Best Execution Policy

L-BRIDGE CAPITAL PTE. LTD. (“LBC”)
BEST EXECUTION POLICY
(“DISCLOSURES”)

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1.    Introduction & Purpose
a.    Reference is made to the MAS Notice on Execution of Customers’ orders (SFA 04-N16), in respect of the implementation of written policies and procedures for the following:
i.    to place or execute customers’ orders on the best available terms; and
ii.    to place or execute comparable customers’ orders in accordance with the time of receipt of such orders, commonly referred to as “Best Execution”.

b.    This disclosure statement provides relevant clients with information on order execution under LBC’s Best Execution policy, including the considerations and approach taken by our firm to provide Best Execution for our clients in the execution of relevant trades.

c.    To the extent that you maintain your business relationship with LBC, it will be on the basis that you have read and understood this policy disclosure.

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2.    Definition and Scope
a.    Best Execution refers to the placement and execution of clients’ orders for capital markets products on the best available terms (taking into account a range of factors).

b.    Best Execution applies to clients who have engaged LBC for discretionary portfolio management. LBC’s best execution policy will not apply to clients who have engaged LBC for investment advisory services or non-discretionary mandates (“Advisory Clients”).

c.    This disclosure applies to clients of LBC who holds Accredited Investor status (“Clients”). LBC does not enter into any fund management agreements with parties who do not hold Accredited Investor status.

d.     Execution venue refers to the private banks and asset management firms with which the relevant clients maintain a relationship with.

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3.    Execution of Orders
a.    Depending on the type of product, LBC will execute Clients’ orders directly with an intermediary or counterparty appointed by LBC or a financial institution with which Clients choose to maintain a banking relationship (“Approved Counterparty/Approved Counterparties”). 

b.    For non-collective investment schemes, LBC will place Clients’ orders with the Approved Counterparties which will in turn provide a quote, where possible, in accordance with its Best Execution policy. 

c.    If LBC experiences material difficulty relevant to the proper execution or transmission of orders, LBC will inform you promptly upon becoming aware of the difficulty. Sometimes, due to exceptional circumstances on Approved Counterparty’s part  or disruption to LBC’s operations (such as a disruption of the execution system or exceptional market conditions), LBC may exercise appropriate discretion to employ other methods of order placement in line with its business continuity management and procedures.

d.    Where appropriate and on best effort basis (e.g. for fixed income or structured products), LBC will seek multiple quotes from Approved Counterparties prior to order placements. Where multiple quotes are not available, we will exercise our professional judgment (factoring in for example, comparisons from other sources if available) to decide if the quote is reasonable and fair. 

e.    Best execution considerations for collective investment schemes is typically achieved by executing at the relevant net asset value on the dealing date. LBC will be deemed to have satisfied its Best Execution Policy by acting as a price taker with respect to the price component of the collective investments scheme investment.

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4.    Delivery of Best Execution
a.    In order to achieve the best possible execution outcome for Clients, LBC will consider a range of execution factors relevant to the placement or execution of the orders. The relative importance of the factors listed below may change from time to time depending on circumstances and priorities at the time of order placement.

b.    The Execution Factors that we will consider are (not in any order of priority):
i.    Price: this is the price a capital markets product is executed at;
ii.    Costs: this includes implicit costs such as the possible market impact, explicit external costs e.g. exchange or clearing fees and internal costs that are incurred/payable by us to third parties involved in the execution of your order;
iii.    Speed: the time it takes to execute your order;
iv.    Likelihood of execution and settlement: the likelihood that the approved counterparties will be able to complete your order;
v.    Size and Nature: the order size and how the characteristics of your order can affect how Best Execution is achieved.
vi.    Overall relationship and service quality: the quality of service provided by an Approved Counterparty through the life cycle of transaction and consideration of other value-added services (e.g. research support, access to IPOs / new issues) provided by counterparty;
vii.    Any other circumstance that, in our opinion, is relevant to the execution of an order.

The applicability of, and importance attached to, each Execution Factor will vary according to the type of transaction that is being executed, the circumstances during order placement and the instructions, if any, that clients give to LBC. In determining the relative importance of these factors, we will use reasonable judgment together with our understanding of the appropriate execution criteria for the specific transaction. For example, there may be circumstances when transacting a large order, minimising market impact might be deemed to be more important than price or, when trading an illiquid product, certainty of execution might be deemed to be more important than price.

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c.    In order to determine the relative importance of each execution factor, we will consider:
i.    The client type (including your categorization as Institutional Investor or Accredited Investor); 
ii.    the characteristics of the execution venues or brokers to which the order can be directed;
iii.    the characteristics of the order; and
iv.    the characteristics of the capital markets product.

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d.    Where a capital markets product is traded on multiple execution venues and/or may be executed via multiple Approved Counterparties, we will prioritize having the trade executed where the Client has sufficient monies to fund a trade, as this would likely be the most appropriate and advantageous option for you in terms of price, execution speed and probability of settlement.

    Specific instructions
e.    When executing specific instructions from you to execute or transmit an (or part of an) order in a certain way, we will have satisfied our Best Execution obligation if we comply with your specific instructions.
Examples of such instructions may include, but are not limited to, requests to execute on a particular venue or to execute an order over a particular timeframe or at a pre-determined price.

f.    Where your instruction relates to only part of the order, we will continue to apply our Best Execution principles to the remaining portion.

g.    In determining whether Best Execution applies to a transaction, we will not consider any fees or charges which are charged by LBC for executing the transaction (e.g. research costs, management fees, capital charges) (‘’LBC’s Fees and Charges’’).

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5.     Execution Venues and Approved Counterparties

a.    Discretionary Portfolios: In terms of placing orders or activities relevant to the maintenance of your investment portfolios, we will use Approved Counterparties selected by Clients, provided these counterparties are licensed and regulated by regulators. Where there are more than one Approved Counterparties under a Client’s banking relationship, LBC reserves the right to determine which of such counterparties it executes an order with. LBC will be guided by the Execution Factors in deciding its execution venue.

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b.    Advisory Portfolios: For clients who engage LBC for advisory services, the prerogative to act or not to act upon our investment advice lies with the end-clients. LBC’s best execution policy does not apply to clients who engaged LBC for investment advisory services or non-discretionary mandates (“Advisory Clients”). In certain cases where Advisory Clients request for personnel of LBC to place orders on their behalf, the Advisory Clients shall not place legitimate reliance on LBC to protect their interest in relation to the Execution Factors. Nevertheless, the financial institution acting on such order placements will perform its best execution obligation in line with its own framework.

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Monitoring of Approved Counterparties and Policy Review

c.    For Approved Counterparties selected by the clients or bank accounts of clients held in such Approved Counterparties, the onus and responsibility to monitor and review the best execution policy of these Approved Counterparties rest with the client. LBC will perform annual checks on all the Approved Counterparties’ Best Execution Policy as part of its own risk control and diligence, in its capacity as a fiduciary.

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d.    LBC has put in place appropriate arrangements for the periodic monitoring and review of our firm’s Best Execution Policy and its related processes.

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6.    Order placements performed by LBC
When LBC places an order in favour of a discretionary portfolio or on behalf of an advisory client, the Investment Committee will ensure that the trades are:
i)    executed promptly in accordance with Client’s instruction, if such orders are placed on behalf of an Advisory Client;
ii)    accurately recorded by way of documentation;
Order allocations do not apply to LBC as the firm does not distribute any products. Buy orders are placed in favour of Client accounts with the Approved Counterparties. If there are any capacity limits in relation to a product from the approved counterparty, the counterparty will typically perform the pro-rate allocations in accordance to its own policy.

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7.    Updates to Best Execution Policy
a.    We will review our Best Execution Policy on a periodic basis and reserve the right to update it as appropriate.

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b.    If you require further information on our Best Execution Policy, please contact the LBC Compliance Team via brc@lbridgecap.com .