REPORTING ON THE EXECUTION POLICY
(Document updated)
I. Introduction
As a result of the increase in financial products and the markets on which they are traded, the European Union considers it
necessary to establish common standards that provide greater protection for investors in all Member States of the European Union.
To give coverage to this objective, a standard known as MiFID (Directive 2004/39/EC of the European Parliament and of the Council, Directive
2004/73/EC of the European Commission and Regulation (EC) 1287/2006 of the European Commission) has been developed, which regulates the activity
of entities which provide investment services or carry out activities involving financial instruments.
This standard places particular emphasis on the obligation of investment firms to implement an Execution Policy with the aim of offering their
clients the best possible result in terms of order execution.
The aim of this declaration is to satisfy the demand to raise client awareness of the most important aspects that make up the CIMD Agencia de
Valores, SA Execution Policy.
II. Scope of application
The Execution Policy applies to clients classified as Retailers and Professionals, according to the MiFID regulation,
when providing a service that involves the execution and/or transmission/receipt of client orders involving financial instruments for which
CIMD Agencia de Valores, SA is duly authorised, and recognised as such by MiFID.
CIMD Agencia de Valores, SA is not obliged to achieve “best execution” in relation to orders from clients classified as Eligible Counterparties.
III. Execution Policy
CIMD Agencia de Valores, SA has taken all reasonable measures to achieve the best possible result in executing and/or
transmitting/receiving third parties client orders involving the financial instruments described in the MiFID regulation.
In this sense, CIMD Agencia de Valores, SA has effective optimum execution systems, including an execution policy that describes the CIMD Agencia
de Valores, SA principles governing execution and the firm's duties and responsibilities towards its clients in the execution and/or
transmission/receipt of orders.
To achieve the best possible execution for its clients, CIMD Agencia de Valores, SA shall consider:
Factors such as:
- Price
- Costs
- Speed
- Probability of execution
- Volume and feasibility of settlement
- Any other factor which, due to its nature, may affect the result of execution
It will also take into account the type of client and the nature of the order
Possible execution venues:
CIMD Agencia de Valores, SA shall select an execution venue that allows the firm to satisfy the provisions of its
execution policy in each specific case.
To this effect, the following locations are to be considered as execution venues:
- Official secondary markets
- Multilateral trading systems
- Systematic internalisers
If specific instructions should be received from a client in regard to the way in which an order is executed, CIMD Agencia de Valores, SA shall execute the order following the instructions, understanding that it must in this case perform its obligations in the interests of the client.
IV. Relative importance of factors of execution
Price
Of the possible execution venues which satisfy the conditions of reasonable access for the execution of an order, INTERMONEY VALORES SV, SA shall give priority to the factor of price, understanding that the firm itself must satisfy the conditions of sufficient liquidity.
Execution costs
The concept of “optimum execution result” is to be determined in terms of total consideration, understood as the total of the price and all costs related to the execution. Such costs may include: intermediation, clearing and settlement, execution venue rates, and any other third party expenses necessary for the execution of the order.
Speed, probability of execution, volume and feasibility of settlement
These factors shall be taken into account depending on the financial instrument on which the transaction is to be executed, given that the valuation of such factors is conditioned by the nature of the execution venues at which the instruments are traded and by the characteristics of each product.
V. Execution of orders
CIMD Agencia de Valores, SA, in pursuit of the best possible execution result, may proceed to execute client orders either directly or through their transmission to other intermediaries.
1. Direct execution
For direct execution, CIMD Agencia de Valores, SA shall use either of the following methods:
- Reaching an agreement between two of its clients, without the involvement of any other party
- Directly at the Execution Venues of which it is a member (see Annex I)
2. Transmission of orders to third parties
CIMD Agencia de Valores, SA shall transmit client orders to other intermediaries for execution only when it does not have direct access to the appropriate execution venues for achieving the best possible result.
In such cases, CIMD Agencia de Valores, SA shall adopt the following measures:
- It shall verify that the chosen intermediaries have established their own execution policies that allow CIMD Agencia de Valores, SA to satisfy its own execution policy
- CIMD Agencia de Valores, SA shall select as intermediary any entity that can prove itself capable of achieving results equal to or better than any other intermediary in regard to execution
- The firm shall establish execution agreements with one or more intermediaries
VI. Acceptance of the execution policy
The MiFID regulation requires that CIMD Agencia de Valores, SA obtain prior consent from each of its clients in regard to its Execution Policy before executing any order given by that client.
To this end, it is to be understood that CIMD Agencia de Valores, SA will obtain said prior consent from each client either by means of specific contractual documentation or, once the client has received information on the firm’s Execution Policy, through the transmission of an order by said client for execution without expressing any objection to such information.
VII.- Revision of the execution policy
CIMD Agencia de Valores, SA shall review the efficacy of its Execution Policy on a regular basis, at least once per year, in order to detect and, if appropriate, rectify any deficiencies in its application.
Moreover, the firm shall periodically check that all Execution Venues and intermediaries are satisfying the criteria that systematically produce the best possible results for its clients.
Clients shall be duly informed of any significant changes made to the order Execution Policy described in this document. This does not necessarily include or exclude any particular execution venue, intermediary or instrument.