- To place or execute clients’ orders on the best available terms; and
- To place or execute comparable clients’ orders in accordance with the time of receipt of such orders.
1. Scope and Application of the Best Execution
This document only applies to clients who are accredited investors who are dealing in foreign exchange (“FX”) over-the-counter derivatives (excluding spot) contracts with MonFX. Best execution is owed to such accredited investors where MONFX executes orders on behalf of such clients who place reliance on MonFX to protect their interests in relation to pricing and other elements of the transaction.
Best execution is not owed to institutional investors as defined under the Securities and Futures Act and clients who are not placing reliance on MonFX to protect their interests.
MONFX will determine if clients are placing reliance on MonFX by taking into account the following four considerations:
- Which party initiates the transaction:
Where the client initiates the transaction, it is less likely that the client is placing reliance on MonFX. In circumstances where MonFX may communicate trade ideas, market communications or indicative processes as part of our general business, we regard these communications as purely for information purposes and such communications shall not be deemed to have initiated the transaction.
- Market practice, including the convention of the client to ‘shop around’ for the best deal:
Where market practice for a particular product suggests that the client already has ready access to different providers who may provide quotes and that client has the ability to shop around, it is less likely that the client will be placing reliance on MonFX.
- Relative levels of transparency within a market:
In circumstances where pricing information is transparent and it is reasonable that the client has access to such information, it is less likely that the client will be placing legitimate reliance on MonFX.
- The information provided by the firm about its services and any agreement reached with the client:
Where any terms of an agreement with the client do not indicate or suggest that an understanding has been reached that the client will place any reliance on MonFX or MonFX has agreed to provide best execution.
2. Execution Venue
MONFX has a list of execution venues to execute transactions which we determine as beneficial in providing best execution. These venues will be based on our commercial judgement, consistency and reliability.
3. Execution Factors
Where a duty to achieve best execution applies, MONFX will take account of the following factors when executing a transaction on behalf of the client:
- Costs (including fees charged for execution, and clearing and settlement costs);
- Speed of execution – The time it takes to execute the order will depend on the price volatility and liquidity of the market;
- The likelihood of execution and settlement;
- The size and nature of the order; and
- Any other consideration that MONFX deems to be relevant to the execution of the order.