As set forth in the "best execution" guidelines of Directive MiFID 2004/39/UE and 2010/43/EU (with the description of the methods for executing Directive 2009/65/EC, known as UCITS IV, in terms of organizational requirements, conflicts of interests, conduct of business, risk management as well as of the content of agreements entered into between depositaries and the management company) and in the related regulations (Regulations CSSF 10-4 of December 22, 2010), Eurizon Capital S.A. (hereinafter “Management Company”) is taking all reasonable steps and measures to obtain the best possible result for the managed UCITS and for the client portfolio when executing orders on financial instruments, on behalf of the managed portfolios, in the “Execution Venues" (“Execution Venues” are regulated markets, multilateral trading facilities (MTF), systematic internalises, market makers or other liquidity suppliers or other subjects carrying out, within third countries, activities comparable to those conducted by one of the afore-mentioned subjects); for the same purpose, the Management Company takes all reasonable steps also when it transmits orders to third parties (hereinafter “Intermediaries”) for their execution. Therefore, the Management Company has defined an order transmission and execution strategy designed to achieve the best possible result for client that provides the service of portfolio management and the managed UCITS.
To this end, the Management Company has prepared this document in order to provide information on the following:
- The execution factors that are deemed relevant for the identification of the Execution Venues and/or Intermediaries where the orders are to be transmitted;
- The methods adopted by the Management Company for the selection of the Execution Venues and/or the Intermediaries where the orders of collective assets management are to be transmitted;
- The monitoring and review of the strategy applied to the execution/transmission of orders.
In terms of executing or transmitting to Intermediaries the orders concerning financial instruments on behalf of the managed portfolios, the Management Company takes into account the following factors in order to obtain the best possible result:
- price;
- costs;
- speed and likelihood of execution and settlement;
- size and nature of the order;
- possible impact of price dynamics based on the order size with respect to exchanges;
- liquidity of the financial instruments;
- other characteristics of the order that are relevant for its execution and/or transmission.
The Management Company attributes a relative importance to the above factors by referring to the following criteria:
a) objectives, investment policy and risks specific to the managed UCITS and portfolio management, as described in the Prospectus or, as the case may be, in the UCITS memorandum/articles of association;
b) characteristics of the order;
c) characteristics of the financial instruments that are the subject of the order;
d) characteristics of the Execution Venues where the order may be transmitted.
In all cases, the Intermediaries are selected among entities which have an execution policy consistent with the best execution strategies under this document, and which are subject to the application of the best execution guidelines under Directive 2010/43/EU (or are otherwise willing to contractually agree to meet the best execution requirements set forth in the above referenced Directive).