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:
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 |