1. Introduction
This Order Execution Policy is aimed at the end client, and forms part of the terms and conditions that are distributed to new clients and all existing clients when updates to our terms are made.
This Order Execution Policy sets out the arrangements we have in place to obtain the best possible result for clients when executing orders or transmitting orders for execution in relation to relevant financial instruments. It explains the factors we take into account, the execution methods and counterparties we may use, and the controls and governance that support our best execution obligations. This Order Execution Policy covers all services within which a transaction could occur within James Sharp & Co; Execution Only, Advisory & Discretionary services.
1.1 When we buy or sell shares or other investments on your behalf, we are required to ensure that we take sufficient steps to get the best possible results for you. This is referred to as our “best execution” requirement. This policy sets out how we seek to meet our best execution duties to you.
1.2 You acknowledge that you have been made aware of and accept the nature, policy and processes which we have in place for providing best execution. You can request a standalone copy of our Order Execution policy from our Risk & Compliance Department, or it may be found on our website (www.jamessharp.co.uk).
1.3 In the absence of any express instructions from you, we shall have full discretion to choose a relevant venue from our current list of venues for executing any order or orders, or to elect to transmit any order to another entity for execution; but in doing so we shall assess and balance a range of factors, including those set out in our Agreement with you, which, in our reasonable determination, we consider to achieve the best result for you.
1.4 We may execute your orders outside a Regulated Market (RM) , Multilateral Trading Facility (MTF) or Organised Trading Facility (OTF) where we consider that this is necessary or appropriate to obtain the best possible result for you. This may expose you to counterparty risk and other risks that can differ from those arising where an order is executed on a trading venue. As such, we require your consent should we need to undertake executing orders outside a trading venue in these circumstances.
By entering into an agreement with James Sharp & Co, you are confirming consent with this Order Execution Policy, which would include consenting to the Firm undertaking transactions outside a RM, MTF or OTF where necessary or appropriate.
2. Execution Factors and Specific Instructions
2.1 When executing orders on your behalf, or when transmitting orders to another entity for execution, we will take all sufficient steps to obtain the best possible result for you, taking into account the execution factors relevant to the order and the market in question.
2.2 The execution factors we may take into account include price, costs, speed, likelihood of execution, likelihood of settlement, size, nature of the order, liquidity, market impact, and any other consideration relevant to the execution of the order.
2.3 For retail clients, the best possible result will ordinarily be determined by total consideration, being the price of the financial instrument and the costs related to execution, unless the nature of the order, the characteristics of the financial instrument, or prevailing market conditions indicate that another factor or combination of factors should take priority in order to obtain the best possible result.
2.4 In determining the relative importance of the execution factors, we may also take into account the characteristics of you as our client, the characteristics of the order, the characteristics of the financial instruments that are the subject of that order, and the characteristics of the execution venues to which that order can be directed.
2.5 Where you provide us with a specific instruction in relation to an order, or a particular aspect of an order, we will execute the order in accordance with that instruction so far as reasonably possible. You acknowledge that a specific instruction from you may prevent us from taking the steps that we have designed and implemented in this policy to obtain the best possible result for the elements of the order covered by that instruction.
2.6 This policy applies to retail clients and professional clients. For retail clients, we will ordinarily determine the best possible result by reference to total consideration, being the price of the financial instrument and the costs related to execution, unless the nature of the order, the characteristics of the financial instrument, or prevailing market conditions indicate that another factor or combination of factors should take priority in order to obtain the best possible result. For professional clients, while price and costs remain of high relative importance, we may place relatively greater weight on other execution factors such as speed, likelihood of execution and settlement, market impact, access to liquidity, size, or the ability to work an order in a particular market, where this is appropriate to the client, the order and the relevant instrument. We may also apply this policy to eligible counterparties where applicable, although we do not currently expect to do so in the ordinary course of business.
2.7 This policy applies to the execution and transmission of orders in the financial instruments and products we arrange or deal in from time to time, which may include UK equities, overseas equities, preference shares, investment trusts, exchange traded funds, bonds, Open Ended Investment Companies, Unit Trusts and other relevant financial instruments and products. The execution approach adopted may vary depending on the nature of the instrument, the available market liquidity and the execution arrangements available to us.
3. Execution Venues, Third-Party Brokers and Monitoring
3.1 We may execute orders directly on an execution venue, execute orders outside a trading venue where permitted, or transmit orders to a third-party broker, counterparty, platform, fund manager or other entity for execution, in each case where we consider this to be in your best interests and consistent with this policy.
3.2 When selecting execution venues or third-party entities, we may take into account factors including the entity’s execution capability, access to liquidity, price competitiveness, costs, settlement efficiency, financial standing, operational resilience, expertise in the relevant instrument or market, and any other factor relevant to obtaining the best possible result on a consistent basis.
3.3 Where we rely on a third-party broker, counterparty, platform, fund manager or other execution entity, we will undertake initial due diligence and periodic review of that entity’s execution capability and execution quality. This review may include assessment of pricing, costs, fill rates, speed, likelihood of execution and settlement, settlement performance, handling of market and limit orders, error and incident data, operational resilience and any available execution-quality information. Where our monitoring identifies a deficiency or a material deterioration in execution quality, we will investigate the issue, consider remedial action, and where appropriate amend routing arrangements, impose conditions, restrict use, or remove the relevant entity from our execution arrangements.
3.4 In practice, we may execute orders with Market Makers in the market, including through Retail Service Provider systems, or by working orders over the telephone for larger or more illiquid trades. We may also use fund managers or their dealing arrangements to access Open Ended Investment Companies and Unit Trusts. The execution method used will depend on the relevant instrument, the size and characteristics of the order, and prevailing market conditions.
3.5 The principal categories of execution venues and arrangements on which we place significant reliance may include: Regulated Markets and other trading venues for listed securities; market makers and Retail Service Provider systems; third-party brokers and counterparties; and fund managers, platforms or transfer agents. The venues we rely on are usually member firms of the London Stock Exchange and Aquis Exchange, member firms of overseas stock exchanges, collective investment scheme managers and any other UK and overseas Execution Venues that James Sharp deems as in accordance with this Policy.
Below are listed the most common execution venues and/or counterparties per asset type:
| Instrument | Execution Venue |
|---|---|
| Gilts | Winterflood Securities Ltd Singer Capital Markets Securities Ltd Collins Stewart Ltd Peel Hunt LLP |
| Debt Instruments | Canaccord Genuity LtdJane Street Financial LtdWinterflood Securities LtdPeel Hunt LLPCollins Stewart Ltd |
| Equities | Peel Hunt LLPWinterflood Securities LtdInvestec Bank UK PlcSinger Capital Markets Securities LtdPanmure Liberum Ltd |
| Exchange Traded Products & Funds | Jane Street Financial LtdWinterflood SecuritiesPeel Hunt Ltd |
| Other Instruments | Northern Trust InternationalWinterflood Securities LtdBNY Mellon Global Funds Plc |
Note; this venue/counterparty list is not exhaustive and may change from time to time.
3.6 Execution quality is monitored through trade monitoring software and specific tests designed to assess best execution outcomes across venues and execution methods, including measures such as volume weighted average price where appropriate. We may supplement this monitoring with such additional oversight, review or exception analysis as we consider appropriate.
3.7 We maintain records and management information to support our assessment of best execution outcomes. Where required by applicable law and regulation, we will prepare and publish information on the identity of the principal execution venues or firms used for each class of financial instrument and a summary of execution quality achieved. We will keep our disclosures and record-keeping under review in light of applicable FCA rules and relevant technical standards, including the regulatory framework derived from MiFID II concerning annual venue and execution-quality reporting.
4. Order Handling, Aggregation, Allocation and Limit Orders
4.1 We maintain procedures and arrangements designed to provide for the prompt, fair and expeditious execution of client orders relative to other client orders and to our own trading interests. Otherwise comparable client orders will ordinarily be carried out sequentially and promptly in accordance with the time of their receipt, unless the characteristics of the order or prevailing market conditions make this impracticable or the interests of the client require otherwise. We will promptly inform a retail client of any material difficulty relevant to the proper carrying out of an order when we become aware of it.
4.2 We may combine your order with our own orders, those of our associates, partners or employees and orders of other clients, except where your order instructs us to the contrary. We will not combine your order with our own orders unless it is unlikely that the aggregation will work to your disadvantage (or the disadvantage of any other of our clients). Nonetheless, the effect of such aggregation may sometimes work to your disadvantage in relation to a particular order. We will allocate transactions entered into as a result of such aggregation fairly in accordance with FCA rules and our order allocation policy.
4.3 Where we aggregate one or more of your orders with those of any other person resulting in a series of transactions, we may determine the amount due from you (or on a sale, the amount due to you) as the price paid for each investment or a volume weighted average of the prices of a series of transactions. Orders received from you may be executed in a series of transactions over several days which may result in a report to you of the average of prices effected during the time required to affect a purchase or sale.
4.4 Limit orders are handled in accordance with the terms of the order, prevailing market conditions, and applicable venue, broker and counterparty arrangements. A limit order may not be executed immediately, or at all, if the specified price is not available or if there is insufficient liquidity. Where applicable, we will take steps to facilitate the earliest possible execution of a client limit order in accordance with law and our procedures, unless you have expressly instructed us otherwise.
4.5 Limit orders may remain unexecuted, may be executed only in part, or may be delayed where the specified price is not available, market liquidity is insufficient, market conditions are volatile, or venue or counterparty rules affect execution. We monitor outstanding limit orders as part of our order handling and escalation procedures.
4.6 We reserve the right to refuse to accept limit orders
5. Policy Governance, Review and Material Changes
5.1 We will review this Order Execution Policy annually and whenever a material change occurs that affects our ability to continue to obtain the best possible result for clients on a consistent basis.
5.2 A material change may include, by way of example only, a significant change to the execution venues or third-party entities on which we rely, a material change in market structure, a significant change in the types of financial instruments or services we offer, a change in law or regulation, or a material issue identified through our monitoring or oversight arrangements.
5.3 We will implement any amendments to this policy that we consider necessary or appropriate. Changes to this policy will be reflected in our Terms and Conditions and published on our website.
5.4 This policy is approved by the Board and senior management.
5.5 We maintain arrangements to identify and manage conflicts of interest to ensure that remuneration, inducements, or commercial relationships do not override the duty to seek best execution, in accordance with applicable law and regulation. Further information is set out in our Conflicts of Interest Policy.