1. Purpose
1.1 This Appendix to the Order Execution Policy summarises the arrangements put in place by the Manager under the FCA Rules and MiFID to meet its obligation to take all reasonable steps to obtain the best possible result when executing orders in financial instruments on behalf of clients.
1.2 The duty of best execution is owed by the Manager to a client only when the Manager has a contractual or agency obligation to the client.
2. Execution Factors and Execution Criteria
2.1 In meeting the Manager’s best execution obligation to the Investor, it will take into account the following execution factors: price, costs, speed, likelihood of execution and settlement, size, nature, or any other consideration relevant to the execution of the order.
2.2 Additionally, when executing a client order, the following best execution criteria will be taken into account when determining the importance of the execution factors, which are the characteristics of: the client (including their categorisation as a Retail or Professional Client by the Manager for the purposes of the services provided by it to them in connection with the management of the Investment Portfolio); the client order; the financial instruments that are the subject of the order; and the execution venues to which the order can be directed (where relevant).
3. The Role of Price When Obtaining Best Execution
3.1 Where the price of a financial instrument is not otherwise determined by the terms of this Agreement (such as the price of an Ownership Interest being calculated by reference to the applicable Net Asset Value of the Trading Business) the best possible result will always be determined in the terms of the “Total Consideration”. The Total Consideration represents:
(a) The price of the financial instrument; and
(b) The costs related to execution, which will include any expenses incurred by the Investor, which are directly related to the execution of the Investor’s order. This can include:
(i) execution venue fees;
(ii) clearing and settlement fees; and
(iii) any other fees paid to third parties involved in the execution of the order.
3.2 Therefore, when dealing with the Investor or on the Investor’s behalf, obtaining the best result in terms of Total Consideration will take precedence over the other execution factors listed in paragraph 2.1 above, and the other execution factors will only be given precedence over the immediate price and cost consideration insofar as they are instrumental in delivering the best possible result in terms of the Total Consideration to the Investor.
4. Execution Venues
4.1 Where the value or price of an interest is not otherwise determined by the terms of this Agreement (such as the value or price of an Ownership Interest being calculated by reference to the applicable Net Asset Value of Trading Business), transactions in limited liability partnership interests will be effected on the best commercial terms that can be secured and such transactions will be in transferable securities, which are not admitted to trading on a Regulated Market or multi-lateral trading facility (MTF).
4.2 The Manager considers that it will be demonstrated that all reasonable steps have been taken to obtain the best possible result when executing a client order in an unlisted security where this is in accordance with:
(a) The objectives of the Investment funds available, as detailed in the Brochure; and
(b) The factors set out in Clause 14.
4.3 Pending the acquisition of Ownership Interest, the Manager may invest in government securities or in other investments it considers to be of a similar risk profile. In order to execute and order in a financial instrument admitted to trading on a regulated market, the Manager will transmit the order to a broker for execution, typically a Member of the London Stock Exchange. Such a firm will have its own Order Execution Policy in respect of its obligation to obtain the best possible result when executing orders, which the Manager will have consented to. The Manager will place reliance on the Policy of the executing broker to ensure that the best possible result is obtained for the client in this type of scenario.
4.4 The Manager remains responsible for the execution of any transactions on the Investor’s behalf. Where an order is transmitted by the Manager to a third party to execute on the Investor’s behalf, the Manager, and not the Investor, will be the client of that third party. In respect of such transactions, the execution venue(s) used may include from time to time those which are not a Regulated Market of MTF. Regarding a trade for units in a Trading Business, the venue will be the Service Manager or the Service itself.
5. Demonstration of Best Execution
5.1 On request from a client, the Manager will, as soon as reasonably practicable following such a request, demonstrate that orders have been executed in accordance with this policy.
6. Review of this Policy
6.1 The Manager will review the effectiveness of this policy at least on an annual basis. Clients will be notified of any material changes.
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