Order execution policy financial instruments - Danske Bank
Order execution policy financial instruments - Danske Bank
Order execution policy financial instruments - Danske Bank
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<strong>Danske</strong> <strong>Bank</strong> A/S. CVR-nr. 61 12 62 28 - København<br />
O R D E R E X E C U T I O N P O L I C Y – F I N A N C I A L I N S T R U M E N T S<br />
Applicable from 1 June 2012<br />
This <strong>policy</strong> sets out the principles we follow as<br />
a securities dealer when executing your orders.<br />
Exceptions<br />
The <strong>policy</strong> does not apply to you if you are a<br />
professional client and we quote a price for our<br />
own account or negotiate terms directly with<br />
you in respect of transactions where we act as<br />
principal.<br />
The <strong>policy</strong> also does not apply to orders concerning<br />
issues and redemptions of unit trust certificates<br />
or other units of collective investment<br />
schemes<br />
share issues and repurchases<br />
acquisition offers to shareholders<br />
The <strong>policy</strong> also does not apply to you if you are<br />
classified as an “eligible counterparty”.<br />
1. Best <strong>execution</strong><br />
We take all reasonable steps to obtain the best<br />
possible result for you – this is what we call<br />
“best <strong>execution</strong>”.<br />
If your instructions limit our options for executing<br />
your order, it may be impossible, or partly<br />
impossible, for us to comply with our <strong>policy</strong>,<br />
and we may therefore not be able to ensure<br />
best <strong>execution</strong>.<br />
2. Basis of assessment<br />
When we choose how to ensure best <strong>execution</strong>,<br />
we consider various factors such as<br />
price and costs<br />
speed<br />
likelihood of <strong>execution</strong> and settlement<br />
type and size of the order<br />
other relevant factors<br />
We prioritise the factors, considering<br />
your situation and the objective of the order<br />
current market conditions<br />
the specific security or other <strong>financial</strong> instrument<br />
that the order concerns<br />
relevant <strong>execution</strong> venues<br />
In most cases, price and costs are the essential<br />
factors for ensuring best <strong>execution</strong>. This<br />
applies also if, to serve your interests, we execute<br />
your order in more tranches or at more<br />
<strong>execution</strong> venues in order to achieve best <strong>execution</strong>.<br />
When we execute the order, various circumstances<br />
may cause us to prioritise other factors.<br />
For example, the size or nature of your order<br />
may affect the price level, making us prioritise<br />
quick <strong>execution</strong>, or we may postpone the <strong>execution</strong><br />
of the entire order or parts of it.<br />
Market conditions for the relevant <strong>financial</strong><br />
instrument may cause us to prioritise the likelihood<br />
of <strong>execution</strong>. We may therefore decide<br />
to execute your order at the <strong>execution</strong> venue(s)<br />
that have the necessary liquidity to ensure<br />
Page 1 of 4<br />
<strong>Danske</strong> <strong>Bank</strong>, Holmens Kanal 2-12, DK-1092 København K<br />
Tel. +45 33 44 00 00, fax +45 33 44 28 85
<strong>Danske</strong> <strong>Bank</strong> A/S. CVR-nr. 61 12 62 28 - København<br />
timely <strong>execution</strong> and the smallest possible<br />
effect on the price level.<br />
3. Execution venues and business partners<br />
We choose the <strong>execution</strong> venues and business<br />
partners that, in our opinion, offer the best<br />
possibilities of ensuring best <strong>execution</strong>.<br />
In particular, we consider costs, efficient pricing<br />
and access to price information, but we<br />
also focus on <strong>execution</strong> venues with trading<br />
facilities allowing us to execute orders where<br />
the necessary liquidity is available.<br />
Our most recent list of major <strong>execution</strong> venues<br />
and business partners is available at<br />
www.danskebank.dk.<br />
4. <strong>Order</strong> <strong>execution</strong><br />
4.1. General conditions<br />
It is not always possible to execute your order<br />
at the best price, but we will always strive to<br />
execute your order in accordance with our<br />
<strong>policy</strong>.<br />
We strive to execute purchase orders at the<br />
lowest sales price offered and to execute sales<br />
orders at the highest purchase price offered.<br />
We execute orders as quickly as possible and<br />
in the sequence in which they arrive.<br />
We execute orders at as well as outside <strong>execution</strong><br />
venues, that is, regulated or other organised<br />
markets. We may also choose to execute<br />
an order acting as buyer or seller, for example<br />
under the systematic internalisation rules. You<br />
can read more about our way of trading in<br />
Terms and conditions for trading in <strong>financial</strong><br />
<strong>instruments</strong> at www.danskebank.dk.<br />
<strong>Order</strong>s may be aggregated and executed in one<br />
or more tranches if, due to demand, several<br />
orders may be settled at an average price that<br />
we consider generally favourable. Consequently,<br />
aggregation may be to the disadvantage<br />
of an individual order.<br />
We execute at a weighted average price when<br />
we aggregate orders or execute orders in more<br />
than one tranche.<br />
When executed, aggregated orders are, to the<br />
extent possible, allocated to clients on the trading<br />
day at the calculated average price. If aggregated<br />
orders can be executed only in part,<br />
we allocate the executed part to the participating<br />
clients in proportion to the size and conditions<br />
of their orders. Allocation to <strong>Danske</strong> <strong>Bank</strong><br />
is made only if all orders of the participating<br />
clients are satisfied in full.<br />
4.2. Special conditions<br />
4.2.1. Shares etc.<br />
When we execute orders in respect of shares,<br />
standardised derivatives (such as options and<br />
futures) and unit trust certificates listed for<br />
trading on a regulated or other organised market<br />
and also traded outside that market, we<br />
usually<br />
promptly place the order at one or more<br />
<strong>execution</strong> venues, subject to the rules of the<br />
individual venue. <strong>Order</strong>s can be executed<br />
only if they match opposite bids or offers.<br />
However, if an order cannot be matched in<br />
full, partial <strong>execution</strong> is often possible.<br />
Page 2 of 4<br />
<strong>Danske</strong> <strong>Bank</strong>, Holmens Kanal 2-12, DK-1092 København K<br />
Tel. +45 33 44 00 00, fax +45 33 44 28 85
<strong>Danske</strong> <strong>Bank</strong> A/S. CVR-nr. 61 12 62 28 - København<br />
wait before placing the whole order or place<br />
it successively in tranches. We may wait if<br />
we find that, because of market conditions,<br />
liquidity or the size or nature of the order,<br />
this is the most favourable solution for you.<br />
combine the order with other orders and<br />
subsequently place it at one or more <strong>execution</strong><br />
venues. We aggregate orders if we find<br />
that, because of market conditions, liquidity<br />
or the size or nature of the order, this is the<br />
most favourable solution for you.<br />
act as principal, trading at a price reflecting<br />
the market price.<br />
place the order through a business partner<br />
with whom we have an agreement. Generally,<br />
the business partner decides how to<br />
execute the order.<br />
4.2.2. Special <strong>financial</strong> <strong>instruments</strong><br />
When executing orders concerning special<br />
<strong>financial</strong> <strong>instruments</strong> not listed for trading on<br />
regulated or other organised markets and not<br />
negotiated through issues, redemptions and<br />
repurchases, we act as buyer or seller. Our<br />
prices match the prices which we can obtain,<br />
taking into account the time, size and trading<br />
conditions.<br />
We determine the price of unit trust certificates<br />
on the basis of information from the issuer<br />
about net asset value and available market<br />
data on trading prices.<br />
4.2.3. Bonds/fixed income<br />
We normally execute trading in respect of<br />
bonds with <strong>Danske</strong> <strong>Bank</strong> acting as buyer or<br />
seller.<br />
We distinguish between trading in bonds for<br />
which we quote bid and offer prices, and bond<br />
trading that we execute on the basis of prices<br />
obtained from business partners that quote<br />
prices for the relevant bonds. In both cases, we<br />
trade as principal.<br />
Bond pricing is based on models used to forecast<br />
yield curve and development trends.<br />
Through international, generally recognised<br />
information systems, we have access to price<br />
information from major market makers.<br />
Structured bond pricing is based on the value<br />
of the underlying asset. The exact forecasting<br />
model of a specific structured bond can be<br />
found in the conditions applying to the bond.<br />
4.2.4. Derivatives trading (<strong>Danske</strong> <strong>Bank</strong> acting<br />
as principal)<br />
This section is relevant only if you have or want<br />
to have a master agreement with <strong>Danske</strong> <strong>Bank</strong><br />
for trading in derivatives.<br />
When you trade in derivatives with <strong>Danske</strong><br />
<strong>Bank</strong> acting as counterparty, the price of the<br />
transaction is normally based on market<br />
prices.<br />
The price is calculated on the basis of either<br />
external reference prices from recognised<br />
operators on the relevant markets, information<br />
providers, business partners, and others,<br />
or<br />
Page 3 of 4<br />
<strong>Danske</strong> <strong>Bank</strong>, Holmens Kanal 2-12, DK-1092 København K<br />
Tel. +45 33 44 00 00, fax +45 33 44 28 85
<strong>Danske</strong> <strong>Bank</strong> A/S. CVR-nr. 61 12 62 28 - København<br />
our internal reference prices based on<br />
prices, interest and foreign exchange rates,<br />
yield curves, volatility, yield and price<br />
spreads, co-variation, and supply and demand<br />
In both cases, the following factors are also<br />
taken into account:<br />
Information about the issuer of the underlying<br />
<strong>financial</strong> instrument<br />
Relevant information about the market in<br />
question<br />
The complexity of the transactions<br />
The liquidity of the market for the relevant<br />
type of derivatives transaction<br />
Settlement risks<br />
Creditworthiness<br />
Our cost of capital in connection with the<br />
derivatives transaction<br />
The costs incurred during the life of the<br />
transaction, including expenses for fixing,<br />
event and market value reporting<br />
5. Monitoring, evaluation and changes<br />
We monitor and evaluate the effectiveness of<br />
this <strong>policy</strong> and the measures taken to comply<br />
with it. If necessary, we will change the <strong>policy</strong><br />
or the measures.<br />
We also assess, on an ongoing basis, whether<br />
the <strong>execution</strong> venues and business partners<br />
we have chosen to ensure best <strong>execution</strong> continue<br />
to meet our standards. If not, we will<br />
make the necessary changes.<br />
Any changes to our order <strong>execution</strong> <strong>policy</strong> will<br />
be published on our website.<br />
6. More information<br />
For more information about the <strong>execution</strong> of<br />
your order, please contact your branch.<br />
You can read more in Terms and conditions for<br />
trading in <strong>financial</strong> <strong>instruments</strong> and Terms and<br />
conditions for foreign exchange and derivatives<br />
trading.<br />
Page 4 of 4<br />
<strong>Danske</strong> <strong>Bank</strong>, Holmens Kanal 2-12, DK-1092 København K<br />
Tel. +45 33 44 00 00, fax +45 33 44 28 85