Under the Directive 2004/39/EC of the European Parliament on Markets in Financial Instruments (MiFID), Equita SIM
must take all reasonable steps to obtain the best possible result for its clients when executing orders on their behalf.
The objective of this document is to provide adequate information about:
a) Order execution and transmission arrangements
b) The factors that Equita considers decisive for order execution or for transmission to third-party brokers
c) The order of importance attributed to such factors
d) Monitoring and review of its order execution and transmission policy
e) Order aggregation
2. User target
This document has been expressly prepared solely for the category of professional clients, as defined by MiFID. Equita
SIM has prepared a different document addressed to retail clients.
3. Execution Policy
3.1 Execution quality
In executing orders on a client’s behalf, Equita SIM makes all effort necessary to achieve best execution. This means
that procedures have been put in place designed to obtain the best result for such orders, considering all the factors that
go to define execution quality, as highlighted in the next sub-sections.
Although Equita SIM’s commitment is to execute orders respecting client’s interests, with the aim of achieving the
conditions most favourable for the client, there is no guarantee that this will always happen for each order executed. In
other words, Equita SIM – although fulfilling its legal dutires – does not provide any specific guarantee of the result
3.2 Factors considered and their relative importance
In order to determine the way in which orders are executed, Equita SIM will consider the following factors, indicated in
descending order of importance:
2. costs relating to order execution
3. size of order
4. likelihood of execution
5. speed of execution
On a secondary basis with respect to the factors indicated above, Equita SIM also considers order type (or nature) and
any other pertinent factors relevant for efficient execution of the order.
With specific reference to provision of the dealing on own account service for orders concerning Over the Counter
(OTC) derivative instruments, Equita SIM, in order to ensure the best possible protection of its clients’ interests, will
consider the following factors, once again indicated in descending order of importance:
1. speed and likelihood of execution and settlement
2. costs (basis points to pay on cash + funding costs)
4. nature and size of order
5. qualitative evaluations.
Today, Equita does not act as a systematic internalizer.
3.3 Execution venues
Orders are executed at the execution venue identified by Equita SIM based on the factors indicated above and their
In consideration of the factors listed above, Equita SIM believes that – at present – for orders concerning financial
instruments listed on italian regulated markets, the best order execution venue is the regulated market itself. Given this,
the markets organized and managed by Borsa Italiana SpA have been identified as the main execution venue. Equita
SIM has the right to use other execution venues, different from markets organized and managed by Borsa Italiana
S.p.A. (ex. other regulated markets, multilateral trading facilities – i.e. MTF - or systematic internalizers) if, in view of
the circumstances, it considers them better able to assure best execution and therefore to safeguard clients’ interests.
In the light of the previous considerations, Equita SIM execute orders mainly on one or more of the following types of
- MTA (Italian equities)
- IDEM (listed Italian derivatives)
- MOT (Italian bonds)
- SeDeX (Italian securitized derivatives)
For the full, up-to-date list of execution venues, readers should refer to the list in Appendix 1.
For financial instruments listed on foreign regulated markets, Equita SIM, as a rule, does not execute the order directly
but transmits the orders to a third-party broker whose execution policy is compatible with that of Equita SIM (except
orders on financial instruments listed on Eurex, where Equita also has a direct membership). Brokers are selected
considering those who give access to more execution venues. It is possible that these brokers, using also smart order
routing (S.O.R.) systems, execute the order out of the regulated markets (ex. on MTF or systematic internalizers). For
more information about the procedure adopted for transmitting the orders to other brokers for execution please refer to
the “Transmission policy” section (paragraph 4).
Conversely, Equita SIM executes as a direct counterparty orders concerning OTC derivative instruments, as the
illiquidity characteristics generally typical of these financial instruments mean that speed, likelihood of execution and
settlement (i.e. the top factors for best execution) can be better achieved by executing the order in that way. In this case,
the execution venue for clients’ orders is Equita SIM itself.
3.4 Execution outside regulated markets
It is possible that – in special situations – the best result for the client can be achieved by executing the order either
totally or partia lly outside regulated markets (for example, by matching the order with another client’s order of the
opposite sign, or executing the order with Equita SIM’s proprietary desk as a counterparty).
By way of non-exhaustive example, Equita SIM can execute outside the market orders concerning financial markets
listed on regulated markets if at least one of the following conditions occurs:
- It is possible to obtain a lower price or, at the same price, incur lower costs
- There is insufficient liquidity to execute the order in a timely manner
- Execution of the order would cause an excessive impact on the market price.
It remains understood that the order can be executed outside the market only when the client has given its consent to
this execution approach, either in general, or in relation to a specific order.
3.5 Specific instructions
If the client gives specific instructions for execution of orders, these instructions will prevail over Equita SIM’s normal
3.6 Exceptions to best execution
As well as in the case of specific instructions from the client (sub-section 3.5), Equita SIM will also not be under
obligation to provide best execution for the following operations:
- Request for quote: i.e. when the client contacts several brokers asking each of them for a price and then accepts the
price indicated by Equita SIM after having assessed the various offers.
- Customised transactions with special reference to dealing in OTC derivatives for which the market does not offer
- Transactions for which the client specifies execution venue
- Interconnection: transactions directly transmitted to the market by the client by means of a remote terminal
provided by Equita SIM.
4. Transmission policy
4.1 Execution of orders at best possible conditions – General criteria.
When performing its order receipt and transmission service, Equita SIM does not execute the order directly but
transmits the orders to a third-party broker (both by telephone and via other means, such as, for example,
As a rule, the brokers will execute the orders as described in their respective execution policies and in the Equita SIM
transmission policy .
4.2 Broker selection approach
Selection of brokers is performed considering those who give access to mo re execution venues and whose execution
policy is compatible with that of Equita SIM. Therefore it is verified that the broker has at the first place, in order of
importance, price and cost factors. The selection process ends with the creation of a broker list (i.e. list of brokers that
Equita SIM is allowed to use).
In case that more than one broker in the broker list are able to execute the client order, the selection of the specific
broker takes place considering the following factors (in descending order of importance):
1. commissions and costs
2. order size
3. reliability as regards financial soundness, operations and settlement
4. technological capability
5. ability of broker to access several markets and instruments.
The type of client, order type, possible impact on the market, execution approach, the client’s instructions and other
variables may contribute to changing the relative importance of the factors mentioned above.
In general terms, the choice of the broker with which to operate – among those included in the broker list – is made
considering the client’s interest.
5. Review and monitoring
Equita SIM constantly monitors the effectiveness of the measures taken to obtain the best possible result for the client
and, in particular, monitors the quality of order execution.
Equita SIM reviews its order transmission and execution policy annually (and also, in any case, whenever
circumstances occur such as to affect its ability to continue obtaining the best possible result for the client).
Relevant amendments will be notified to clients in the manner agreed.
Equita SIM will publish the updated list of execution venues on its site www.equitasim.it (Mifid section). An updated
version of this document will be always available on the same site.
6. Bundling of general orders for order management
Equita SIM may execute clients’ orders or a proprietary transaction bundling them with the order of another client.
Equita SIM pays the utmost attention to safeguarding its clients’ interests but bundling might nevertheless be
detrimental to the client as regards a specific order.
LIST OF EXECUTION VENUES
Equita SIM is a member of all regulated markets1 and multilateral trading facilities (MTF)2 organized and
managed by Borsa Italiana, of the multilateral trading facility EuroTLX, managed by EuroTLX SIM S.p.A.,
and of Eurex, managed by Deutsche Börse AG. Therefore Equita SIM directly executes orders on all
financial instruments traded therein.
Moreover Equita SIM has an indirect access (in reception and transmission of orders) to main European and
Extra-European markets. As a consequence orders on financial instruments traded on foreign markets are
transmitted to brokers of international level. Here below is a list of the main foreign markets to which Equita
SIM as an access:
||Vienna Stock Exchange
||NYSE Euronext Brussels Stock Exchange
||OMX Copenhagen Exchange
||OMX Helsinki Exchange
||NYSE Euronext Paris Stock Exchange
||· Frankfurt Stock Exchange (including Xetra trading platform)
· EUREX derivatives, options and futures
||Dublin Irish Stock Exchange
||NYSE Euronext Amsterdam Stock Exchange
||Oslo Stock Exchange
||NYSE Euronext Lisbon Stock Exchange
· SWX Swiss Exchange
||OMX Stockholm Exchange
||London Stock Exchange
||Athens Stock Exchange
||Madrid Stock Exchange
||· American Stock Exchange
· New York Stock Exchange
Equita SIM may extend or limit the list of foreign markets for which the service is provided, also due to the
access type (es. remote access).
1 MTA, TAH, IDEMequity, MOT, SeDeX, MIV, ETFplus
2 MAC, ExtraMOT, AIM Italia