BEST ORDER EXECUTION POLICY

INTRODUCTION

The purpose of this policy is to meet the company’s regulatory obligation under Section 103 of the Investment and Securities Act, 2007 and Rules 15.19, 15.23 & 15.37 of The Rules for Regulation as a Dealing Member of the Nigerian Exchange. Calyx Securities Limited (herein after referred to as “CSL”) is required to take all reasonable steps to seek to obtain, when executing orders on behalf of clients or decision to deal, the best possible results for its clients taking into account the criteria and factors set out in this policy. This policy outlines all the reasonable steps taken by CSL to ensure the achievement of best execution for all clients and that their order is handled in a fair, just and timely manner. This policy sets out CSL’s execution methodology and approach in respect of client order execution when taking all reasonable steps to obtain the best possible results in accordance with the requirements of the appropriate regulatory bodies and best practices for its clients when executing or transmitting Client orders. CSL is also required to execute orders in a prompt, fair and expeditious manner, relative to other orders or the trading interest of the firm. This policy will also address the firms approach in respect of the aggregation and allocation of orders.

The Order Execution Policy outlines the reasonable steps taken by us to ensure that we obtain the best possible results, for our clients, when executing their orders

SCOPE

This policy applies to all trades in financial instruments executed or placed by the company on the Nigerian Exchange, NASD, FMDQ, Lagos Commodities Exchange | AFEX or any other capital market trade point recognized and authorized by the Securities and Exchange Commission.

BEST EXECUTION

In general, the concept of best execution is the act of obtaining a combination of price and commission (if any) in a transaction that is most favourable to the client under prevailing market conditions. When executing trades on behalf of clients, the traders have a duty to obtain best execution for clients and to comply with any applicable legal requirements. Consequently, the trader must, when executing trades, exercise due care, skill, judgement and consideration for execution criteria (as detailed below) when handling client order.

BEST EXECUTION CRITERIA

The company will take into account the following factors in determining how to execute clients’ orders, make decisions to deal or place orders with a counterparty to achieve the best possible result: Price of the financial instrument, which are offered by the Execution Entity or Execution Venue. The direct and indirect costs related to the execution of such Financial Instruments such as:

  • All expenses incurred which are directly related to the execution of the order;
  • Clearing and settlement fees; and
  • Any other fees paid to third parties involved in the execution of the order
  • Speed (how quickly the order can be executed)
  • Likelihood of execution and settlement
  • Size of the order relative to other trades in the same financial instrument
  • Nature of the order (impact on the market); and
  • Other relevant factors. The relative importance of these factors will be determined based on our commercial experience and judgement in the light of available market information and taking into account the characteristics of the client, the order and the financial instruments that are the subject of the order, and the execution venues to which that order can be directed.
  • Execution venue fees;
SPECIFIC CLIENT INSTRUCTION

Where a client provides specific instructions as to execution, the order will be executed in accordance with those instructions. This may prevent the company from taking the steps designed and implemented in this policy to obtain the best possible results for the execution of those orders in respect of the elements covered by those instructions. Where there is no specific client instruction as to how an order should be executed, this policy will be applied to obtain the best possible result for each order that we place for execution in the market or execute ourselves on behalf of clients taking into account all available market information at the time of execution. The Traders must ensure that all confirmed client orders are entered into the Exchange’s order books immediately and continue to pursue the execution of the mandate to buy/sell within 10 business days or as detailed in the client’s mandate. If after this period, the trade has not been executed, the Trader should seek to revalidate the Client order from the client unless expressly advised otherwise by the client in the initial order.

CLIENT ORDER HANDLING

CSL shall implement process and procedures which provide for the prompt, fair and expeditious execution of clients’ mandates.

CSL shall whilst carrying out clients’ mandates, ensure that mandates executed on behalf of clients are promptly and accurately recorded and allocated.

CSL shall not execute a client’s mandate in aggregation with another client’s mandate.

CSL shall not aggregate a client’s mandate with a transaction for its proprietary account.

CSL shall not misuse information relating to pending client orders and shall take all reasonable steps to prevent the misuse of such information.

EXECUTION VENUE

Execution venue means a regulated market or any other trading facility that performs a similar function. CSL is a member of, and places significant reliance on the following venues when executing orders:

  1. Nigerian Exchange (NGX)
  2. National Association of Security Dealers (NASD)
  3. Lagos Commodities Exchange
  4. AFEX

CSL assesses the available execution venues to identify those that will enable us, on a consistent basis, to achieve the best possible result when executing or placing orders on behalf of our clients. The factors listed in 4.1 are taken into account in the choice of execution venue and methodology for all financial instruments. In particular:- Where we believe we can trade to the advantage of (or at no disadvantage to) the client in terms of one or more of price, speed of likelihood of execution impact, or any other relevant consideration, we will do so. When placing orders on a regulated market through an executing agent, orders will generally be executed on the execution venue assessed to be the most appropriate. This Company selects its executing agent primarily on the basis of their execution capabilities and always on the basis of due diligence. All relevant facts and circumstances concerning an executing agent are considered and include:

  1. The terms of the Entity’s execution policy, including costs and fees, where such a policy is available
  2. The Entity’s methodology in ensuring best execution is attained
  3. The commercial experience, judgement and history of the Entity
  4. The Entity’s assessment and use of trading venues in order to enable the Entity, on a consistent basis, to achieve the best possible result when executing client orders
  5. The approach of the entity to the aggregation of Client orders