SBI Digital Markets Pte. Ltd.
(“SBIDM”)

Best Execution is a legal mandate that requires brokers to seek the most favorable avenues to execute their clients’ orders within the prevailing market environment. SBIDM is required to establish and implement Best Execution policies and procedures that covers the capital market products it provides when executing client trades. These requirements apply to all clients. SBIDM will take steps to confirm Best Execution and will periodically monitor transactions to confirm Best Execution requirements are being met.

1. Scope

Notice SFA 04-N16 on the Execution of Customer Orders and associated Guidelines of the Monetary Authority of Singapore (“MAS”) require SBIDM to establish and implement written policies and procedures commensurate with the nature and complexity of its business and take all sufficient steps to obtain the best possible order execution result for SBIDM’s clients (hereinafter, referred to as “Best Execution”).

This Best Execution Policy (“Policy”) applies to all SBIDM staff responsible for taking, transmitting, and fulfilling client orders.

2. Guiding Principles

SBIDM always aims to execute its clients’ orders at the best possible terms and to the ultimate benefit of the client. The Policy sets out the key steps SBIDM deems sufficient to comply with the MAS’ Best Execution requirements.

Failing to comply with this Policy may result in disciplinary action, which may include termination of employment.

3. Application of Best Execution

Best Execution requires SBIDM to take all sufficient steps to achieve the best possible result for clients’ orders. Best Execution requirements,

  • Cover all capital markets products (in which SBIDM is licensed to deal), regardless of whether SBIDM acts as agent or principal; and
  • Apply when executing client orders directly on a market or placing client’s orders with a broker, third-party participant, or other capital markets intermediary.

Best Execution applies when dealing with any client, i.e., institutional, accredited, or expert investors.

Best Execution applies in various execution venues, including exchanges or other alternative venues such as dark pools, liquidity providers, and market makers.

4. Roles and Responsibilities

For the purposes of SBIDM’s Best Execution practices, the following roles and responsibilities apply:

  • Authorised Traders – Specifically designated members of the Commercial team who are responsible for executing buy and sell orders on behalf of SBIDM’s clients, monitoring market conditions, analysing pricing data, providing market insights, and providing product recommendations.
  • Operations – Responsible for handling logistical aspects of trade execution, ensuring timely settlement of trades, confirming trade details, ensuring efficient and accurate trade processing, and maintaining records.
  • Technology – Responsible for developing and maintaining the systems and infrastructure necessary for trade execution; handling market data feeds, and (working with operations) optimise execution processes.
  • Compliance – Responsible for ensuring that transactions comply with relevant regulations and SBIDM policies, monitoring trading activities, implementing compliance risk management controls, and working to prevent market abuse or manipulation.

5. Execution Factors

SBIDM takes certain factors into consideration when executing a transaction:

  • Price;
  • Cost;
  • Speed;
  • Likelihood of execution and settlement;
  • Size;
  • Nature; and
  • Any other consideration relevant to the execution of an order.

Collectively, these are known as “Execution Factors” and they provide the basis for SBIDM to explain how Best Execution is provided.

When working with clients and receiving their trading instructions, Authorised Traders take the broader market conditions into consideration and may apply differing levels of importance to some Execution Factors over others. Execution Factors are relevant whether SBIDM is executing clients’ orders directly on an execution venue or placing clients’ orders with/through a capital markets intermediary.

Authorised Traders will use reasonable judgment when considering the Execution Factors and deciding how to provide Best Execution.

6. Best Execution Criteria

Authorised Traders will apply Execution Factors in a manner that considers the following circumstances in the execution of client orders:

  • Characteristics and classification of the client;
  • Characteristics of the capital markets product;
  • Characteristics of the client order;
  • Characteristics of the available execution counterparties, i.e., brokers or third-party participants; and
  • Relevant prevailing market conditions.

7. Brokers and Third-Party Participants

Authorise Traders will determine appropriate brokers or third-party participants to which client orders can be transmitted for execution. When transmitting such client orders, Authorised Traders will use brokers or third-party participants which, themselves, possess adequate arrangements to satisfy Best Execution requirements. The Commercial team vets and selects brokers and third-party participants based on an internal due diligence selection process undertaken during onboarding, with subsequent annual periodic reviews.

SBIDM is obliged to have consistent outcomes among like orders subject to Best Execution requirements, irrespective of whether the clients’ orders are on-exchange or off-exchange.

8. Client Orders – General

Individual client orders subject to the Policy will be executed or transmitted by Authorised Traders sequentially in accordance with their time of receipt and promptly after receipt.

For client orders received outside the normal business hours, Authorised Traders will promptly handle as soon as SBIDM opens and trading hours resume.

9. Client Orders – Specific Instructions

Where a client has given a specific instruction as to the management and/or execution of an order, e.g., where a client instructs an Authorised Trader to execute their order at a particular time or at a particular price, and the client order is subject to the Policy, the order will be completed in accordance with those instructions, subject to adherence to SBIDM policies and procedures. Authorised Traders, and SBIDM, is deemed to have satisfied Best Execution obligations when client orders are placed in accordance with the client’s instructions.

Where the client’s specific instructions relate to only part of their order, Authorised Traders will continue to apply this Best Execution requirements to all aspects of the order, even for those if not covered by the specific instructions.

By providing specific instructions, a client may prevent an Authorised Trader from taking steps SBIDM has designed and implemented through the Policy or related procedures to obtain the best possible result for the execution of those orders in respect of the elements covered by those instructions. If a specific client instruction brings about a conflict of interest, the Authorised Trader will inform the client of such conflict. Where the Authorised Trader is unable to manage a conflict, he/she may decline to execute the client order.

10. Monitoring

Compliance and Operations has put into place appropriate monitoring, review, and governance processes that are designed to,

  • Provide ongoing compliance oversight and monitoring of the Policy and any related procedures;
  • Test the effectiveness of SBIDM’s execution arrangements and how consistently it performs in obtaining Best Execution, including periodic reviews of its brokers and third-party participants; and
  • Regularly report Policy compliance and control effectiveness to relevant SBIDM governance committees and, where applicable, Executive Management.

Client order executions that are inconsistent with the Execution Factors, Best Execution Criteria, or that are otherwise exceptional must be reviewed, with any exception requiring the Chief Commercial Officer’s approval.

Operations shall monitor SBIDM’s overall order routing system and processes to ensure that SBIDM’s infrastructure works as intended and does not result in unnecessary delays in the transmission of any client orders.

11. Client Disclosure on Order Execution

Sufficient information about SBIDM’s Best Execution policies and procedures must be provided to clients in advance of place or executing any orders. Where a client makes reasonable and proportionate requests for information about our policies and how they are reviewed, SBIDM shall, where appropriate, make reasonable endeavours to answer clearly and within a reasonable time.

12. Compliance and Reporting

Compliance and Operations will regularly assess and monitor SBIDM’s execution practices, address any potential conflicts of interest, and ensure compliance with regulations. Operations will maintain records of executed orders and relevant data for regulatory reporting and auditing purposes.

13. Annual Declaration and Certification

The Policy must be approved by SBIDM’s Risk & Compliance Committee, with information regarding Policy provided to the Board of Directors. Compliance will review the Policy at least annually or whenever a material change occurs. Clients will be notified, in accordance with SBIDM’s Client Terms & Conditions, of any material change that affects SBIDM’s ability Best Execution. A material change shall be a significant event that could impact any Execution Factor. If a material change occurs, the Commercial team will also re-evaluate the execution counterparties or entities on which SBIDM places significant reliance in obtaining Best Execution.