BEST EXECUTION AND ORDER HANDLING

Introduction

The Canadian Securities Administrators have introduced securities laws that allow for alternative marketplaces to compete with the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSX-V). Securities that are listed on the TSX and TSX V may now also trade on an alternative marketplace. Gravitas Securities Inc. (GSI) wishes to advise you of some of the conditions that could affect the execution of your orders now that there are multiple marketplaces in Canada.

 

What is Best Execution?

 

Best execution is defined as “obtaining the most advantageous execution terms reasonably available under the circumstances”.

 

When determining how a client order can achieve the best possible execution in accordance with client instructions, GSI considers the following order criteria: Price, Speed of execution, Certainty of execution, Overall cost of execution, Liquidity of the security, Size of the spread, Market direction, Prevailing market conditions, market depth of the security and of course Client instructions.

 

How does GSI achieve Best Execution?

 

GSI does not trade directly on any marketplace. GSI trades through our carrying broker, National Bank Independent Network (“NBIN”).  GSI is a non-trading member organization of the TSX Venture for Investment Banking purposes only.

 

Under Canadian securities regulations, GSI is required to ensure that our clients get the best price and best execution for our client orders. We rely on NBIN to ensure that GSI meets our regulatory obligations to our clients. NBIN uses a variety of automated systems, as well as a sophisticated understanding and expertise of the Canadian marketplaces to meet GSI’s best execution requirements.

 

Hours of Operation

 

GSI staff are available for order execution from 9:30 am until 4 PM Eastern Standard Time (‘EST’) excluding all statutory holidays.  Orders received outside of these hours will be executed on a best-efforts basis but GSI cannot guarantee execution outside of our posted hours.

 

Order Handling

 

All client orders are valid for the day in which they are entered unless otherwise specified by the client.

 

Good-Till Cancelled Orders

 

A Good-Till Cancelled Order (“GTC”) is an order that remains open until the client cancels the order or until its specified date of expiry. NBIN will only allow orders with a maximum 30 calendar days. The order will remain booked until executed or expiry, whichever comes first. It is the client’s responsibility to ensure they know what the date of expiry will be and to contact their Investment Advisor on the expiry date should they wish the order to be re-instated.

 

Good-Till Date Orders

 

A Good-Till Date Order (“GTD”) is an order with a specified duration that will remain open until it is filled or until a specified date of expiry.

 

Market Orders

 

A Market Order is an order to execute a trade immediately at the best price available at the time the order is received. Market Orders will be filled in whichever marketplace has the best bid or offer at the time the order is received. GSI cautions clients from entering market orders given the different treatment that market orders receive in each marketplace. NBIN routes orders through the automated system and enters the order in the market that secures the best price.

 

Limit Orders

 

A Limit Order is an order with a set maximum or minimum purchase or sale price. If the limit order is not immediately fillable, NBIN will book the order on the market with the highest likelihood of being executed. In multiple markets, it is possible that once a limit order is booked on a particular marketplace, the security may trade on another marketplace without the client’s booked order participating.

 

Special Terms Orders

 

Special Terms Orders (“STO”) have special terms that cannot be traded on the regular markets. These orders will only trade if the special terms are satisfied prior to execution of the order.

 

Market on Close Orders

 

A Market on Close (“MOC”) Order is a special order that only trades on the close of the market at the calculated closing price. Not all markets support MOC orders.

 

Order routing technology

 

NBIN uses a Fidessa third party “smart order routing” (SOR) technologies to ensure best available price and most favorable execution are obtained for client orders. The NBIN SOR typically employs the spray or slice strategy which are designed to prioritize execution time and price discovery, respectively. The SOR strategies are managed by NBIN and are subject to best execution policies and procedures.

 

Principal marketplace 

 

The principal marketplace for Canadian listed securities will always be the issuers respective primary listing exchange unless notified otherwise.

 

Marketplace Disclosure

 

If your trade was executed on a single exchange, that exchange will be noted on your trade confirmation with either an abbreviation (with details on the back of the confirmation) or noted in the trailer field.

An order executed on one ore more marketplaces will be disclosed on your trade confirmation legend as ‘Traded on Multiple Markets’.  You may request full details of the order execution from your Investment Advisor or Portfolio Manager.

 

Conflict of Interest Disclosure – Alpha-Trading Systems

 

NBIN is a limited partner of Alpha Trading Systems Inc. which is an alternative trading system operating in Canada. NBIN is a subscriber to Alpha and NBIN’s automated trading systems probe Alpha’s liquidity on all its orders as well as the other Canadian marketplaces.

If you have any questions regarding these disclosures, please contact our Compliance department.