Mountains

RTS28 and Article 65(6) Reports

Annual report by Margetts Fund Management Ltd disclosing the identity of investment firms and the quality of execution under Article 65 (6) Reporting requirements.

The following report has been prepared to allow the reader to assess the quality of our execution practices and identify the top investment firms in terms of trading volumes for client orders placed for execution for the year ending 31st December 2019.

(b) Debt Instruments – (I) Bonds

Class of Instrument Debt Instruments – Bonds
Notification if <1 average trade per business day in the previous year Y
Top five execution venues ranked in terms of trading volumes (Descending order) Proportion of volume traded as a percentage of total in that class Proportion of orders executed as percentage of total in that class
Thomas Grant & Company Ltd
(LEI 213800AB46IBMI36YY02)
100.00% 100.00%

 

(k) Exchange traded products – (Exchange traded funds, exchange traded notes and exchange traded commodities)

Exchange traded products
Notification if <1 average trade per business day in the previous year Y
Top five execution venues ranked in terms of trading volumes (Descending order) Proportion of volume traded as a percentage of total in that class Proportion of orders executed as percentage of total in that class
Thomas Grant & Company Ltd
(LEI 213800AB46IBMI36YY02)
100.00% 100.00%

 

Margetts Fund Management Ltd only places orders on behalf of professional clients and does not place orders or deal with retail clients. The above tables have been prepared in accordance with the table 2 requirements under RTS 28 with the exclusion of passive and aggressive data as these do not apply and directed orders as there have been none placed during the period. When considering placing orders, the execution factors of price, cost, speed, likelihood of completion of order, counterparty risk and quality are part of the decision. The price and cost, both implicit and explicit, are usually the most important factor in executing the order. If an instrument is less liquid, fuller consideration will be given to the likelihood of completion. Every client and order is treated the same and orders are placed according to when they are received. As the instrument is limited to exchange traded funds on behalf of professional clients, the factor that has been used has been the total consideration, namely the price of the instruments and cost of execution, both implicit and explicit.

Due to the low number of trades that are placed, the review of the executing broker is limited to their rate of commission, creditworthiness, performance and completion of orders. The broker is required to confirm whether the touch price was achieved on each trade and, where it was not, provide an explanation of why which forms the basis of our implicit cost analysis. The touch price is the price displayed on the Bloomberg screen at the time the order is placed and represents the lowest buying price and highest selling price quoted.  This has been used as no consolidated tape providers exist.

During 2019 there were a total of eight ETF trades, seven were filled at or within touch and one was filled slightly outside of touch. The buy order filled above touch was significantly outside of normal market size and the modest premium paid for liquidity was considered preferable to the increased risk of unfavourable drift and so the trade was executed at the higher price.

Two trades were placed to purchase UK Gilts and both were executed within touch and RSP quotes. The rate of commission negotiated with Thomas Grant is competitive compared to our observations in the market and will be reviewed on an ongoing basis.

We have considered other brokers and trading options and, given the current trading volumes and limited class of instruments, concluded that the use of only one broker is proportionate, cost effective, and in the interest of investors.  The volume and nature of our trades, as well as the range of instruments, is considered on an ongoing basis to ensure that best execution is achieved on a consistent basis.

Margetts Fund Management Ltd does not trade with any affiliates and does not receive any monetary or non-monetary benefits or rebates in respect of the above.

Further information of the above can be found in our best execution policy, a copy of which is available on request or can be found on our website.

To see the report for 2018 please click here