Policy for the transmission of order in the best interest of clients of Leonteq Securities (Europe) GmbH
Introduction
Pursuant to Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments (“MiFID II”) article 27 para. 4 , an investment firm which executes client orders must establish an execution policy aimed at achieving the best result for its clients. A corresponding obligation applies to firms which do not themselves execute client orders, but transmit client orders to other firms (for example when they act as sub-commission agent (Zwischenkommissionär) or investment broker (Anlagevermittler), article 65 para. 2 of Delegated Regulation (EU) 2017/565).
The obligation to act in the best interest of the client only applies to orders executed or transmitted on behalf of retail or professional clients. Leonteq Securities (Europe) GmbH ('Leonteq EU') regularly transmits orders from clients qualifying as credit institutions, investment firms, management companies of collective investment schemes, insurance companies or other eligible counterparties pursuant to MiFID II article 30 para. 2. In these circumstances, the best execution obligation generally does not apply (MiFID II article 30 para. 1).
When transmitting orders from professional clients, Leonteq EU will adhere to the following principles subject to extraordinary market situations or disruptions requiring it to act otherwise.
Best execution obligation
Leonteq EU will not execute client orders for the purchase or sale of financial instruments. It will transmit such orders to another firm (please refer to item 2 below). In selecting the firms to which it transmits client orders, it will take into account the following criteria:
- the price of the financial instrument;
- costs associated with the financial instrument;
- costs associated with execution of the order;
- the speed of execution;
- the likelihood of execution and settlement;
- the volume of the order;
- the type of order; and
- the qualitative criteria, such as access of the firm to trading venues
When transmitting orders from professional clients, Leonteq EU will mainly consider the total costs, but will also consider, on a smaller scale, the speed and likelihood of execution.
Selected firms
- In order to ensure the best possible result for clients, Leonteq EU has currently selected Leonteq Securities AG (Europaallee 39, 8004 Zürich, Switzerland) for the transmission of orders from professional clients for all classes of financial instruments. This selection is subject to change following a review of the policy for the transmission of client orders pursuant to item 4.
- Orders for the purchase or sale of securities will be executed by the aforementioned selected firm according to its best execution policy.
- Upon request, Leonteq EU will provide further information on Leonteq Securities AG.
Precedence of instructions from the client
An instruction from a client will always prevail. When transmitting orders, and the client has provided an instruction, Leonteq EU will follow the client's instructions, including the scope of such instructions. Therefore, Leonteq EU may instruct the selected firm to proceed according to the client's instructions. In such circumstances, Leonteq EU, in complying with the client's instructions on a transmission of an order, is not obliged to adhere to this policy for the transmission of orders in the best interest of clients.
Review of the policy for the transmission of orders
The selection of firms for the transmission of orders pursuant to this policy for the transmission of orders in the best interest of clients will be reviewed annually. In addition, Leonteq will perform a review if it has reasonable grounds to believe that material reasons for the selection of a specific firm are no longer valid. Leonteq will inform clients of any change in such selection.
Publications
Leonteq EU will publish annually the five most important firms (measured by trading volume) to which it has transmitted client orders according to this policy and information on the quality of execution obtained. This information will be available on this website.