Under the European Financial Instrument Directive (MiFID) and the national requirements, WH SelfInvest S.A. (hereafter WHS) is required to have an order execution policy in place and to take all reasonable steps to obtain the best possible results for its clients when executing or transmitting client orders.
All client orders are transmitted directly by WHS to selected third parties for execution. These third parties are selected given they have to deliver the best possible result on a consistent basis, as they are themselves submitted to MiFID regulation. We reviewed the best execution policy of these entities and regularly monitor the client order execution to ensure policy compliance. All client orders are transmitted on an individual basis to the selected third parties.
For retail clients, execution price and cost are the most important factors for best execution, although other factors have to be taken into account if significant to obtain the best price and cost.
Client orders are received, accepted and directly transmitted by WH SelfInvest S.A., the owner of the Freestoxx brand and the provider of the service with the same name. The orders are transmitted on an individual basis and without alteration. The orders are not subjected to any form of internal matching prior to their transmission.
All client orders for stocks and options quoted in the United States are transmitted to Vision Financial Markets (Vision) for execution. Vision, as a broker-dealer, as well as any subsequent third party Vision decides to use, is bound by the US equivalent of MiFID, the Regulation National Market System (Reg NMS). The Reg NMS is a financial regulation promulgated and described by the United States regulator, the Securities and Exchange Commission (SEC).
The SEC's Reg NMS requires brokers to trade at the best available bid and ask price when selling and buying securities for clients and to guarantee at least the National Best Bid and Offer (NBBO) quoted price to its clients at the time of a trade execution.
The NBBO is a quote feed that reports the highest bid price and lowest ask (offered) price in a security, sourced from among all available exchanges and trading venues. The consolidated NBBO, therefore, represents the tightest composite bid-ask spread in a security.
The service seeks out the best price, whether that price is displayed on the Nasdaq, NYSE, or any another venue. Any orders that are executed internally, are filled at a price at or better than the consolidated NBBO. Those fills are communicated to the marketplace via a tape reporting facility (TRF) sponsored by NYSE or Nasdaq.
The SEC recognizes that obtaining the best bid or best ask may not fully satisfy a firm's best execution obligation. Brokers-dealers may include other factors such as (1) the size and the type of the order; (2) the trading characteristics of the security involved; (3) the availability of accurate information affecting choices as to the most favorable market center for execution and the availability of technological aids to process such information; and (4) the cost and difficulty associated with achieving an execution in a particular market center. Essentially, the requirements are that orders are routed to the venue that provides the best combination of price, speed, execution rate, etc for the given order characteristics (order type and size). This approach is referred to as smart order routing, whereby the NBBO remains the essential, but not the sole, focus.
The Freestoxx service also allows clients the possibility to provide specific instructions as to the execution of orders. Clients can provide the instruction to route an order in its entirety with priority to the New York Stock Exchange (NYSE) family of exchanges or the National Association of Securities Dealers Automated Quotations system (Nasdaq). These orders will be executed at the speed and at the best bid and ask prices available on these markets only. If best execution is not possible orders will be subsequently routed to other listed exchanges. If best conditions, price and liquidity, can only be found outside Exchange routes, order will be subsequently routed to brokers or alternative trading systems (ATS).
On a regular basis –at least annually– WHS will monitor the effectiveness and the quality of the best execution policy. In case of any significant change in the execution arrangements, the present document will be updated.
Before using our financial investment services, you have to provide us with your consent. This consent is provided by signing the general terms and conditions referring to this best execution policy and by instructing us to transmit your orders for execution on your behalf.