Execution policy

1. Best execution

MiFID II regulations (articles 64, 65, and 66 of the Delegated Regulation 2017/565 of 25 April 2016; article 27 of the Directive 2014/65/UE of 15 May 2014 transposed into French law by ordinance no. 2016-827 of 23 June 2016), require that investment firms to take all sufficient steps to obtain, when executing orders, the best possible result for their clients.

In accordance with this regulation, the best possible result is assessed in the light of seven large categories of criteria: “the price, the cost, the speed, the probability of execution and settlement, the size and the nature of the order, and finally any other consideration relating to the order”.

The best execution obligation is a best-effort obligation and not an absolute requirement.

2. Clients concerned

When a relationship is first established, all new clients of Gilbert Dupont are informed of the MIF classification that will be applied to them: eligible counterparty, professional client, or non professional client.

The execution policy implemented by Gilbert Dupont applies to its professional clients and non- professional clients; in principle, it is not applicable to the transactions of eligible counterparties.

The best execution criteria can vary according to the client categories; in particular, we make a distinction between the criteria applicable to orders from clients termed “institutional clients” and clients termed “individual investors”.

3. Execution venues

 

As defined by the Directive 2014/65/UE (commonly referred to as MiFID II), an execution venue is a regulated market (RM), a multilateral trading facility (MTF), or an organised trading facility (OTF).

Gilbert Dupont places orders on the execution venue that appears the most appropriate in relation to the execution criteria employed.

In the event that the Brokerage Firm does not have direct access to an execution venue considered to be essential to the handling of an order, it will be able to transmit this order to a third-party investment services company with which it has established a specific agreement. In this situation,
Gilbert Dupont still has the duty to implement and to maintain a policy of selection of the market members.

The list of execution venues that are available to Gilbert Dupont is presented in annex 1. The Brokerage Firm reserves the right to use other execution venues when it considers that the latter are necessary to fulfil its best execution policy. In the event that Gilbert Dupont uses a systematic internaliser or any other execution platform that is not formally defined by the MIF, the express agreement of the client would be compulsory.

4. Types of instrument

The execution policy presented in this document mainly concerns equities, whose domestic market is Euronext (Paris, Brussels, Amsterdam), the latter accounting for almost all the transactions executed by Gilbert Dupont on behalf of its clients.
As regards warrants and other derivative products, given their strong volatility, orders are routed via DMA (Direct Market Access) to the domestic Euronext market.

As regards bonds, if accessing the markets does not seem appropriate given their ineligibility or insufficient liquidity, Gilbert Dupont may act off-market, using the over-the-counter market. In this case, the Brokerage Firm will then approach one or a number of market participants that are likely to be suitable given the nature of the instrument and the size and characteristics of the order so as to determine the best conditions for performing the transaction in relation to its execution policy. However, in this situation, as the transaction is not secured by a clearing platform, the counterparty risk (and more particularly the impact on settlement/delivery periods) is increased.

5. Execution criteria applicable to orders from clients termed “institutional investors”

The criteria employed by the Brokerage Firm Gilbert Dupont are, in order of priority:

- The execution price
- The liquidity
- The rapidity and the probability of execution.

To do this, Gilbert Dupont puts itself in the position of being able to access the most appropriate execution platforms, RM and MTF, in order to reach at least 90% of the average available liquidity for the stock concerned on markets termed “lit”. On client's demand, it may also access other execution platforms concerning "dark" markets listed in Appendix 1.

In this respect, the Brokerage Firm uses a Smart Order Router (SOR) and market algorithms. The Smart Order Router will handle the order in such a way as to exploit market opportunities with a view to maximising the likelihood of the best execution on the different execution platforms accessed by Gilbert Dupont.

The algorithms used make it possible to automate the handling of orders using predefined execution strategies, and using parameters that are manually positioned and monitored on a real time basis by the market operators.

In the absence of Specific Instructions, the Brokerage Firm has complete latitude to establish the chronology and the handling instructions for the order on the available market(s).

In the event of Specific Instructions from the client (execution venue, handling instructions), the Brokerage Firm Gilbert Dupont will execute the order in accordance with the instructions received; its execution policy will only apply to the elements not covered by these Specific Instructions.

At the request of the client, or if the situation in the market proves to be poorly compatible with the characteristics of the order received, notably in terms of the anticipated size and/or execution price, Gilbert Dupont may have to seek an off-market counterparty and suggest this alternative execution method to the client.

6. Execution criteria applicable to orders from clients termed “individual investors”

The best possible result for this client is established on the basis of the total cost, comprising “the cost of the financial instrument plus the execution costs, which include all the expenses incurred by the client directly relating to the execution of the order, including costs specific to the execution venue, the clearing and settlement costs, and all other potential costs paid to third-parties participating in the execution of the order”.

As a result, the best execution criteria employed by Gilbert Dupont are:

- First of all, the total cost
- Secondly, the rapidity and probability of execution.

Qualitative factors are also taken into account in a supplementary manner:

- The complexity and the performance of the execution mechanisms
- The services on offer (trading times, type of orders)
- The opportunity to offer clients full and clear information on the execution mechanisms.

All these elements lead the broker to enter its trading orders on the referent exchange of the stock, which means on the different Euronext markets, with (according to the client decision) the activation of the ‘Best Book’ service dedicated to this type of trades.

If the client requests that certain of his orders are handled like those coming from “institutional investors”, the corresponding best execution policy will apply.

7. Selection policy for market members for financial stocks and shares traded on markets in which Gilbert Dupont is not a member

On their specific request, and under the agreed contract terms, the Client may use Gilbert Duponts services to process orders for shares whose domestic market is outside the scope Brokers activity. Gilbert Dupont thus provides an order Reception/Transmission service.

The Broker acts with all due competence, care and diligence in its selection of market members contracted to execute orders. Specifically, the Broker takes into account the expertise and market reputation of the member concerned, as well as all legal, statutory, and practical requirements of the market. The Broker ensures that the member takes all reasonable steps to obtain the best possible result for execution of the Clients order, in particular, especially in view of the security, rapidity, and probability of the order and the cost. The total cost is not necessarily the decisive factor, since some markets may give priority to security to ensure proper execution and settlement of the transaction. To ensure optimum continuity of service, Gilbert Dupont has selected two independent market members with the ability to process client orders across the widest geographic area.

On receipt of an order, the Broker saves and sends it to one of the two selected market members at the earliest opportunity.

Annex 2 gives the list of the main markets in which they operate.

8. Processing of specific instructions

If a trade contains a specific instruction, including an instruction to execute a trade in a particular market, Gilbert Dupont cannot apply the policy above aimed at obtaining the best possible result. Consequently, if it accepts this specific instruction, Gilbert Dupont will fulfil its best execution obligation insofar as it will execute the trade by following the instructions provided.

9. Review of the execution policy and Selection policy for market members:

Gilbert Dupont continuously monitors its execution policy. It periodically verifies, at least once a year, its efficacy.

In the event of important modification, Gilbert Dupont will directly inform his customers by all means available. In all cases, these will be updated on Gilbert Dupont website address:

www.gilbertdupont.fr

Every year, to enable the public and investors to assess its execution policy, Gilbert Dupont publishes on its internet site, for each class of financial instruments, the statistics for the five principal trading platforms employed (in terms of transaction volumes for the previous year).

Gilbert Dupont is also in a position to produce, on demand, the elements demonstrating that the order was performed in accordance with its execution policy.

Appendix 1: List of execution venues (ESMA classification on December 18th 2017)

 

Name
Type of market
Membership
Supervisory Authority
MIC Code
"lit" markets        
Euronext Amsterdam
Régulated Market
Gilbert Dupont
AFM
XAMS
Euronext Bruxelles
Regulated Market
Gilbert Dupont
FSMA
XBRU
Euronext Paris
Regulated Market
Gilbert Dupont
AMF
XPAR
BATS Europe Regulated Market
Regulated Market
Gilbert Dupont
FCA
BATE
BATS Europe Regulated Market
Regulated Market
Gilbert Dupont
FCA
CHIX
Alternext Amsterdam
Multilateral Trading Facility
Gilbert Dupont
 AFM
ALXA
Alternext Bruxelles
Multilateral Trading Facility
Gilbert Dupont
FSMA
ALXB
Alternext Paris
Multilateral Trading Facility
Gilbert Dupont
AMF
ALXP
Marché Libre
Multilateral Trading Facility
Gilbert Dupont
FSMA
MLXB
Marché Libre Paris
Multilateral Trading Facility
Gilbert Dupont
AMF
ALXP
Turquoise Global Holdings LTD
Multilateral Trading Facility
Gilbert Dupont
FCA
TRQX
BondMatch
Multilateral Trading Facility
Gilbert Dupont
AMF
MTCH
Boerse Berlin Equiduct Trading (Freiverkehr)*
Multilateral Trading Facility
Gilbert Dupont
BaFin
EQTC
"dark" markets        
Turquoise Plato
Multilateral Trading Facility
Gilbert Dupont
FCA
TRQM
Turquoise Lit Auctions
Multilateral Trading Facility
Gilbert Dupont
FCA
TRQA
CBOE Europe - CXE Dark Order Book
 Multilateral Trading Facility
 
Gilbert Dupont
FCA
CHID
CBOE Europe - BXE Dark Order Book
Multilateral Trading Facility
Gilbert Dupont
FCA
BATD
CBOE Europe - BXE Periodic
Multilateral Trading Facility
Gilbert Dupont
FCA
BATP

*: Connection to the execution platform can be activated upon request by the client.
Appendix 2: Main Markets Accessible by the Selected Market Members

Europe

 

 

Denmark

 

Finland

 

Germany

 

Italy

 

Luxemburg

 

Norway

 

Portugal

 

Spain

 

Sweden

 

Swtzerland

 

UK

Africa

 

 

South Africa

Americas

 

 

Brazil

 

 

 

 

 

Canada

 

 

Mexico

 

USA

 

Asia

 

 

Australia

 

China

 

Hong Kong

 

Japan

 

Korea

 

Malaysia

 

New Zealand

 

Singapore

 

Taiwan

 

Thailand

 

This is a free translation of an original French document. In the event of any discrepancy between this translation and the original French document, the original French document shall prevail.*: Connection to the execution platform can be activated upon request by the client.