Information on the orders trasmission and execution strategy
In accordance with Article 48 of the CONSOB “Regolamento Intermediari”, and with Article 3, Section 3 of the Commission Delegated Regulation (EU) 2017/576 of 8 June 2016, gli Investment Firms are held to publish, for each class of financial instruments traded, information on the Execution Venues used to execute orders relating to the products managed in the previous year*.
To this end, as provided for by the “Order transmission and execution strategy of Eurizon Capital SGR S.p.A.”, in the course of 2019, Eurizon Capital SGR S.p.A. (hereunder the “SGR”) continued to take steps and to put in place effective mechanisms to obtain the best possible results for the UCITS managed and for the portfolios of professional and retail clients, when executing orders on behalf of managed assets on regulated markets, multilateral trading facilities (MTFs), organised trading facilities (OTFs) and Investment Firms operating as systematic internalisers, market makers, traders on their own account.
In particular, in implementing investment choices on behalf of managed assets, the SGR executed orders using Investment Firms of high standing that respect the criteria of confidentiality, trustworthiness, and financial solidity, needed to assure the correct execution of the transactions, and to minimise counterparty risk. To this end, for each type of financial instrument/market, the SGR typically used several Investment Firms, in order to avoid excessive concentration with a single counterparty, and to reduce recognisability on the market of its investment strategies. The SGR did not combine transactions on its own account with one or more orders placed on behalf of UCITS and clients.
The modalities through which the SGR achieved these goals were differentiated in function of the type of assets managed/client, and of financial instrument. Specifically, the SGR place the orders with the Execution Venues and Investment Firms selected taking into account the different asset classes traded and their liquidability.
For execution ends, the SGR took into consideration the following factors, in order to obtain the best possible result:
- price of the instrument;
- execution costs;
- execution and settlement speed and probability;
- size and nature of the order;
- possible impact on the price trend deriving from the size of the order in relation to trading volumes;
- liquidity of the financial instruments;
- other relevant characteristics of the order for its execution and/or transmission.
In line with the Strategy, the SGR attaches relative importance to the above factors, taking into consideration:
- the goals, investment policy and specific risks of the managed assets;
- the characteristics of the order;
- the characteristics of the financial instruments, or of the other assets included in the order, and of their liquidability conditions;
- the characteristics of the Execution Venues with which the order may be placed.
As part of the portfolio management services offered, the SGR also takes into account the characteristics of the investors, including their classification as retail or professional clients. Per retail clients, in selecting Execution Venues the relative importance of the factors is determined in reason of the total consideration represented by the price of the financial instrument and by execution costs; costs include all the expenses faced by the client and directly tied to the execution of orders, including Execution Venue fees, compensation costs, as well as settlement and any other fees paid to third parties in relation to the execution of orders. However, when considered necessary to obtain the best possible result in terms of total consideration, the SGR gave priority to speed, execution and settlement probability, the size and nature of the order, market impact, and to all the other implicit costs of the transaction.
For professional clients, the SGR takes total consideration as the predominant factor, barring specific circumstances that advise attaching greater importance to other factors to obtain the best result possible.
In providing collective investment and portfolio management services, the SGR may use the services of Investment Firms that belong to the Intesa Sanpaolo Group. To this avail, the SGR has adopted specific organisational setups and internal procedures apt to guaranteeing, at the Group level and for each company of the Group, independence in assessment as well as the separation of tasks among departments subject to segregation (so-called Chinese Walls or Information Barriers).
Banca IMI, counterparty of the Intesa Sanpaolo Group, is the Investment Firm selected by the SGR to carry out clearing activities for transactions on listed derivative financial instruments; this choice allows the adoption of an operational management model for the guarantees pertaining to transactions of this kind, capable of optimising the level of protection of managed assets.
The SGR has not entered into specific agreements with any Execution Venue on payments made or received, and discounts, reductions or non-monetary benefits obtained. Therefore, the SGR received no remuneration, discount or non-monetary benefit for having addressed orders to one particular Execution Venue. The fees applied to the orders placed on behalf of managed assets may differ depending on the execution method, the asset class, the Execution Venue, and the geographical location/capitalisation of the issuer.
Data analysis referred to the Investment Firms selected for 2019 confirmed respect of the SGR’s “Order transmission and execution strategy”.
* The "Execution Venues" are regulated markets, multilateral trading facilities (MTFs), organised trading facilities (OTFs) and "Investment Firms" operating as systematic internalisers, market makers, traders on their own account, or other liquidity providers or entities that perform a similar function in a third country to the functions performed by any of the foregoing).