This policy details how Wren Investment Office Limited (the Firm) will comply with its overarching regulatory requirement of taking all the sufficient steps to obtain, when transmitting orders to, and/or placing decision to deal with other entities for execution, the best possible results for its clients.
The Firm is authorised by the Financial Conduct Authority (FCA) and, as such, will act in accordance to the rules as defined in the FCA Handbook, which will take precedence over the requirements of this policy.
This policy, and the Firm’s order execution arrangements, will be reviewed regularly, at least once a year, and amended as considered necessary by the Firm’s Management Body in the event of changing circumstances or regulations.
Best execution is the overarching requirement for firms to take ‘sufficient steps’ to provide the client with the best possible overall results on a consistent basis, and not just by providing the best price for an individual trade. To do this, the Firm shall take into account execution factors such as price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration considered to be relevant to the execution of client’s orders.
Nevertheless, where there is a specific instruction from the client the Firm shall execute the order following the specific instruction. If the client’s specific instruction covers one aspect of the order, the Firm will follow its execution policy for the other aspects to ensure best execution.
The Firm is responsible for transmitting client orders and as such is responsible for procuring best execution for those orders.
Best execution requirements apply to all financial instruments as listed in the Annex I of MiFID II, section C. The Firm transacts in the following classes of financial instruments:
This policy applies to Retail Clients and Professional Clients. In accordance with the Firm’s obligations to the client, it has notified the client of the client classification that applies to them.
When dealing with Retail Clients, there is a regulatory assumption that the client can rely on the Firm to protect their interests, and the Firm will apply best execution to all trades that the client places through it, which will be assessed on the basis of ‘total consideration’.
Total Consideration is defined as the sum of the price and the costs incurred by the client and it represents the price of the financial instrument and all costs associated with the execution of client’s order including execution venue fees, clearing and settlement fees, and any other fees paid to third parties involved in the execution of the order.
The Firm will, where possible, where Third Platform is custodian for the client, route trades through Fidessa as no brokerage commission is payable. A quote is received from Fidessa prior to execution that can either be accepted or rejected. The Firm works closely with Brokers other than Fidessa to ensure the consideration achieved is sufficient and in line with the market and any agreed costs. Post trade, the Firm monitors the Volume Weighted Average Price and examines Quote Recaps from Bloomberg to ensure the price achieved is in line with expectations.
When dealing with Professional Clients, the Firm does not differentiate between an ‘elective’ Professional Client and a ‘per se’ Professional Client and will apply Best Execution to all transactions undertaken for its clients.
This policy does not apply to Eligible Counterparties where carrying out Eligible counterparty business and as such, the Firm does not owe best execution to transactions undertaken by clients classified as such.
The Firm’s activities primarily involve providing wealth management services to UHNWI and family members.
This involves offering both advisory and discretionary investment advice to a number of very wealthy families and endowments.
The Firm has permission to carry out the following regulated activities:
This means that the Firm will be executing and transmitting client orders in these instruments in accordance with this policy.
Regardless of the type of order that the client transacts with the Firm, best execution will apply. This will normally include order types commonly used on an execution venue, as defined by MiFID.
The Firm has designed and implemented specific arrangement to take all sufficient steps to obtain, when executing client orders, the best possible results taking into account the execution factors including:
In accordance with its regulatory requirements the Firm has prepared a comprehensive document summarising those arrangements and explaining clearly how the orders will be executed by the Firm. This document is given to clients before entering into an agreement to provide investment services.
This information includes a link to the most recent execution quality data published by the execution venues listed in this order execution policy.
Where a client makes reasonable and proportionate requests for information about its policies or arrangements and how they are reviewed, the Firm will answer clearly and within a reasonable time. The Compliance function is in charge of this process. It may include demonstrating that the client order where executed in accordance with this policy.
The Firm does not receive any third party payments or non-monetary benefits.
In the absence of express instructions from the client, the Firm will exercise its own discretion in determining the relative importance it assigns to the execution factors (or the process by which it determines their relative importance) that it needs to take into account for the purposes of providing the client with the best possible result.
These execution factors have been listed in order of priority and will include, but are not restricted to, the:
In the absence of express instructions from the client, the Firm will exercise its own discretion in determining the execution strategy it needs to apply to obtain the best possible results where executing a client order.
When transmitting client orders, the Firm will ensure the venues selected are in the clients’ best interests by considering the following:
Market Orders are transmitted to Ria, Third Platform Services (Fidessa), Winterflood Securities and brokerage desks attached to the client’s own nominated custodian. Occasionally, the Firm may place Limit Order with similar venues.
Orders in Collectives are transmitted to Third Platform Services, the client’s own custodian or placed directly with the Fund Manager.
*The Firm can only use Third Platform Services where they are custodian to the client on their platform.
The Firm has selected the following venue(s) by class of financial instruments on which to execute orders/to whom orders are transmitted:
When selecting venues, the Firm reviewed the following:
Standard corporate documentation available on Companies House such as incorporation, directors and accounts
The Firm will avoid trading outside trading venues on behalf of clients.
The other entities to whom the Firm transmit/places orders for execution may execute orders outside a trading venue. To ensure that its clients understand the risks of such type of execution the Firm has included in its “Information on order execution policy” document all the necessary elements highlighting the risks and benefits of such mode of execution.
Where the client provides the Firm with a specific instruction in relation to an order, or any particular aspect of that order, including an instruction for the trade to be executed on a particular venue, the Firm will execute the order in accordance with the client’s instruction.
The Firm will take all the steps it has designed in this policy to obtain the best possible results for the client in respect of the order, or aspect of the order, not covered by the specific instruction. It is however possible that the specific instruction may prevent the Firm to take all the steps it has designed in its order execution policy to obtain the best possible results in respect of the elements of the order not covered by the specific instruction.
Where the client provides the Firm with a specific instruction in relation to an order, the Firm will also transmit the specific instruction to the entity to which the order is transmitted in order to ensure that the other entity will execute the order in accordance with the client’s instruction. It is however possible that the specific instruction may prevent the other entity to take all the steps it has designed in its order execution policy to obtain the best possible results in respect of the elements not covered by the specific instruction.
For each financial instrument that is traded OTC, the Firm before proposing the price to the client and/or executing the order will check the fairness of the price by comparing the price to external market data or reference prices in the same financial instrument or a comparable financial instrument if no reference price is available in the same financial instrument.
Orders submitted through TPS (Fidessa and Collectives), where custodian services are provided on the TPS platform, are not subject to brokerage charges. Ria Global Markets charge 5bps for brokerage and Winterflood Securities charge 10bps.
The Firm will identify and disclose the following costs:
The Firm will summarise and make public on an annual basis, for each class of financial instrument, the top five execution venues in terms of trading volumes, where it has executed client orders in the preceding year, together with information on the quality of execution obtained.
The Firm will monitor the effectiveness of its order execution arrangements and order execution policy in order to identify and, where appropriate, incorporate any amendments to procedures. The Firm will monitor the prices available in the wider market to make sure that its executing parties are offering fair prices and that they continue to provide the best results for clients.
The Firm will monitor all trades post-execution to ensure prices are in line with either the Volume Weighted Average Price for the instrument or Quote Recap from Bloomberg. The COO is responsible for ensuring best execution is taking place.
All trades subject to best execution are logged in a spreadsheet that details the date and time of execution, instrument name and identifier, nominal, price, trade direction, total consideration, execution venue, check used (i.e. VWAP and/or QR) and slippage costs.
The Firm monitors all trades to ensure they are executed within a reasonable period after being passed to a venue for execution. Slippage costs are monitored for all direct trades. If a client was disadvantaged by a delay in trade execution, the Firm would work with the venue to determine the reasons for the delay and review whether the incurred slippage was reasonable, and, if appropriate, the Firm would ask the venue to compensate.
The Firm will assess, on a regular basis, whether the execution venues included in the order execution policy provide for the best possible result for clients or whether it need to make changes to its arrangements.
The Firm will review its order execution arrangements and order execution policy at least annually or whenever a material change occurs that affects its ability to continue to obtain the best possible result for the execution of client orders on a consistent basis using the venues included in its order execution policy.
The Firm will notify clients of any material changes to its order execution arrangements or order execution policy as described above by posting the information on its website.
The Firm’s commitment to provide clients with “best execution” does not mean that it owes clients any fiduciary responsibilities over and above the specific regulatory obligations placed upon it or as may be otherwise contracted between the Firm and clients.
Clients remain responsible for their own investment decisions and the Firm will not be responsible for any market trading loss clients suffer as a result of those decisions.
Any breaches of the Order Execution Policy will be recorded on the Firm’s breach log in conjunction with its regulatory breach policy.