Overview of Best Execution requirement
Hantec Markets Limited is authorised and regulated by the UK Financial Conduct Authority (FCA) and under the FCA rules, we are obliged to act honestly, fairly and professionally in accordance with our clients’ best interests and, other than in certain circumstances described below, where we execute or arrange the execution of orders, we are required to take all sufficient steps to obtain the best possible result for our clients (known as delivering ‘’best execution’’) on an on-going basis.
We have internal policies and procedures that govern how we act when executing orders for our clients that enable a timely detection of any potential deficiencies. We continually strive to provide the best possible level of service to all of our clients. Consequently, the execution quality, as well as quality and appropriateness of our execution arrangements and policies are under constant review to identify circumstances under which changes may be appropriate.
This Policy applies only to clients classified by us as Retail or Professional Clients, and to certain types of transactions in ‘financial instruments’. Financial instruments is a term defined under MiFID II and the rules of the FCA and includes, but is not limited to, financial contracts for differences (CFDs), transferable securities, money market instruments and units in collective investment schemes. It does not include, for example, spot FX and cash deposits (not structured). The Policy does not apply to business conducted with clients who we have categorised as Eligible Counterparties; accordingly, we will not owe duty of best execution for transactions entered into with Eligible Counterparties. However we will comply with this policy in relation to Eligible Counterparty Business and maintain records of data which are used to set our prices.
For the purposes of orders for the financial instruments provided by us, we deal with clients as principal and not as agent. This means that by virtue of the agreement we are the sole counterparty to clients’ trades and therefore clients transact directly with us and not on an exchange or another external market. Although we may transmit orders for execution to third party liquidity providers via our electronic platform, we are the sole execution venue for the execution of client orders. Trades that clients undertake with us are non-transferable, which means that if a client opens a position with us, they must close the position with us.
We have a robust liquidity provider selection process based on a number of factors to ensure that we are achieving the best possible result for our clients.
Where we have determined that we owe you a duty of best execution in relation to a transaction we will, in accordance with this policy, take all sufficient steps to obtain the best possible result for you in relation to that transaction.
In the absence of any specific instructions from a client, we will take into account, if relevant, the following factors (“execution factors”):
The Price – While we always aim to act in the best interest of our clients we cannot guarantee that the price at which we permit clients to execute a trade will be better than elsewhere. Prices on leveraged products are sourced from independent third party providers who supply liquidity to the market.
The Cost – We add a mark-up to the prices from our liquidity providers and publish the ‘’marked-up’’ prices that include our income.
Speed and Likelihood of Execution – Trades may be executed on our electronic platform or by telephone. Screen and telephone trades are subject to liquidity and market conditions and so we cannot guarantee that a client’s trade will be open or closed instantaneously. The speed and likelihood of execution is also subject to software, hardware and telecom/data line use and we cannot guarantee that this will not be free of interruption of suspension.
Quantity – We set the minimum and maximum quantity that clients may place on a trade. This is influenced by market conditions and firm policy, and changes from time to time.
When arranging a transaction or executing a client order, we will consider the following criteria for determining the relative importance of the execution factors referred to above:
Dealing with Client Orders
Subject to market conditions a client order will be executed at our price or very close to our price. The price clients receive at execution is not guaranteed as the market may widen, become very volatile or even gap. There is no guarantee that a client’s order will be executed.
Where we owe a client a duty of Best Execution and a client provides us with specific instructions in relation to the entire transaction, or any particular aspect of the transaction, which we accept, then we will execute the transaction in accordance with those instructions and in doing so we will have satisfied our best execution obligations with respect to the relevant aspects of the transaction. It should be noted that we are not obliged to accept specific instructions on the entire, or any particular aspect of the transaction.
Where client’s instructions relate to only part of the transaction, the remaining element of the transaction not covered by client’s specific instructions will remain subject to Best Execution requirements. It must be noted that when providing us with specific instructions this may change the way in which client’s transactions are executed and may prevent us from taking the steps that we have designed and implemented in the policy to obtain the best possible result for the execution of in scope transactions.
This may result in a different outcome that would have been achieved had our normal policies and procedures been followed and, for Retail Clients and Professional Clients, we will not be required to deliver best execution in respect of the aspects of a client order which are covered by their specific instructions. Our normal policies and procedures take account of the costs that we would incur in transacting business. Transactions may be subject to additional charges. Where this applies, we will notify clients of the applicable charges before their order is executed.
Our Duty of Best Execution
When executing orders for all the instruments we offer, we will take all sufficient steps to achieve the best possible outcome taking into account our Execution Policy and any specific instructions received from our clients.
Our policy cannot provide a guarantee, however, that the price at which we permit our customers to execute an order will always be better than one which is or might have been available elsewhere.
Achieving ‘Best Execution’
To achieve the best possible result, we will take a number of factors into account, including price, costs, speed of execution, likelihood of execution and settlement, size, nature of the order or any other factors relevant to the execution of that order.
We will use our own commercial experience and judgment in determining the relative importance of these factors, however, we have rated prices as the most important factor for obtaining the best possible result.
If we have classified a client as a Professional Client we will consider relevant FCA guidance to determine whether we are acting on behalf of a client and whether a client is placing a legitimate reliance on us for best execution by considering the following factors:
– Which party initiated the transaction;
– Questions of market practice and the existence of a convention to ‘shop around’;
-The relative levels of price transparency within a market; and
-The information provided by us and any agreement reached.
We understand that as a Professional client, a client may be relying upon us to deliver best execution and we will therefore execute the client’s order in line with this policy. In certain circumstances our determination of the relative importance of execution factors may differ from Retail client’s, including, for example, where the likelihood of execution may take precedence over price.
If we have classified a client as an Eligible Counterparty, there is no requirement under the FCA rules for us to deliver best execution to them. However, we will comply with this policy in relation to Eligible Counterparty Business and maintain records of data which are used to set our prices.
We will review this policy at regular intervals and will monitor and review external pricing sources.
Should there be any material changes to our order execution arrangements or order execution policy, we will give clients 14 days written notice and the client disclosure relating to this policy on our website.
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