Order Execution Policy
InvestEngine (UK) Limited is required, as specified in Chapter 11.2A of the FCA’s Conduct of Business Sourcebook (COBS), to establish an Order Execution Policy explaining how we take all sufficient steps to achieve the best possible results for our clients.
Financial Instruments
InvestEngine (UK) Limited trades solely in Exchange Traded Funds (ETFs) listed on the London Stock Exchange.
Client Classification
All clients are classified as retail clients, as defined in Chapter 3.4 of COBS.
Execution Factors
The best possible result for our clients is determined by ‘Total Consideration’, which represents the execution price and the costs related to execution. In executing an order under our execution policy, we will consider and exercise our discretion in assessing the following execution factors:
a) Price — This is the price at which a trade is executed;
b) Cost — any costs related to execution to ensure the best possible net outcome;
c) Likelihood of execution and settlement — the probability that the trade will be successfully executed and completed;
d) Size and nature of the order — size of the trade and how any particular characteristics of a trade can affect best execution;
e) Speed — how quickly the trade can be completed, and
f) Any other relevant considerations.
When executing a customer order, we will take into account and exercise our discretion in assessing the following criteria for determining the relative importance of the execution factors:
- The characteristics of the customer including the categorisation of the customer;
- The characteristics of the customer order;
- The characteristics of the financial instrument that are the subject of that order; and
- The characteristics of the execution venue to which that order can be directed to.
In exceptional circumstances, such as technical faults leading to loss of connections with an execution venue, we may have to use other execution methods than those listed below.
The instruments that we may trade in include UK and Non‑UK ETFs.
The risks of these types of Investments are covered in Key Features Documents and within the ETF’s FAQ on our Website.
We typically trade once daily. We reserve the right to trade more frequently if we regard it as necessary or desirable to do so.
Quality of Execution
We provide both a Managed (discretionary) and DIY (execution) portfolios to our clients. To provide these services we execute orders for your investment with participants in the market.
To facilitate lower minimum trading and improve diversification we trade in fractional shares, and we will take all sufficient steps to achieve Best Execution when internally allocating fractions. This means that execution will be based on a price no worse than the prevailing bid/offer on the reference exchange as of the time of our order, for all full share and fractional share components of a transaction. Any order greater than one share that includes a fractional share component will be executed in a mixed capacity. We do not act in either a principal or riskless principal capacity with respect to the fractional share components of the transaction. Where a transaction involves a fractional share you will have beneficial rights relating to the fractional element, though be aware that this fractional elements only exists within the InvestEngine framework.
Where trades are conducted through AutoInvest, they may react differently to ordinary trades as per the section below.
Execution Venues
All trading shall be conducted on with Winterflood Securities Ltd, at appropriate trading times.
The main market that your securities will be traded on is the London Stock Exchange. Winterflood Securities Ltd may also deal directly with certain execution counterparties which provide the best liquidity for the ETFs we use.
Winterflood Securities Ltd will determine the best possible result by considering the price of the relevant investment, and the total cost of buying or selling it.
Relying on a single venue
The FCA has clarified that a firm is permitted to rely on a single venue or custodian to execute client orders. However, in order to demonstrate that best execution is being provided in this situation, firms must be able to show that its reliance on this single venue or custodian provides the best possible result for its clients on a consistent basis, and that the results are at least as good as could be obtained from relying on other entities.
InvestEngine (UK) Limited conduct regular post-trade Best Execution analysis to evaluate the execution performance of trades against market prices at the time of each trade and other quantitative and qualitative criteria. This is to ensure that clients are consistently obtaining the best possible result and that these are at least as good as the results that could have been obtained from other execution venues.
If we find that clients are not consistently obtaining the best possible result, we will make the necessary changes to ensure that we achieve Best Execution for our clients.
Cut Off Times
InvestEngine will trade once per day per security for both discretionary and execution portfolios. In order to ensure that your transaction is executed on the same day, you must fund your portfolio and confirm your order prior to the cut off times below:
ETFs: All Investment Instructions to buy or sell ETFs must be made prior to 14:00 GMT and will be executed by 18:00 GMT on the same day. Any instruction made at or after 14:00 GMT will not be guaranteed for same day execution and may be executed the next business day.
Your account will only be considered funded where the funds have been received and cleared by us and any payment delays may result in your order being executed the following business day.
Cancellation
If you wish to cancel an order you should do so in App or on the Platform, or by emailing support@investengine.com before the cancellation cut off time below. Any email received after the cut off time below will not be accepted, and your order will be executed.
ETFs: All cancellation instructions relating to an ETF order must be received by 14:00 GMT.
Specific Instructions
If you provide us with specific instructions to deal for you, there is a risk we cannot achieve Best Execution in respect of that aspect covered by your specific instructions and we may not accept a specific instruction.
Settlement
Once execution has taken place, the trade must then settle. Settlement is the process which finalises the trade, by completing delivery of cash to buy a security, or delivery of the security in return for cash in a sell transaction.
We will seek to carry out settlement on a T+2 basis. This means that we aim to settle trades within 2 days of execution. Whilst trades are in the settlement process, you will be unable to create any other order, transaction or withdrawal regarding the assets or funds relating to the trade.
Whilst the risk of settlement failure is very low, there is a moderate risk that settlement of transactions are delayed as a result of external factors, such as market liquidity, broker trading bandwidth or other unforeseen operational issues. We will seek where possible to settle T+2, but this may not always be possible, and settlement may take longer.
Trade Aggregation and Allocation
So that we may trade efficiently, we may aggregate our customer orders before going to the market. This reduces a number of risk including settlement and counterparty, as well as providing economies of scale to improve the possibility of getting the best price available.
We seek only to execute transactions when we can confirm that the client and market orders are equal. This means trades will only be executed on the basis that they can be filled 100% in volume. The trades will then be allocated to the clients in the proportion that was calculated before the trade was executed – ensuring that you receive the correct amount.
As we conduct Fractional Trading, all trades will be effectively aggregated and allocated, as it will often involve the purchase or sale of a whole share and allocation of a fraction of that share. Multiple fractions may be allocated to different clients from the same purchased share, or aggregated with other sale orders to make up the whole share to be sold through our broker.
We do not trade with our own funds – so your orders will be allocated only with other customers that are using the same service. This means we aggregate DIY orders with DIY orders, and Managed orders with Managed orders.
AutoInvest
AutoInvest is a function that allows any available cash in your DIY portfolio over £1 to be automatically invested in the next applicable trading window.
By turning on AutoInvest, you are giving us an ongoing instruction to deal on any and all funds over £1 that you have deposited into your DIY portfolio. The cash available will be invested proportionate to your DIY portfolio target weight as at 12:00 GMT, which is the cut off time on the day that the funds are in the account. Any changes to your DIY portfolio target weight must be made before the cut off time, otherwise the money will be invested in the target weights on the portfolio at the time and you will need to rebalance the portfolio, incurring any ETF costs which apply.
For example, if you deposit £100 and your DIY portfolio has 5 ETF’s at a split of 35%, 25%, 20%, 15% and 5%, this will create 5 orders of £35, £25, £20, £15 and £5 in the respective ETFs that you have chosen.
Once AutoInvest is turned on, we will take sufficient steps to achieve Best Execution on any orders executed. For the purpose of this policy, we will treat the instruction as given at one minute before the relevant cut-off for the next applicable trading window.
You can set a cash buffer amount once you enable AutoInvest. This means that only the amount over the cash buffer amount will be invested via AutoInvest. For example, if you set a cash buffer of £25 and have £100 in your account, only £75 will be invested and the remaining £25 cash will stay in your account.
To avoid funds being unintentionally invested, you must turn the AutoInvest function off by 12:00 GMT, otherwise the cash will be automatically invested. Should you mistakenly leave AutoInvest enabled, InvestEngine will not be liable for additional ETF fees which may be incurred in selling down your investments.
Savings Plans: Please note that when setting up a variable recurring payment or Direct Debit, AutoInvest will be enabled by default. If you do not wish to use the AutoInvest feature, it can be disabled via the Platform dashboard after setting up your Savings Plan.
Review and Monitoring
We will review the effectiveness of our order execution arrangements (including the venues that we use) and the execution policy at least annually (and also on an ad hoc basis in response to any material change affecting a relevant execution venue). We will monitor our compliance with the policy, making enhancements to it or to our order execution arrangements where necessary and advising you of such changes and/or our on‑going compliance with the policy, as appropriate.
Regulatory permissions
We will maintain such FCA regulatory permissions as we may require from time to time.
