Execution policy

EXECUTION AND INTERMEDIARY SELECTION POLICY APPLIED BY THE BROKERAGE FIRM GILBERT DUPONT

Preamble

MiFID II regulations (Directive 2014/65/UE of 15 May 2014 and the Delegated Regulation 2017/565 of 25 April 2016), require investment firms to take all reasonable steps to obtain, when executing orders or during the Reception and Transmission of Orders (RTO), the best possible result for their clients.

In accordance with this directive, 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”.

In this context, the Brokerage Firm Gilbert Dupont has developed an execution and selection policy. 

This policy applies when the Brokerage Firm Gilbert Dupont executes an order on a market as a member of the market, or via a selected intermediary.   

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

 

1.     Scope of application

a.     Clients concerned

When a relationship is first established, all new clients of the Brokerage Firm 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 the Brokerage Firm 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”. 

 

b.    Types of instrument

The policies presented in this document mainly concern equities whose scope is described in annexe 1, the latter accounting for almost all the transactions executed by the Brokerage Firm 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, the Brokerage Firm Gilbert Dupont may act off-market, using the over-the-counter market. In this case, the Brokerage Firm Gilbert Dupont 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.   

 

c.     Execution venues

The arrangement for handling orders via third-party investment services providers is aimed at ensuring the largest execution scope and the greatest flexibility and adaptability in terms of access to execution venues. The list of execution venues that are accessed directly or via investment services providers are presented in annex 2.

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

The Brokerage Firm Gilbert Dupont informs its clients that the list contains execution venues other than trading platforms (example: Systematic Internalisers). The Brokerage Firm Gilbert Dupont draws the client's attention to the consequences for the client of such an execution: in this situation, the transaction not being systematically protected by a central clearing house, the counterparty risk (and more specifically its impact on settlement/delivery periods) is increased. 

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

 

2.     Execution policy

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

In order to obtain the best possible result, the Brokerage Firm Gilbert Dupont uses the tools and execution venues made available by the third-party investment services providers that it has selected, and thus applies, where required, their execution policy (via the selection policy).

Alternatively, the Brokerage Firm Gilbert Dupont may decide to execute the orders directly on the execution platforms of which it is a member, i.e. the various Euronext markets, or the over-the-counter market. The criteria employed by the Brokerage Firm Gilbert Dupont are, in order of priority:

- execution price;

- liquidity;

- rapidity and probability of execution.

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

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, the Brokerage Firm Gilbert Dupont may have to seek an off-market counterparty and suggest this alternative execution method to the client.    

 

b. 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 the Brokerage Firm 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 Brokerage Firm Gilbert Dupont 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 these types of orders.

If the client requests that certain orders are processed in the same manner as those coming from “institutional investors”, the corresponding best execution policy will apply.

 

3.     The selection policy

a. Selection of market members for orders where the Brokerage Firm Gilbert Dupont participates in the processing of the execution

To obtain the best possible result, the Brokerage Firm Gilbert Dupont has positioned itself to receive the orders that are entrusted to it, to process them, and to transmit them for execution via the systems of at least two third-party investment services providers, namely:

  • Goldman Sachs ;
  • Instinet.

These investment services providers make available to the Brokerage Firm Gilbert Dupont the tools deemed suitable to enable the complete processing of orders, notably algorithms, an SOR (Smart Order Router), and access to the execution venues of which they are members.    

The Smart Order Router will direct the order to the execution venue(s) deemed the most suitable with a view to maximising the likelihood of the best execution. 

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, it is up to the Brokerage Firm Gilbert Dupont to choose the investment services provider, the possible tools, and the most appropriate execution strategy for handling the order.

The Brokerage Firm Gilbert Dupont adopted the following criteria when selecting the third-party investment services providers :

  • technological and algorithmic capabilities;
  • scope of accessible execution venues;
  • stock coverage;
  • reputation and anteriority in order execution;
  • compatibility of their pre and post-trade processing systems with the expectations of the Brokerage Firm Gilbert Dupont, notably in terms of time periods and respect of the regulations.

Through these criteria the third-party investment services providers meet the best execution obligation defined in paragraph 2.

The quality of the processing obtained is regularly verified by means of periodic activity reports and execution reports. In addition, their performance in relation to the different selection criteria is the subject of a review performed at least once a year.       

To ensure at any time the quality of the execution and the continuity of the service, the Brokerage Firm Gilbert Dupont reserves the right to transfer all of the orders from one investment services provider to another.

 

b. Selection of market members for orders where the Brokerage Firm Gilbert Dupont does not participate in the processing of the execution

On their specific request, and under the agreed contract terms, the Client may use Brokerage Firm Gilbert Dupont’s services to process orders for financial instruments whose domestic market is outside the scope of the Brokerage Firm Gilbert Dupont's activity (cf. annexes 1 and 3). The Brokerage Firm Gilbert Dupont thus provides an order Reception/Transmission service.

The Brokerage Firm Gilbert Dupont acts with all due competence, care and diligence in its selection of market members contracted to execute orders. Specifically, the Brokerage Firm Gilbert Dupont 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  Brokerage Firm Gilbert Dupont ensures that the member takes all reasonable steps to obtain the best possible execution result for the Client’s order, notably taking into account the security, rapidity, and probability of execution, and the cost. The total cost is not necessarily the decisive factor as security may be prioritised in some markets to ensure the proper execution and settlement of the transaction.

To ensure optimum continuity of service, the Brokerage Firm Gilbert Dupont has selected three independent market members with the ability to process client orders across the widest geographic area. Upon receipt of such an order, the Brokerage Firm Gilbert Dupont records the order and forwards it within the shortest reasonable time to one of the three selected market members, namely:

  • Société Générale;
  • Goldman Sachs;
  • Instinet.

 

4.     Processing of specific instructions

If an order contains a specific instruction, notably an instruction to execute an order on a particular market or in accordance with particular processing terms and conditions, the Brokerage Firm Gilbert Dupont, if it accepts this specific instruction, will fulfil its best execution obligation insofar as it will execute the order by following the instructions provided. Its execution policy will only apply to the elements not covered by this specific instruction.   

 

5.     Review of the execution and selection policy

The Brokerage Firm Gilbert Dupont continuously monitors its execution policy and its selection policy.

It periodically verifies, at least once a year, their efficacy.

In the event of important modifications, the Brokerage Firm Gilbert Dupont will directly inform its customers by all means available. In all cases, these will be updated on the Brokerage Firm Gilbert Dupont's website at the following address:

www.gilbertdupont.fr

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

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

 

 

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.

 

 

Annexe 1 : Scope of instruments covered by this execution policy

Instruments whose primary market is:

  • Euronext Paris,
  • Euronext Amsterdam,
  • Euronext Brussels,
  • Deutsche Börse Xetra,
  • Borsa Italiana. 

 

Annexe 2 : Execution policy; list of trading platforms (ESMA classification on February 21st 2019) and other execution venues

MIC

Name

Market member

MIF Classification

Type

AQEA

AQUIS EXCHANGE EUROPE AUCTION ON DEMAND (AOD)

Goldman Sachs

Instinet

 

MTF

AUCTION

AQXA

AQUIS EXCHANGE PLC AUCTION ON DEMAND

Goldman Sachs

 

 

MTF

AUCTION

BATP

CBOE EUROPE - BXE PERIODIC

Goldman Sachs

Instinet

 

MTF

AUCTION

BEUP

CBOE EUROPE - DXE PERIODIC (NL)

Goldman Sachs

Instinet

 

MTF

AUCTION

MCSE

NASDAQ COPENHAGEN A/S - AUCTION ON DEMAND

Goldman Sachs

 

 

MTF

AUCTION

MHEL

NASDAQ HELSINKI LTD - AUCTION ON DEMAND

Goldman Sachs

 

 

MTF

AUCTION

MNSE

FIRST NORTH SWEDEN – AUCTION ON DEMAND

 

Instinet

 

MTF

AUCTION

MOSE

FIRST NORTH SWEDEN - NORWAY AUCTION ON DEMAND

 

Instinet

 

MTF

AUCTION

MSTO

NASDAQ STOCKHOLM AB - AUCTION ON DEMAND

Goldman Sachs

 

 

MTF

AUCTION

SGMY

SIGMA X MTF - AUCTION BOOK

Goldman Sachs

Instinet

 

MTF

AUCTION

TRQA

TURQUOISE LIT AUCTIONS

Goldman Sachs

Instinet

 

MTF

AUCTION

XOAA

OSLO BORS ASA - OSLO AXESS LIT X AUCTIONS

Goldman Sachs

 

 

MTF

AUCTION

XOSA

OSLO BORS - LIT X AUCTIONS

Goldman Sachs

 

 

MTF

AUCTION

XPAC

POSIT AUCTION

Goldman Sachs

Instinet

 

MTF

AUCTION

XUMP

UBS MTF - PERIODIC AUCTION

Goldman Sachs

Instinet

 

MTF

AUCTION

BATD

CBOE EUROPE - BXE DARK ORDER BOOK

Goldman Sachs

Instinet

 

MTF

DARK

CEUD

CBOE EUROPE - DXE DARK ORDER BOOK (NL)

Goldman Sachs

Instinet

 

MTF

DARK

CHID

CBOE EUROPE - CXE DARK ORDER BOOK

Goldman Sachs

Instinet

 

MTF

DARK

DCSE

FIRST NORTH SWEDEN - NORDIC@MID

Goldman Sachs

 

 

MTF

DARK

DHEL

NASDAQ HELSINKI LTD - NORDIC@MID

Goldman Sachs

 

 

MTF

DARK

DNDK

FIRST NORTH DENMARK - NORDIC@MID

Goldman Sachs

 

 

MTF

DARK

DNFI

FIRST NORTH FINLAND - NORDIC@MID

Goldman Sachs

 

 

MTF

DARK

DNSE

FIRST NORTH SWEDEN - NORDIC@MID

 

Instinet

 

MTF

DARK

DOSE

FIRST NORTH SWEDEN - NORWAY NORDIC@MID

 

Instinet

 

MTF

DARK

SGMX

SIGMA X MTF

Goldman Sachs

Instinet

 

MTF

DARK

XOSD

OSLO NORTH SEA

Goldman Sachs

 

 

MTF

DARK

XSWM

SWISS AT MID

Goldman Sachs

 

 

MTF

DARK

XUBS

UBS MTF

Goldman Sachs

Instinet

 

MTF

DARK

BLOX

BLOCKMATCH DARK

Goldman Sachs

Instinet

 

MTF

DARK/IOI

LIQU

LIQUIDNET SYSTEMS

Goldman Sachs

Instinet

 

MTF

DARK/IOI

TRQM

TURQUOISE PLATO

Goldman Sachs

Instinet

 

MTF

DARK/IOI

XPOS

POSIT DARK

Goldman Sachs

Instinet

 

MTF

DARK/IOI

LISX

CBOE  EUROPE - LIS SERVICE

Goldman Sachs

Instinet

 

MTF

IOI

LISZ

CBOE EUROPE - LIS SERVICE (NL)

Goldman Sachs

Instinet

 

MTF

IOI

ALXB

EURONEXT GROWTH BRUSSELS

Goldman Sachs

Instinet

 

MTF

LIT

ALXP

EURONEXT GROWTH PARIS

Goldman Sachs

Instinet

Gilbert Dupont

MTF

LIT

BATE

CBOE EUROPE - BXE ORDER BOOKS

Goldman Sachs

Instinet

 

MTF

LIT

CEUX

CBOE EUROPE - DXE ORDER BOOKS (NL)

Goldman Sachs

Instinet

 

MTF

LIT

CHIX

CBOE EUROPE - CXE ORDER BOOKS

Goldman Sachs

Instinet

 

MTF

LIT

EMTF

EURO MTF

 

Instinet

 

MTF

LIT

ENXL

EURONEXT ACCESS LISBON

Goldman Sachs

Instinet

 

MTF

LIT

FNDK

FIRST NORTH DENMARK

 

Instinet

 

MTF

LIT

FNSE

FIRST NORTH SWEDEN

 

Instinet

 

MTF

LIT

MTAH

BORSA ITALIANA EQUITY MTF

 

Instinet

 

MTF

LIT

ONSE

FIRST NORTH SWEDEN - NORWAY

 

Instinet

 

MTF

LIT

SSME

FIRST NORTH SWEDEN - SME GROWTH MARKET

 

Instinet

 

MTF

LIT

TRQX

TURQUOISE

Goldman Sachs

Instinet

 

MTF

LIT

XAMS

EURONEXT - EURONEXT AMSTERDAM

Goldman Sachs

Instinet

Gilbert Dupont

MR

LIT

XBRU

EURONEXT - EURONEXT BRUSSELS

Goldman Sachs

Instinet

Gilbert Dupont

MR

LIT

XLIS

EURONEXT - EURONEXT LISBON

Goldman Sachs

Instinet

 

MR

LIT

XLOM

LONDON STOCK EXCHANGE - MTF

 

Instinet

 

MTF

LIT

XMLI

EURONEXT ACCESS PARIS

Goldman Sachs

Instinet

Gilbert Dupont

MTF

LIT

XNCO

WARSAW STOCK EXCHANGE/ EQUITIES/NEW CONNECT-MTF

 

Instinet

 

MTF

LIT

XPAR

EURONEXT - EURONEXT PARIS

Goldman Sachs

Instinet

Gilbert Dupont

MR

LIT

AIMX

LONDON STOCK EXCHANGE - AIM MTF

 

Instinet

 

MTF

LIT/QUOTE

BRFQ

BLOCKMATCH MTF RFQ

 

Instinet

 

MTF

RFQ

CCEU

CITADEL CONNECT EUROPE - SYSTEMATIC INTERNALISER

Goldman Sachs

Instinet

 

SI

SI

GSSI

MARKET MAKING SMM - GOLDMAN SACHS

Goldman Sachs

 

 

SI

SI

HREU

HRTEU LIMITED - SYSTEMATIC INTERNALISER

 

Instinet

 

SI

SI

HRSI

HUDSON RIVER TRADING - SYSTEMATIC INTERNALISER

Goldman Sachs

Instinet

 

SI

SI

IMCT

IMC - SYSTEMATIC INTERNALISER

 

Instinet

 

SI

SI

JLEU

JUMP TRADING EUROPE - SYSTEMATIC INTERNALISER

Goldman Sachs

Instinet

 

SI

SI

JSSI

JANE STREET FINANCIAL LTD - SYSTEMATIC INTERNALISER

Goldman Sachs

Instinet

 

SI

SI

SSWM

SSW MARKET MAKING - SYSTEMATIC INTERNALISER

 

Instinet

 

SI

SI

TRSI

TOWER RESEARCH CAPITAL EUROPE LTD

Goldman Sachs

Instinet

 

SI

SI

VFSI

VIRTU FINANCIAL IRELAND LTD - SYSTEMATIC INTERNALISER

Goldman Sachs

Instinet

 

SI

SI

XTXM

XTX MARKETS

Goldman Sachs

Instinet

 

SI

SI

XETR

XETRA

Goldman Sachs

Instinet

 

MR

LIT

 

 

Annexe 3 : Selection policy; main markets accessible by the market members selected

Europe

 

 

Denmark

 

Finland

 

Germany

 

Italy

 

Luxemburg

 

Norway

 

Portugal

 

Spain

 

Sweden

 

Switzerland

 

UK

Africa

 

 

South Africa

Americas

 

 

Brazil

 

Canada

 

Mexico

 

USA

Asia

 

 

Australia

 

China

 

Hong Kong

 

Japan

 

Korea

 

Malaysia

 

New Zealand

 

Singapore

 

Taiwan

 

Thailand