February 2024
Introduction
The aim of this Best Execution Policy (this “Policy”) is to ensure that Bequant Pro Limited (the “Company”) takes all sufficient steps to obtain, when executing client orders, the best possible result for its clients (the “Client(s)”) in accordance with the Virtual Financial Act (Chapter 590, Laws of Malta), any subsidiary legislation issued thereunder and/or applicable rules, rulebooks or guidelines issued by the Malta Financial Services Authority from time to time (“Applicable Law”). This Policy has been approved by the Board of Directors of the Company (the “Board”).
The Policy applies to both Experienced Investors and Non-Experienced Investors (as defined under Applicable Law) to the extent that the Company is licensed to provide services to both Experienced and Non-Experienced Investors. Unless otherwise stated, this Policy shall apply to Clients in the same way irrespective of whether they are Experienced Investors or Non-Experienced Investors. Currently, the Company is only licensed to provide services to Experienced Investors.
This Policy forms part of the Company’s Terms of Business. By accessing and using the Company’s services, the Clients are deemed to consent to the terms of this Policy.
Execution Factors
Under the Applicable Law, the Company is required to take all sufficient steps to execute orders on the most favourable terms for its Clients by considering certain best execution factors (the “Execution Factors”) namely price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.
In its dealings with Clients, the Company has a general duty to act honestly, fairly and professionally, taking into account the best interests of Clients.
The Company will determine the relative importance of the Execution Factors by using its commercial judgement and experience in the light of the market information available.
A description of the Execution Factors that will be considered is set out below:
Price and Cost – This refers to the total consideration or net cost of the transaction to the Client. The Company checks the fairness of proposed prices by gathering market data used in the estimation of the price and, where possible, by comparing with similar or comparable virtual financial assets (“VFA(s)”) and/or other instruments.
Speed – The Company shall consider: (i) the significance of completing the transaction quickly; and (ii) whether speed is of equivalent importance to, or more important than, achieving the best possible price.
Likelihood of Execution and Settlement – The Company will consider whether the use of a particular execution venue/ entity involves risks that the transaction will not be completed. In such a case, the Company will weigh this risk against the relative costs of the transaction on the chosen venue/ entity in comparison to other execution venues/ entities.
Size – The Company shall consider the size of the transaction. Large orders may have to be dealt with differently to smaller orders, particularly when large orders could have a potential impact on the market and market price for the investment concerned.
Nature – The Company shall consider the nature of the transaction and the type of market in which the VFA/ instruments are traded.
Any other consideration relevant to the Execution of the Orders, which may include but are not limited to low liquidity and/or high volatility.
The Company may, in its absolute discretion and in light of available market information/ conditions at the relevant time, decide that one or more of the Execution Factors listed above are more important and act accordingly.
In certain instances - whether as a result of system failures, disrupted markets or otherwise - it may be necessary to execute orders of Clients in a different manner to that set out in this Policy. In such circumstances, the Company will seek to achieve the best possible result available for the Client under the prevailing conditions.
Whenever there is a specific instruction from the Client, the Company shall execute the order following the specific instruction. The Company shall be deemed to have satisfied its obligations under
this Policy to take all reasonable steps to obtain the best possible result for a Client to the extent that it executes an order or a specific aspect of the order following specific instructions from a Client relating to the order or the specific aspect of the order.
For Non-Experienced Investors, the Company shall, prior to the provision of its services, provide the Non-Experienced Investor with a clear and prominent warning that any specific instructions from that Client may prevent the Company from taking the steps that it has designed and implemented in this Policy to obtain the best possible result for that Client.
Furthermore, in respect of Non-Experienced Investors, the following matters shall also be taken into consideration in order to determine the best possible result:
the total consideration, representing the price of the VFA; and
the costs relating to execution, which shall include expenses incurred by the Company which 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.
In all cases where the Company does not offer smart order routing and offers Direct Market Access (“DMA”) to its clients, the Execution Factors listed above shall not apply. When clients trade via DMA, the Company does not handle and/or transmit and/or execute their orders.
In all cases where the Company enters into a proprietary trade where the order is not executed on behalf of the client, the Company is not subject to best execution obligations. These cases will include the Company’s engagement in proprietary trading by quoting on a request for quote (“RFQ”).
Execution Criteria
The relative importance of the Execution Factors will principally be determined by reference to:
the characteristics of the Client, including the classification as a Non-Experienced Investor or Experienced Investor;
the characteristics of the Client’s order, including the price and volume;
the instruments being dealt in and the liquidity of the underlying market (e.g. for trades outside the normal trading size); and
speed and likelihood of execution.
The orders will be executed/ transmitted at the best available terms on the basis of the information available at the time.
During times of high demand, delays in processing an order may impact the price and speed at which the order is executed/ transmitted. Furthermore, in the case of any communication or technical failure, as well as any incorrect reflection on the quotes feed, the Company reserves the right not to execute an order or change the opening and/or closing price of a particular order.
The above does not apply to trades executed via DMA and/or as a response to RFQ.
Execution Venues
In selecting an execution/ trading venue or exchange, the Company aims to obtain results for its Clients that are (at least) as good as the results that the Clients may reasonably expect from using alternative entities.
The Company would not receive any remuneration, discount or non-monetary benefit for routing client orders to a particular execution/ trading venue or exchange which would be in breach of Applicable Law. Furthermore, the Company would not structure or charge commissions in such a way as to discriminate unfairly between execution/ trading venues or exchanges.
The above does not apply to trades executed via DMA and/or as a response to RFQ.
Specific Client Instructions
A Client may ask for orders to be executed in accordance with specific instructions, either generally or on a case-by-case basis. The Company will accommodate any such requests, if and to the extent possible. Where any specific instructions result in higher costs, the Company may reflect those higher costs in its fees to the Client. In the latter case, the Company will notify the client of any revised fees prior to accepting the order(s). Where the Client’s instructions relate to only part of an order, the Company will continue to apply this Policy to those aspects of the order not covered by the specific instructions.
Clients should be aware that providing specific instructions to the Company in relation to the execution of a particular order may prevent the Company from taking the steps set out in this Policy to obtain the best possible result in respect of the elements covered by those instructions. Where there is a specific instruction from a Client, the Company shall be deemed to have satisfied its obligations to take all reasonable steps to obtain the best possible result for the Client provided that the Company executes the order (or a specific aspect of the order) following the specific instructions.
The above does not apply to trades executed via DMA and/or as a response to RFQ.
Client Order Handling Rules
The Company shall provide for the prompt, fair and expeditious execution of all orders, relative to other client orders or the trading interests of the Company. Furthermore, in terms of Applicable Law, the Company shall not misuse information relating to pending clients’ orders and shall take all reasonable steps to prevent the misuse of such information by any counterparties or any other relevant persons.
If the Company aggregates clients’ orders, it shall carry out the aggregation and execution in accordance with the Order Allocation Policy.
The above does not apply to trades executed via DMA and/or as a response to RFQ.
Given the DMA model, the Company does not have discretion to decide to execute client orders outside a trading platform. If this possibility should become available to the Company, the Company will first ensure that it informs its clients about that possibility and that it obtains express consent of its clients before proceeding to execute their orders outside a trading platform. The said consent might be sought in the form of a general agreement or with respect to individual transactions.
Monitoring
The Company will monitor the effectiveness of this Policy and its implementation in order to identify and correct any deficiencies in its execution arrangements. The Company has a robust governance framework in place to ensure that its best execution obligations are complied with in accordance with Applicable Law.
The above does not apply to trades executed via DMA and/or as a response to RFQ.
Review
The Company will review its order execution arrangements and this Policy at least annually or whenever a material change occurs that affects the Company’s ability to obtain the best result for the execution of orders on a consistent basis.
This Policy is kept under review and accordingly we may update it from time to time to ensure compliance with changes to the rules in force and, if appropriate, to correct any deficiencies or disclose changes in our order execution arrangements. The Company will inform its clients, with whom it has an ongoing relationship, of any material changes to this Policy or its order execution arrangements. Any such changes will come into effect upon approval by the Board and notification to the Clients. .
Consent
The Company is required to obtain the prior consent of each Client to this Policy. By accepting the Company’s Terms and Conditions, the Client will be deemed to have provided such prior consent in respect of the services to be provided by the Company. If a Client makes any reasonable and proportionate requests for information (including additional information about this Policy), the Company shall answer clearly and within a reasonable time.