Order Execution Policy
I. General provisions
Art.1. Art.1. This Policy is developed pursuant to the Markets in Financial Instruments Act (MFIA) and Commission Delegated Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (Delegated Regulation 2017/565) and Ordinance No 38 on the Requirements for the activity of investment firms (Ordinance No 38).
Art. 2. The purpose of this Policy is to ensure a high quality of execution of the transactions carried out for the account of Leno Markets’ s clients and to maintain the integrity and efficiency of the financial system when the investment intermediary:
a) executes orders on behalf of clients;
b) receives and transmits orders in relation to one or more financial instruments, including intermediating for conclusion of transactions in relation to financial instruments;
c) gives orders to execute transactions on behalf of clients in relation to a customer’s portfolio managed by the investment firm.
II. GENERAL PROVISIONS AND PRINCIPLES IN THE EXECUTION OF CLIENTS’ ORDERS
Art. 3. (1) II “Leno Markets” executes their clients’ orders in their best interest according to the Policy adopted by the investment intermediary, taking into account the price, costs, speed of execution and settlement, size, nature, as well as all other circumstances related to the execution of the order.
(2) When providing investment services and activities on behalf of clients II “Leno Markets” JSC acts honestly, fairly and professionally in accordance with the best interests of its clients.
(3) II “Leno Markets” JSC treats its clients taking into account the categorization made and the requirements applicable under MFIA according to the type and status of the client. The Investment intermediary treats its clients equally regardless of their categorization.
(4) In compliance with the obligation of achieving best result for the client an II “Leno Markets” JSC shall execute its clients’ orders as it earliest convenience, unless this would obviously be to the clients’ disadvantage.
(5) The investment intermediary shall execute the client's order by taking all sufficient steps to obtain the best possible result for the client. The investment intermediary has fulfilled this obligation if it has taken sufficient steps to report:
1. the price according to the terms of the order;
2. the amount of costs;
3. the speed of execution of the order;
4. the probability of execution;
6. the size and nature of the order;
7. as well as all other circumstances related to the execution of the order.
(6) The Investment intermediary may not execute orders on behalf of its clients if it has not obtained their prior consent to the Policy.
(7) In case of specific clients’ instructions II “Leno Markets” executes the order in accordance with these instructions, in regards to the factors determining the best execution in client’s interest, and for those orders for which there are no instructions, the investment intermediary makes an appropriate assessment.
(8) Any specific clients’ instructions may prevent the intermediary from taking all necessary actions to achieve the best result when executing clients’ orders in accordance with this Policy, for that part of the order, which the specific instructions refer.
III. FACTORS WHICH THE INVESTMENT INTERMEDIARY REVIEWS AND ASSESS WHEN EXECUTING CLIENTS’ ORDERS
Art. 4. (1) II “Leno Markets” JSC executes the client orders in his best interest, as to fulfill this obligation the company makes sufficient efforts to determine:
a) A price for the client according to the parameters of the order: The price of the financial instruments is an important factor, which the investment intermediary reviews when executing clients’ orders. This factor considered together with the costs related to the execution of client’s order shall be regarded as the most important factor in respect of the retail clients, as well as the selection of execution venue.
b) Amount of the cost: The cost related to the execution of clients’ orders is the second most important factor, which the investment intermediary reviews together with the price. The expenses related to the performance shall include all expenses that are directly related to the execution of the order, including fees for the execution venue, clearing and settlement fees, as well as other fees and remunerations payable to third parties, bound with the execution of the order. Usually the costs are also crucial for the selection of an execution venue.
c) Volume/number of the financial instruments. The volume or the number of the financial instruments of the client’s order are directly related to the price of the financial instruments. and the transaction costs. Apart from the price, the size of the client's order is also important for the speed and probability of an execution venue.
d) Speed of execution: This refers to the time interval from the submission of a client order suitable for execution to the confirmation of its execution from the place of execution. The investment intermediary shall make reasonable efforts to execute each order as soon as possible, which is normally possible in the most representative market for the particular instrument. Taking into account this factor enables the client to make the most of the market movement, which is in his best interest. Speed of execution can be especially important in cases of high market volatility and rapid change in instrument prices.
e) Settlement: The timeliness of settlement completion, without delay, can be an important factor, especially in the case of large volume orders, as well as in the case of orders placed by a professional client. Depending on this and as far as the II is aware of the further intentions and goals of the specific client, this factor may receive significant weight in meeting the criteria for ensuring the best execution of client orders and obtaining the best possible result of the client.
f) Type and nature of the order: The characteristics of the client's order can have a significant impact on the choice of place of execution, in order to achieve optimal price and speed. The Investment intermediary assesses what the best result for the client might be and assesses all the factors listed according to the type and nature of the order: buy, sell, exchange, etc.; limited, market, etc.
g) Any other factors that are relevant to the order execution and the achievement of the best result.
(2) In execution of client orders II “Leno Markets” JSC shall take into account the relevant significance of the factors under para. 1, according the following criteria:
a) the characteristics of the client, including whether he has been defined as a retail or professional client;
b) the characteristics of the client’s order, including when the order relates to a securities financing transaction;
c) the characteristics of the financial instruments subject of the order;
d) the characteristics of the execution venues, to which the order may be directed for execution.
Art. 5. Additional criteria applicable to retail clients’ orders.
(1) When executing an order given by a retail client, the best possible performance of such order shall be determined by the total amount of the transaction, including the price of the financial instrument and the expenses related to the performance. The expenses related to the performance shall include all expenses that are directly related to the execution of the order, including fees for the execution venue, clearing and settlement fees, as well as other fees and remunerations payable to third parties, bound with the execution of the order.
(2) To achieve best possible performance, in the cases where there is more than one competitive execution venues of an order in relation to financial instruments and in making assessment and comparison of the results that may be achieved for a retail client where executing the order on each of the execution venues, specified under the intermediary’s policy for performance of orders which are suitable for its execution, the intermediary’s commission fees and the expenses incurred in connection with the execution of the order on each of the possible venues shall be taken into consideration.
Art. 6. The investment intermediary shall not be entitled to receive remuneration, discount or non-monetary benefit for submitting an order to a specific trading venue or for executing an order if it thus violates the requirements for managing conflicts of interest, disclosing information to the client, rules for provision of independent investment advice, restrictions on the receipt of commissions and benefits, the assessment of appropriate service and the terms of the contract and the general conditions.
Art. 7. The investment intermediary has fulfilled its obligations to act in the best interests of the client and is not obliged to comply with the requirement to make all reasonable efforts to achieve the best result for its clients when following specific instructions of the client in execution of the order or transmits the order to be executed by another person.
IV. EXECUTION VENUES
Art. 8. II “Leno Markets” executes the orders of its clients in the following execution places, which allow the investment intermediary to achieve the best execution of the orders of its clients and to get the best possible result:
a) Regarding shares, rights, warrants, mutual funds, exchange traded funds (ETFs), debt securities (bonds and government securities), compensatory instruments admitted to trading on a regulated market in Bulgaria:
- Regulated securities market - Bulgarian Stock Exchange-Sofia - executes orders directly on the markets organized by BSE-Sofia AD. Trading on the Bulgarian Stock Exchange is carried out through the trading platform of Deutsche Börse - T7. Transactions with financial instruments admitted to trading on the Exchange are carried out on the basis of orders entered for purchase and sale by exchange members and the quotations of market makers (exchange transactions). Orders and quotations are a firm request to buy or sell a certain amount of financial instruments at a certain or market price and with certain additional parameters.
The advantage of BSE AD as a place of execution is related to its physical location on the territory of the Republic of Bulgaria, which presupposes high efficiency in the work of the intermediary for execution of client orders. Account should also be taken of the better commission policy of this place of implementation compared to foreign ones. Given the fact that shares of Bulgarian companies are traded on BSE AD, this allows for the execution of client orders in the volume specified by the client, and the price of these shares is formed on the same market where they will be bought or sold. Last but not least, compensatory instruments are traded only on BSE AD as a place of execution. At the time of adoption of this Policy, the main shortcomings of this place of execution are the lack of liquidity of some financial instruments and the small number of traded shares.
The financial instruments admitted to trading on BSE AD are traded at their real value (without using margin). The parties to the transaction acquire all rights and obligations under the financial instruments (property and non-property). The acquirer of the financial instruments is obliged to pay the full value of the financial instruments together with the fees and commissions included in the value of the transaction, according to the current Tariff of the investment intermediary. The transferor of the financial instruments has the right to receive the full value of the financial instruments, subject of the transaction, reduced by the due fees and commissions, according to the current Tariff of the investment intermediary.
- OTC market (OTC) - directly, as the counterparty is another investment intermediary participating in the same market, or a client of the II, and the best performance will be achieved for the client.
b) Regarding derivatives and spot instruments:
With regard to trading in these instruments traded over-the-counter market at the time of adoption of this Policy party to each transaction appears IS Prime Limited and the same acts as a place of execution for all orders. The investment intermediary is not a party to these transactions - parties to these transactions are the clients of the Investment Intermediary and a third party in the EU. In this sense, Leno Markets is only an intermediary between the parties in receiving and transmitting orders from the client. When opening positions in these instruments by explicit order of the client, the best result is sought in a transaction on a non - regulated market. There is no alternative venue. In pursuance of the above, the specifics of the place of performance and the products and services offered by it should be clarified. In accordance with the applicable national law of the country of origin and the transposed European law in force, IS Prime Limited acts as a 'matched principal broker'. The latter is characterized by some restrictions on transactions for own account with financial instruments. In particular, the trade defined in Art. 4 (1) (38) of Directive 2014/65 / EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92 / EC and Directive 2011/61 / EU (MIFID II), namely "trading for own account, mediated through counter-transactions". The latter is also transposed into the applicable Bulgarian legislation - in § 1, item 29 of the Additional Provisions of the Markets in Financial Instruments Act. This in fact means a transaction in which the intermediary is the buyer for the seller and at the same time the seller for the buyer of the transaction, in such a way that it is not exposed to any market risk throughout the transaction, with both parties to the transaction at the same time, the transaction is concluded at a price that does not lead to profit or loss for the intermediary, except for a pre-announced commission, fee or tariff for the transaction. In the present case, IS Prime Limited is an intermediary by definition in the previous sentence. The above leads to several conclusions - for the liquidity provider does not arise any market risk, nor accumulates profit or loss depending on the transaction, respectively, in the execution of both parties to the transaction, does not give priority to either party. On the other hand, using a similar type of liquidity provider, the investment intermediary provides an aggregate source of liquidity - ie. IS Prime Limited uses multiple Tier 1 liquidity providers to provide the best possible price on the market. The shortcomings of this place of performance are the lack of obligation to publish quality performance reports under Delegated Regulation (EU) 2017/575 and the forthcoming classification of the same as a place of performance by a third country outside the European Union.
In conclusion, a similar type of liquidity providers provide the ability to quickly fill orders for purchase and sale and have the following advantages - speed, information disclosure, efficiency, instruments with various underlying assets, high liquidity, risk management, margin management, availability of trading platforms for access.
(2) II “Leno Markets” JSC shall not structure or charge its commissions in a way that discriminates incorrectly between the different execution venues. Detailed information on specific venues is available on an annual basis on the website of Leno Markets EAD, in accordance with Article 3 (1) and (2) of Regulation (EU) 2017/576.
(3) The execution venues list under para. 1 is not an exhaustive list. The Investment intermediary may also use other execution venues, that it deems to be appropriate according to this Policy. The Investment intermediary shall assess and analyze on a regular basis the possible new execution venues and shall update para. 1 above. In this connection the client shall be notified about the amendments made to the list.
(5) In regards to specific financial instruments, it is possible that in essence the order could be executed at only one venue. When executing clients' orders in such circumstances it is considered that the investment intermediary has achieved the best result for the client. In case “Leno Markets” JSC chooses to use a single place of performance, the II ensures that this allows it to consistently receive the best result for its clients and ensures that the selected entity will allow them to receive results that are at least as good as the results they could get from using alternative implementation entities.
V. SUBMISSION AND EXECUTION OF CLIENTS’ ORDERS
Art. 9. The investment intermediary shall be obliged to execute immediately, honestly and accurately the accepted client orders, including to observe the order of receipt of identical orders. Leno Markets accepts and transmits orders from the client under the best conditions and making sufficient efforts to achieve the best execution.
Art. 10. (1) The Investment intermediary accepts orders for transactions with instruments, submitted personally by the client or by his proxy, and in the cases of clients – legal entities – by his authorized representative. When submitting orders on the spot in the office of the Investment Intermediary, they are accepted only in the offices entered in the register kept by the Financial Supervision Commission (FSC). Except in cases of portfolio management the investment intermediary engages in transactions with financial instruments on behalf of clients only on the basis of clients’ orders with the following minimum content:
a) the names (business name) and the unique client number of the client and of his representative, and if such numbers have not been assigned – the respective identification data. Where an investment intermediary assigns to its clients a unique number, it shall keep for them a register which will contain at least that number and the following data: the full name, Personal Identification Number, domicile and address, or business name, identification number BULSTAT, tax number, seat and address of the client, and if the client is a foreign person – analogous identification data. In the register according the previous sentence shall be also entered the relevant identification numbers for his representative or proxy, number and date of the power of attorney, and the investment intermediary may assign a unique number also to the representative or the proxy;
b) type, issuer, ISIN code of the issue, or name of the instrument, respectively characteristics of the derivative financial instrument and number of financial instruments to which the order relates;
c) type of the order;
d) nature of the order (acquisition or disposal of a financial instrument);
e) unit price and total amount of the order;
f) the order’s term of validity;
g) execution venue if the client has determined such;
h) quantitative execution of the order (in part, in whole);
i) way of payment;
j) date, hour and place of giving the order;
k) other specific instructions by the client;
l) indication of whether the order was given as a result of investment advice;
m) way of giving the order.
(2) Paragraph 1 is not applicable when the order is submitted via an electronic trading platform, where the order details are not determined by the investment intermediary.
(3) The unique serial number is detailed in the order.
(4) When submitting an order, the client is informed of:
a) the current Policy;
b) the financial instruments and the risks associated with them;
c) the execution venues/the execution venue, on which the investment intermediary relies substantially when fulfilling its obligation to take all reasonable steps to consistently achieve the best possible results when performing clients’ orders and to indicate the execution venues, used for each class of financial instruments, in case the II uses only one place for execution of client orders;
d) the costs and fees of the transaction;
e) where the clients’ assets (financial instruments and cash) can be stored, by whom they can be stored and what is the responsibility of that person.
(5) The giving of the orders by a proxy shall be done only if the proxy submits notarially attested power of attorney, which contains representative authority for execution of actions of disposal with financial instruments and a declaration by the proxy that he does not carry out by occupation transactions with financial instruments, as well as that he did not execute such for a one-year period prior to the submission of the order, that it does not have inside information that the financial instruments - subject to a sale or exchange order, are not blocked in the depository institution, no pledge or attachment has been established on them, and the transaction is not represents a covert purchase or sale.
(6) The investment intermediary may accept orders of clients under para. 1 in absentia by remote means of communication: by telephone or by e-mail. By signing a contract for the provision of a certain type of investment service, the client gives his consent to record the telephone conversations held with the employees of the investment intermediary, related to the reception, transmission and execution of client orders. The Client is informed and agrees that when accepting orders by phone, the employee of the Brokers Department will ask the client control questions to establish identity between the available personal data in the intermediary's database and the data provided by telephone by the client. purpose of correct identification. The client, respectively his representative, sends to the Project a copy of his identity document signed according to the previous sentence, if it is established that the document kept by the intermediary is not valid, and for clients - legal entities - a copy of commercial registration documents containing data. for the establishment and representation if there is a change in the data in the public register. In case of placing orders for transactions over the telephone, the investment intermediary is obliged to make a record of the conversation with the client, which attests the content of the given order pursuant para. 1. In case of placing orders for transactions by another remote means of communication, the investment intermediary is obliged to electronically store the information, provided by the client in relation to the orders.
(7) The investment intermediary may accept orders of clients under para. 1 through an electronic trading system providing the client with access to a specific place for execution. The access to the system under the previous sentence and the entry of orders by the client is carried out through web, computer and / or mobile applications, which provide reliable identification of the client. When the client submits an order through the granted access, for instruments that are not admitted to trading on a regulated market, it is considered that the client has been notified of all essential parameters of the transaction.
(8) The investment intermediary may not accept and execute a client's order if the client has not been identified and if the client or his representative has not submitted and has not signed the necessary documents, has submitted documents with obvious irregularities or the data in they are incomplete, have inaccuracies or inconsistencies or there is another circumstance that raises doubts about proper identification or representation. Regardless of its form, the content of the order must comply with regulatory requirements.
(9) Paragraph 6 shall not apply with regard to transfer of dematerialized financial instruments from e personal account under a client sub-account to the investment intermediary in the Central Depository.
(10) Upon the order acceptance, the person accepting it shall check the identity of the client, or of his representative.
(11) The Investment intermediary shall provide to the client a signed copy of the accepted order under para. 1, unless it is given according to para. 6 and 7.
Art. 11. At the moment of submission of the written orders, respectively immediately after the receipt of the orders, submitted by remote method, the same shall be registered in the system of the II, assigning them a unique serial number. Orders submitted through an electronic trading system are automatically registered in the system. Clients' orders are executed after checking their content and compliance with regulatory requirements, in accordance with this Policy (validation). Validation is performed for the submitted written orders, respectively submitted by remote method in the order of registration of orders in the system, in which order they are implemented, except when the characteristics of the order or the prevailing market conditions make it impossible, or the client's interests, according to this Policy require otherwise.
Art. 12. (1) Upon order acceptance, the investment intermediary shall require from the client, or from his representative, to declare if:
a) he possesses inside information about the financial instruments, to which the order relates, and about their issuer, if the financial instruments to which the order relates or on the basis of which the financial instruments – subject of the order are issued, are traded on a regulated market;
b) the financial instruments – subject of sell or exchange order, are blocked at the depository institution, in which they are safeguarded, whether there is a pledge set up on them or distraint levied;
c) the transaction – subject of the order, constitutes a concealed purchase or sale of financial instruments. The refusal to submit a declaration shall be certified by a signature of the client at the respective place in the order.
Art. 13. (1) The investment intermediary shall execute the client orders on the following conditions:
a) immediate and accurate registration and allocation of the orders for execution;
b) immediate execution in the sequence of their receiving of identical client orders, unless the characteristics of the order or the prevailing market conditions make this unrealizable, or the interests of the clients require otherwise;
c) the investment intermediary shall inform a retail client about the arisen objective difficulties, obstructing the exact execution of the orders, immediately upon coming to know of them.
(2) When the investment intermediary is responsible for overseeing or arranging the settlement of the executed order, he takes all reasonable steps to guarantee that all of the client’s financial instruments or funds received upon the settlement of this order, are delivered promptly and correctly to the respective client.
(3) The investment intermediary shall not misuse information relating to pending client orders, and shall take all reasonable steps to prevent the misuse of such information by any of its relevant persons.
(4) The best execution of the order is achieved when II “Leno Markets” JSC has made the sufficient and possible efforts to establish the best price for the client according to the order’s details, amount of costs, probability of execution, as well as all the other circumstances related to the execution of the order.
Art. 14. (1) The Investment intermediary shall refuse client’s order if the client respectively his representative refuses to file the declaration under Art. 9, para. 1 above, it has been declared that he possesses inside information or he declares that the transaction – subject of the order, constitutes a concealed purchase or sale of financial instruments. The refusal under sentenced one shall be certified by a separate document, signed by the client.
(2) The investment intermediary shall not have the right to execute an order, if it has been declared or if the intermediary establishes that the securities – subject of an order for sale, are not available on the client’s account or have been blocked in a depository institution, as well as if there is a pledge set up on them or distraint levied.
(3) The prohibition under para. 2 in relation to pledged financial instruments shall not apply if the acquirer has been informed about the set up pledge and has stated express consent to acquire the pledged financial instruments, there is an explicit consent of the pledge creditor in the envisaged cases under the Registered Pledges Act;
(4) The prohibition under para 2 in relation to an order for the sale of financial instruments which are not available on the client’s account, shall not apply in the cases when the investment intermediary ensures otherwise that the financial instruments, subject of the sale, shall be delivered on the day of the transaction’s settlement, as well as in other cases as laid down in an ordinance.
(5) An investment intermediary shall not have the right to execute a client’s order for transactions with financial instruments, if that would result in violation of the Delegated Regulation 565/2017, the Markets in Financial Instruments Act (MFIA), Law on Measures against Market Abuse with Financial Instruments (LMMAFI), the Act on Special Investment Purpose Companies (ASIPC) or some other acting statutory acts.
Art. 15. In case of a limit order by a client relating to shares admitted to trading on a regulated market, where it is not executed without delay in accordance with the effective market conditions, the investment intermediary shall take measures unless the client expressly gives another instruction to execute the order as soon as possible by publicly announcing the order of the client under the procedure of Art. 70 of Delegated Regulation 565/2017.
Art. 16. The obligation under Art. 14 is considered to be fulfilled by II “Leno Markets” JSC with the transmission of the limit order on a regulated market and/or a multilateral trading facility or when the order is published by a service provider established in a Member-State.
Art. 17. II” Leno Markets” JSC may not comply with the obligation under Art. 14 if the volume of the order does not correspond to the normal market volume.
Art. 19. (1) II “Leno Markets” JSC shall not execute orders on behalf of its clients unless they have given their prior consent to this Policy.
(2) By accepting this Policy, the client expressly agrees to II” Leno Markets” JSC to execute orders submitted by him outside of trading venues. In the case of off-site execution, the investment firm informs the client that the counterparty's risk may be increased, as well as the reduced probability of execution, speed, settlement, which may generally increase the overall risk of the transaction.
Art. 20. An investment intermediary shall demand from a client, who gives an order for the purchase of financial instruments, to provide to it the cash needed for the payment on the transaction – subject of the order, upon giving the order, except if the client attests that he will fulfill his liability for payment, as well as in other cases as laid down in an ordinance. If the rules of the execution venue on which the transaction will be concluded, allow the execution of a transaction where the payment for the financial instruments is not effected simultaneously with their transfer, the investment intermediary may not demand payment by the buyer, if there is express written consent of the seller for that. This shall apply accordingly also to other transfer transactions with financial instruments.
Art. 21. The information stored by the investment intermediary about the transactions concluded with financial instruments on behalf of a client contains at least information about the client’s identity and the actions undertaken in implementation of the Law on Measures against Money Laundering and Law on Measures Against the Financing of Terrorism. Art. 22. The investment intermediary shall keep the information about the provided services and activities under Art. 6, para. 2 and 3 of the MFIA for at least 5 years.
VI. AGGREGATE ORDERS POLICY
Art. 23. According to this policy, the investment intermediary is not entitled to execute a client's order by aggregate them with other client's orders, unless the following conditions are met:
a) the aggregate of orders and transactions will not be to the detriment of any of the clients whose orders are aggregated;
b) the investment intermediary has explained to each client whose order is aggregated that the merger may be unprofitable to the client in relation to the specific order;
c) the investment intermediary has accepted and effectively applies a split order policy that contains sufficiently detailed and clear conditions for the fair split of the aggregated orders and transactions, including indicating how the volume and price of the orders determine the split and settlement of partial execution cases. The policy referred to in the previous sentence is specified in the next section of this policy;
d) the client's order allows partial execution;
e) the aggregated order itself permits partial execution.
Art. 24. (1) II “Leno Markets” JSC aggregate client orders in the following cases:
a) in case, there are orders from clients with the same price and at the execution venue, the best counter offer is for a larger quantity and a price that satisfies the orders. Thus, both orders are executed at the same price, but in the processing first is the order accepted earlier;
b) when customer orders are at different prices and the execution venue, the best counter offer is for a larger quantity and a price that satisfies both orders. Again, both orders are executed at the same price and in the processing first is the order accepted earlier;
(2) In case when the aggregate offer is set up, the counter offer is changed and the aggregated offer is fulfilled in several parts and at different prices, or even partially fulfilled, the earlier order shall be given priority.
VII. POLICY FOR SEPARATION AND DISTRIBUTION OF ORDERS
Art. 25. (1) In the cases under the preceding Article, where the aggregated order is executed in accordance with this policy, the investment intermediary shall apply rules for the fair separation of the aggregated orders and transactions established in this and subsequent articles.
(2) In cases where the investment intermediary aggregate an order of a client with one or more other client orders and the aggregated order is thus fully executed, it distributes the related transactions - the result of execution of the order according to the following rules:
a) The result of the transaction - the result of execution of the aggregated order, is allocated only and only among the orders included in the aggregated order;
b) The aggregate order shall be separated according to the exact volume (number) of financial instruments of the orders placed therein. Thus, in the separation, the clients whose orders were included in the aggregated order, since the aggregated order was fully executed, receive as execution the exact number (volume) of financial instruments, which number (volume) corresponds exactly to the order submit by them;
c) The transaction resulting from the execution of the aggregate order is executed at a specified price and the price is valid for all transactions included in the aggregated order. Thus, in the distribution, the clients whose orders were included in the aggregated order, since the aggregated order was executed in full compliance with this rule, receive in the distribution as execution the transaction price as a result of the execution of the aggregated order, which price corresponds exactly to the submitted of them ordering, or better. In the cases of the preceding sentence, when a better price is achieved, the benefit belongs to the customer.
Art. 26. (1) In case the investment intermediary fails to execute in full, fully consolidated client orders, the investment intermediary distributes the execution (in terms of realized amount of financialinstruments and execution price) among all clients whose orders have been aggregated, hereinafter referred to as 'the distribution'.
(2) The distribution shall be made in accordance with the general rules set out below. In the distribution, the II may at its discretion adopt one of the two referred to in Art. 27 methods, depending on, but not limited to, any of the following factors:
a) the market in which the orders are executed;
b) the existence of a competitive bidding principle;
c) specific conditions concerning the volume of orders submitted;
d) the limited amount of the issue;
e) other factors.
Art. 27. The investment intermediary uses the following methods for allocating pooled orders:
a) Proportional Allocation: Each client receives a proportional performance, according to the proportion of his order in the common, combined order. The execution price for all will be the weighted average cost of all transactions (if more than one) performed in the execution of the combined order.
b) Sequential distribution: Subject to the order of receipt of orders in the investment intermediary and depending on the price specified in the order will be satisfy / execute orders with a better price, and with orders with identical ones prices - according to their sequence of entry into the system of investment intermediary. The execution occurs until the quantity of the aggregate order is exhausted. The last order can be partially satisfied unless it is of the "all or nothing" type. The price of execution is determined according to the transactions (if more than one) of priorities "price" and "time of receipt of the order".
VIII. REVIEW AND UPDATE OF THE POLICY
Art. 28. (1) II “Leno Markets” JSC permanently monitors the effectiveness of this Policy and the quality of the execution of the orders and, where necessary, takes corrective measures to the irregularities detected.
(2) A revision of thе Policy and the agreements for execution of clients’ orders is made once a year.
(3) A revision under para. 2 shall also be carried out whenever a material change that can affect the investment intermediary ability to ensure best results for execution of client orders when using the execution venues which are included in the policy for order execution occurs. (4) The Investment intermediary is required to promptly notify its clients of any changes to this Policy.
IX. ADDITIONAL PROVISIONS
§ 1. Definitions:
1. Throughout this Policy, the definitions used have the meaning set forth against, except in contradiction with the legal definition, in which case the latter will prevail:
a) "Client" means an individual or legal person to whom an investment intermediary provides investment or ancillary services.
b) "Professional client" means a client who has the experience, knowledge and skills to take self-investment decisions and properly evaluate the risks associated with investment, and which meets the criteria on the basis of which they qualify the clients of II “Leno Markets” JSC.
c) "Non-professional client" means a client who is not designated as a professional client or as an acceptable counterparty.
d) "Eligible Counterparty" means an investment firm, a credit institution, insurance company, collective investment scheme, management company, pension fund, pension insurance company, other financial institutions, licensed or regulated by European Union law and by Member States, national governments, public debt management bodies, central banks and international institutions, as well as third-country entities to whom requirements equivalent to those of European Union law apply. Eligible counterparties may be considered as other persons who meet the requirements set out in Art. 71 of Delegated Regulation 565/2017 requirements, including persons from third countries.
e) "Place of performance" means the place where the investment firm executes client orders, such as a regulated market, a multilateral trading system, an organized trading system, a systematic participant, a market maker, another liquidity provider or entities who perform functions similar to those performed by any of the above entities in a third country.
§ 2. Exceptions:
1. This policy does not apply in the following cases:
a) eligible counterparties - if the client is classified by the investment firm as an eligible counterparty, it does not benefit from the best execution protection under this Policy. Any customer identified as an eligible counterparty may explicitly request that it not be considered as such in whole or in particular. When concluding a transaction with or for an eligible counterparty from a third country, the investment firm should have the express confirmation of the entity that it agrees to be treated as an eligible counterparty.
b) special instructions to the client - where the client provides specific instructions regarding the entire order or any aspect of the order, including the requirement to execute the order at a specific place of execution, the investment firm shall execute the order in accordance with those instructions. It is thus considered that the investment firm has taken all reasonable and necessary steps to achieve the best result for the client with respect to the entire order or aspect of the order contained in the client 's instructions.
2. When placing an order on an electronic trading platform, the client selects all the order parameters and the latter is classified as submitted with special instructions. In this case, the investment intermediary acting on behalf of the client by granting him access to the system shall be deemed to have fulfilled his efforts to achieve the best result for the client. In case the electronic system allows some order parameters not to be specified, the investment intermediary takes care of the best performance in accordance with this Policy.
X. FINAL PROVISIONS
§ 1. When problems are encountered in practice, the solving of which requires an amendment or supplementation to this Policy, the competent authority may change it in due course, being governed by all legal requirements. Representatives of the Project may issue orders and instructions on the implementation of this Policy.
§ 2. This policy is provided and is permanently available to all clients and potential clients on the website of the investment intermediary www.leno.com. Upon request, Leno Markets may provide this policy to another durable medium. The Investment Intermediary notifies its clients of any change in this Policy through a notice published on its website.
§ 3. Leno Markets considers that the clients have given their preliminary consent with subsequent changes and additions to the current policy, if they do not express their explicit disagreement with the changes or additions, within 7 days from the publication of the changes in it, on the website of the investment intermediary www.leno.com.
This Policy is approved by a resolution of the Board of Directors of II “Leno Markets” JSC dated October 6, 2020, and shall enter into force on the date of its adoption.
This Policy supersedes all prior provisions of the II “Leno Markets” JSC Policy for execution of clients’ orders.