Scope of the policy
This policy applies to all trade instructions received by Computershare. The instruments traded will be non-complex, transferable securities, where there are frequent opportunities to buy or sell at publicly published prices. Computershare considers that in all situations we are acting on behalf of our customers, and that they legitimately rely on us to represent their best interests.
This policy should be read in conjunction with the particular provisions set out in the terms and conditions of the relevant dealing service. In the event of a conflict between this policy and the terms and conditions, the terms and conditions will prevail.
If you provide us with specific instructions regarding how your order is to be handled, these will take precedence over this policy. This may mean that we cannot obtain the best possible result for you, insofar as the order handling is affected by your specific instruction.
Principles of the policy
Computershare acts in the capacity of a firm that receives and transmits client instructions. This means that we do not execute trades directly in the market ourselves. We rely on the services of a number of counterparties to facilitate customers’ orders, who in turn owe us a duty to achieve “best execution”.
In accordance with Central Bank of Ireland rules, the concept of “best execution” means that when executing customers’ orders, or when passing these to a counterparty to execute, a firm is required to take all sufficient steps to obtain the best possible results for its clients, having regard to certain factors and criteria.
The best execution factors are a consideration of the result of the trade in terms of:
- Likelihood of execution and settlement
- Any other consideration which is relevant to the execution of an order
The best execution criteria are an assessment as to the characteristics of:
- The individual client
- The individual order
- The individual instrument
- The individual execution venue
Computershare affords the protections of “Retail Client” classification to all of our customers. As a result, in line with Central Bank of Ireland rules, Computershare gives priority to obtaining the best possible results in terms of “total consideration”, which will be achieved by a combination of the price received and the costs associated with a transaction. However, the other execution factors may be considered in terms of their effect on the overall consideration of the trade, and their priorities will be assessed based on the execution criteria of the individual trade order.
In particular, the liquidity of the instrument may affect the above factors and our order handling decisions. Firstly, we must have regard to the availability of buyers or sellers within the market, to enable us to fulfil the trade order. Secondly, we are required to give careful consideration to the impact of the trade on the market itself.
Other particular examples of aspects that may affect the above include:
- The nature of the relevant service and complexity of requirements
- The type of order and instructions
- The stock market listing and method of settlement
- The counterparties’ systems and abilities
Following consideration of the above factors and criteria, the decisions made by Computershare in respect of transmitting customer orders will include a choice of execution venue. Our approach will usually be a consistent selection for all orders within an individual dealing service.
As a receiver and transmitter, Computershare does not transact directly on an execution venue, but passes customers’ orders to counterparties with which we have an established contractual relationship to provide us with execution services. These entities will usually be member firms of the relevant exchange, Retail Service Providers and/or Market Makers. We refer to these entities throughout this policy as “Brokers”.
The Brokers that we regularly use for executions are:
- Canaccord Genuity Limited*
- Citigroup Global Markets Limited
- J & E Davy
*denotes those Brokers with whom we are able to trade in “Real Time” via an electronic connection. Refer to Trading Methods for more detail.
The above Brokers are entities that enable us to consistently obtain the best possible results for the execution of our customers’ orders. The Broker we use to execute your instructions is chosen in accordance with our Broker Selection Policy.
The Trading Venues used by the Brokers to execute trades transmitted to them by us, will be determined in their own best execution and order handling arrangements. The Trading Venues chosen may be Regulated Markets, Multilateral Trading Facilities (MTFs) or Organised Trading Facilities (OTFs) (collectively, “Trading Venues”). Dependent on the nature of the trade the Broker may use one or a combination of Trading Venues.
The Broker may decide at their discretion to execute an instruction outside a Trading Venue, if they consider it in Computershare’s best interest to do so. Where execution takes place outside of a regulated venue, the trade will not be subject to the rules of a Trading Venue and increased risks may apply, for example (but not limited to) delayed settlement. Where a trade is executed outside of a Trading Venue, Computershare’s obligation to provide best execution to you will be unaffected.
In order for Computershare to act outside of a Trading Venue, a customer is required to provide express prior consent. Details are provided in your terms and conditions, and consent to those terms is obtained prior to the submission of a trade order. Further details of the potential risks involved with trading outside of a regulated venue can be obtained upon request, by writing to us at 3100 Lake Drive, Citywest Business Campus, Dublin 24, D24 AK82.
“Real Time” trading means your order will be routed directly to the Broker by electronic systems for trading, although this does not guarantee immediate execution. For a service which involves Real Time web trading, the order will be routed via Computershare systems which are connected to a pre-determined Broker’s systems. Note, Brokers with which we have a Real Time electronic connection are denoted with * in the list of Trading Venues). For non-Real Time trading, the order will be routed via a Computershare dealer. Computershare dealers are UK Financial Conduct Authority or Irish Central Bank of Ireland approved persons, who have been deemed competent to handle such orders, and who have access to market data. The dealer may transmit the order using the electronic connections which are utilised by the Real Time trading systems, by other electronic systems, or by telephone, in a fair and timely manner.
In accordance with the relevant service terms and conditions, individual instructions received via non-Real Time means, may be aggregated when transmitted to our Broker. All individuals within the aggregated order will receive the same price. In the unlikely event that an aggregated order can only be partially completed, for example due to a stock having been suspended from trading, allocations will be completed on a pro rata basis.
Where we receive an instruction to purchase stock in relation to a relevant employee share plan arrangement, we will transmit the instruction to our sister entity, Computershare Investor Services PLC, to undertake the transaction on our behalf with a Broker. This is to ensure that all individuals participating in the relevant employee share plan arrangement will receive the same price. In the unlikely event that Computershare Investor Services PLC is unable to complete the order, the associated proceeds will be returned to us.
Liquidity considerations may result in an order being spread over an amount of time, rather than immediately executed in full. The Broker will adopt a strategy for working the order in to the market, and an average price of the individual order fills will be calculated. The result will represent a fair price, usually comparable to the volume weighted average in the market over the time the order is being executed.
Similarly, as comparable orders are required to be dealt with in order of receipt, there may be a delay between the receipt and the transmission of a trade where it is queued behind others. This means that the result achieved will reflect a fair price at a time which is later than at the point of submission of the instruction.
Monitoring and reviewing of the policy
Computershare regularly monitors the quality of execution provided by the Brokers that we use, to ensure that orders are being handled appropriately. We take relevant action if the quality of execution can be enhanced.
Computershare will review our order handling arrangements, including this policy, on at least an annual basis and whenever a material change occurs that affects our ability to continue to obtain the best possible result for our customers.
Information on our top five execution venues is available here.
Computershare Investor Services (Ireland) Limited is regulated by the Central Bank of Ireland.