CMB International (“CMBI” or “We”) executes orders in various asset classes depending upon the products and services we are providing to our clients (“You”).
Before we complete any orders for you, it is important that you understand how we will execute such orders. The information contained below is a summary of our best execution policy and is designed to provide you with a general understanding of how such policy applies to your orders. Please note that this information should not be seen as a prescriptive statement of how a particular order must be dealt with.
Best-execution obligation requires us to take reasonable measures to obtain the best possible results for you when executing orders. We shall take reasonable steps to achieve best execution of your orders in accordance with applicable local trading rules and market regulations.
Execution Factors
For transactions where we determine best execution applies, we will take a variety of factors into consideration and determine their relative importance depending on prevailing market conditions at the time of execution. These factors include but not limited to the following:
- Nature of your orders;
- Your specific instructions;
- Time of reception of orders compared to other orders;
- Price;
- Cost;
- Speed of execution;
- Likelihood of execution;
- Size of the order;
- Market liquidity and impact of the order on the market; and
- Any other relevant factors.
Specific Instructions
In case specific instruction is received from you, CMBI will prioritize the specific element(s) as given in your instruction when executing such order(s):-
- Specific price and/or;
- Specific broker and/or;
- Specific counterparty and/or;
- Specific timeframe and/or;
- Specific venue etc.
In considering a client’s specific instruction, CMBI may be prevented from executing the order(s) in accordance with our best execution policy to achieve the best possible results in executing those order(s). In respect of other elements of the order (if any) that are not covered by the specific instruction, we will still provide best execution.
Electronic Orders
Electronic orders placed by you will be routed directly to an exchange or trading venue via a Direct Market Access platform. In such situation, you will be considered to have provided a specific instruction to us.
Applicability of Best Execution
Equities and Equities Derivatives Transactions
We consider that we own best execution for clients when executing orders on a client’s behalf in respect of “careful discretion order” if we consider that you are legitimately relying us on looking after your interest. For example, where we accept instructions to execute an order and we make decisions on how it will be executed as we will be exercising discretion on agent or riskless principle basis, in executing the order on behalf of the client.
In order to help determine whether you are legitimately relying on us to provide best execution, we will consider the following factors, where applicable:
- your level of sophistication
- your ability to negotiate competitive prices bilaterally based on factors including your product knowledge, experience and level of market access
- party initiating the transaction
- existence of market for shopping around
- Whether we have disclosed to you that best execution is not applicable
Execution Venues and Brokers
You should note that best execution arrangement might apply through the exclusive use of affiliates, connected parties and third parties. When CMBI passes its client’s order to another entity for execution, we will take all sufficient steps to achieve the best possible outcome, in accordance with our best execution policy, taking account of the factors mentioned above and any specific instructions received from the client in relation to that order. When we use our affiliates or connected party to execute a client’s order, we will ensure that any conflicts of interest are managed appropriately to provide the best result for the client.
Please also note that you are considered not placing legitimate reliance on us to provide best execution under the following circumstances:
- where you accept a price provided by us further to a request for quote or other expression that may lead to the execution of a transaction; or
- where you initiate the transactions, (for example where you provide details as to direction, size, level and/or other specific instruction), and when we are willing and able to trade within those parameters and an agreement to the transaction therefore reached between us which is thereafter executed.
Exceptions
You should also be aware that best execution is not applicable under the following scenario: -
- Where you accept a firm price or two-way price provided by us in response to your request for a quote;
- Order from you with specific instruction such as request to execute at a specific price limit or request for execution on a particular exchange where we shall be deemed to have satisfied its best execution obligation to the extent that it executes an order, or a specific part of an order, according to your specific instructions;
- Quote driven order from you who is a professional investor as defined under paragraphs (a) to (j) of the definition of “professional investor” in section 1 of Part 1of Schedule 1 to the Securities and Futures Ordinance of Hong Kong where you do not place legitimate reliance on us to provide best execution as it is the you who ultimately decides whether to proceed with a transaction on the basis of a firm price provided by us which the client can accept or reject in (i) OTC structured investment products issued by our affiliate(s) (such as CMBI Financial Product Limited) and (ii) debt securities where we enter into principal transactions with you;
- Order in collective investment schemes where we will trade exclusively with fund managers or its appointed administrators which may be affiliates or third parties on our approved counterparty list;
- Order in OTC structured investment product such as participation notes or funding related note form products which are largely customized to meet your specific requirements and its pricing is generally derived as a result of bilateral negotiations between us where we will give priority to our affiliate; or
- n accordance with the terms of a contractual relationship between CMBI and the client, we may exercise a power to terminate such relationship upon the occurrence of an event of default in respect of which the client is the defaulting party or a similar event. In exercising this power (including, without limitation, by unwinding or otherwise terminating any client position or enforcing any security), we act for our own account to protect our interests and do not act on the client’s behalf in terms of best execution.
Regardless whether best execution applies or not, we will still be required to treat you fairly and to manage any conflict of interest that may arise.
Monitoring and Review
CMBI will monitor and review the effectiveness of its order transmission arrangements to ensure that whether applicable it continues to provide clients with best execution.
If you have questions after reading this document or concerning our dealings with you, we encourage you to contact your CMBI relationship manager.
By continuing transaction with us, you are deemed to have taken notice of and agree to be bound by the best execution arrangement as mentioned above.
This document does not constitute legal or any other form of advice and must not be relied on as such. It is your responsibility to review and conduct your own due diligence on the relevant rules, legal documentation and any other information provided to you. You may wish to appoint your own professional advisor(s) to assist you with this. We will not in any circumstance be liable, whether in contract, tort, breach of statutory duty or otherwise for any losses or damages that may be suffered as a result of using this document. No responsibility or liability is accepted for any difference of interpretation of legislative provisions and applicable rule/circular on which this document is based.
In case of discrepancies between the English and Chinese versions, the English version shall apply and prevail.
(202007)
