as we deem appropriate, subject to our internal authorisation process and this Policy.

In order to minimise the risk of potential conflicts of interests, we do not receive any form of remuneration, discount or non-monetary benefit for directing orders to a particular venue or broker for execution. The selection of a broker for an order is driven solely by the factors and inputs as described in this Policy.

Where practical, we will look to aggregate purchase or sale orders for the same security or other instrument for multiple accounts so that the clients may be able to benefit from the better prices achieved through the larger bulk transactions in line with our obligation to treat customers fairly. We will aggregate order when we consider doing so appropriate and in the interest of the clients generally and may elect block trade treatment, when available.

Although we may do so in certain circumstances, we do not always aggregate orders for different accounts. If the portfolio management decisions relating to the orders are made by separate portfolio management teams, if aggregating is not appropriate or practicable from our operational or other perspective or if doing so would not be appropriate in light with applicable regulatory considerations.

6. Execution Methodology for Financial Instruments

Equities, Fixed Income & Exchange Traded Funds (ETF’s)

In order to meet these distinct needs of each order, we consider the following factors:

1. Price and liquidity – as a general rule, we will try to identify brokers which are sources of natural liquidity before entering an order into the market; deep liquidity is likely to provide material opportunities which may take the form of a better price and the ability to trade significant additional size at a similar price
2. Speed and likelihood of execution – this is the rate at which we are able to process your order; we will seek a balance between creating market, and thereby potentially moving the price, and executing your order in a timely manner so as to reduce execution risk;
3. Size and nature of the order;
4. Costs - we believe that one of the steps to achieve best execution is equity markets is to negotiate the lowest possible terms for the explicit cost of trading (such as commissions) and minimise the implicit costs (such as market impact and opportunity cost);
5. Likelihood of settlement – our approved broker selection process as described in Section 6 helps us mitigate the credit and settlement risk we may face. We will generally not use a broker if we cannot either settle a transaction or resolve failed settlements.

7. Review of our Execution Policy

We review this execution policy annually, as well as whenever there is a material change that affects its ability to continue to obtain the best possible result for the execution of orders on a consistent basis; we will notify any affected clients of any changes in this policy via an update in the Clients’ Area.

8. Questions on this policy

Should you require any further information and/or have any questions about the order execution policy please direct your request and/or questions to [email protected].