Under MiFID II there are a number of Regulatory Technical Standards (RTS) which LGPS Central Limited are required to implement. RTS 28 outlines the requirements designed to increase transparency related to executing client orders on trading venues.
To adhere to RTS 28, investment firms that execute client orders are required to summarise and publish the top five execution venues in terms of trading volumes where they executed client orders in the preceding year, as well as information on the quality of execution obtained.
LGPS Central Limited’s RTS 28 analysis for the period 1 January to 31 December 2019 is available here.
Directive 2014/65/EU
Under MiFID II we are required on an annual basis to provide information in respect of LGPS Central Limited’s Best Execution Policy. This is known as an RTS 28/Art. 65(6) Report (RTS 28 Report).
Set out below are the responses of LGPS Central Limited (“LGPS Central Limited” or the “Firm”) that are required to be provided under Article 3(3) of RTS 28. This provides a summary of the analysis and conclusions based upon LGPS Central Limited’s monitoring of the quality of execution obtained on the execution venues executed in 2019 on behalf of clients.
Within the RTS 28 Report, under MiFID II, we also are required to publish the top five execution venues where we execute client orders in the preceding year detailing the trading volumes and the quality of these execution venues. All clients of LGPS Central Limited are provided with a copy of the Firm’s Best Execution Policy at the start of the business relationship.
Requirement under Article3 (3)
a) an explanation of the relative importance the firm gave to the execution factors of price, cost, speed, likelihood of execution or any other consideration including qualitative factors when assessing the quality of execution;
Our Best Execution Policy describes the principles and approach that we follow when we execute orders in financial instruments and should be referred to when reviewing this RTS 28 Report. The principles ensure that we take all sufficient steps to obtain the best possible result to provide our clients with best execution. In summary, LGPS Central Limited will typically place a strong emphasis on price, size and speed of execution. Speed and likelihood of execution both potentially will have an impact on the price achievable. LGPS Central Limited aims to deliver best execution by minimising the market impact of transactions and obtaining the highest quality execution possible.
b) a description of any close links, conflicts of interests, and common ownerships with respect to any execution venues used to execute orders;
LGPS Central Limited does not have any close links, conflicts of interests or common ownerships with respect to any execution venues used to execute orders.
c) description of any specific arrangements with any execution venues regarding payments made or received, discounts, rebates or non‐ monetary benefits received;
LGPS Central Limited does not have any arrangements with any execution venues regarding payments made or received, discounts, rebates or non‐monetary benefits received.
d) an explanation of the factors that led to a change in the list of execution venues listed in the firm’s execution policy, if such a change occurred;
No such changes have occurred during 2019.
e) an explanation of how order execution differs according to client categorisation, where the firm treats categories of clients differently and where it may affect the order execution arrangements;
All of our clients are professional clients. The order execution arrangement does not differ with client categorisation.
f) an explanation of whether other criteria were given precedence over immediate price and cost when executing retail client orders and how these other criteria were instrumental in delivering the best possible result in terms of the total consideration to the client;
All of our clients are professional clients. The order execution arrangement does not differ with client categorisation.
g) an explanation of how the investment firm has used any data or tools relating to the quality of execution, including any data published under Delegated Regulation (EU) 2017/575 [RTS 27];
A third party vendor for benchmarking of our execution performance is used.
h) where applicable, an explanation of how the investment firm has used output of a consolidated tape provider.
We understand that currently there are no consolidated tape providers in Europe and therefore this appears to be not applicable.
LGPS Central Limited is authorised and regulated by the Financial Conduct Authority. Registered in England. Registered No: 10425159. Registered Office: First Floor, i9, Wolverhampton Interchange, Wolverhampton, WV1 1LD.
