Order Execution Policy

for Professional Clients in the Managed Portfolio Service

In accordance with regulatory requirements set by the Financial Conduct Authority (‘FCA’), Square Mile is required to put in place an order execution policy and to take all reasonable steps to obtain the best possible result (or "best execution") when executing client orders on behalf of Professional Clients. We are also required to provide a summary to Professional Clients of our order execution policy and obtain their consent to such a policy.

Our Best Execution Policy is applicable to Square Mile clients who have been classified as Professional Clients and relates to all instructions to acquire or redeem Open Ended Collective Funds in the Managed Portfolio Service. The Managed Portfolio Service invests units or shares in regulated Open Ended Collective Funds, or where required cash, for the purpose of the payment of fees, within the Platforms’ client cash account.

Execution Venue
An execution venue is the term used to describe a place where an order to trade is executed. Where the security concerned is a Unit Trust or Open Ended Collective Fund acquisition and redemptions of the investment will take place usually with the unit trust manager or Open Ended Investment Company. Consequently, and given the nature of Open Ended Collective Funds there is no benefit or opportunity, given how such instruments are priced (at the underlying net asset value of the holdings held in a fund), and Model Portfolios are administered, to use an alternative Platform.

For the Managed Portfolio Service we will therefore place all trade instructions with the Platform(s) on which the Model Portfolio(s) are administered, in accordance with the agreement that we have with each Platform.

We do not place any trade instructions directly with the unit trust manager or open ended investment company and the Platform(s) is responsible for the onward transmission of any instructions received from us to the Unit Trust manager, Open Ended Investment Company, authorised fund manager or Authorised Corporate Director.

Obligations of Square Mile Investment Services Limited In placing trades Square Mile are obliged to consider a range of factors. These are:

Price: The price of a share or unit in an Open Ended Collective Fund is calculated and published daily by the fund manager. The basis of the price calculation is the net value of the assets held in the fund and the sale and purchase of shares or units are carried out at this price. Obtaining ‘best price’ is not the most important consideration for Square Mile in issuing trade instructions.

Cost: In executing trades a specific cost may be incurred for the provision of the execution service. In placing trades Square Mile do not impose a specific charge. Our experience is that the managers of Open Ended Collective Funds do not impose a transaction charge and seek to absorb this within their overall operating costs. The Platform appointed by the investor to hold and administer their assets may impose a transaction charge that will have been disclosed to the investor when opening their account.

Consequently the cost of placing trades is outside the control of Square Mile and is not a consideration in placing trades. Speed of Execution: Square Mile are mindful of the speed of execution recognising that the trades that we input onto the Platforms are executed by the Platform, with the underlying fund managers, on a daily basis and at the price determined by the net asset value of the fund’s holdings.

Our obligation in regard to the speed of execution is to ensure that any instructions to trade issued by us to the Platform(s) are:

- Issued in a timely manner.
- Compliant with the agreement that we have with the Platform.
- Resulting trades issued by us are accurately reflected within the Model Portfolios.

Where Square Mile is unable to trade all portfolios within the Managed Portfolio Service, for transactions that are similar (e.g. the same funds are being traded) across all portfolios within the same valuation points (normally 12.00pm to 11.59am the following day) it will adopt the following procedure, where possible:

(i) All portfolios managed on behalf of an Adviser firm will be traded within the same valuation point;
(ii) Where the portfolios of all Adviser firms cannot be traded within the same valuation point any outstanding trades will be traded as soon as possible, usually the next valuation point, following the initial trade;
(iii) Where Square Mile suspect that it will not be possible to place all trades within the same valuation point it will trade the portfolios in the alphabetical order by reference to the name of the adviser firm. Subsequent trades, where possible will be placed sequentially in alphabetical order, subject to any Platform constraints.

In adopting this procedure Square Mile recognises a number of Platform constraints that may limit our ability to place trades. Some Platforms are unable to accept trades ‘on demand’ and may impose timing restrictions on when trades may be placed. Square Mile will seek to operate within these ‘dealing windows’.

Likelihood of Execution and Settlement: Execution is a prime consideration for Square Mile but settlement is not, as this is the responsibility of the Platform that holds and controls the investors’ assets and that executes the trades with each underlying fund manager.

In placing orders with Platforms for them to execute with the underlying fund managers we have to be confident in the ability of the Platform to place those trades effectively.

We have confidence, based on experience and market awareness, that the Platforms to which we instruct trades are able to execute these effectively. We do monitor, post instruction, that all trades are reflected accurately within the Model Portfolios. Should any discrepancies be identified these are referred by Square Mile to the relevant Platform.

Square Mile will only provide instructions to trade to a Platform at a Model Portfolio level and will not issue any trade instruction on behalf of specific investor accounts.

Size of Deal: Square Mile will only consider the size of a deal as it relates to the possible application of a dilution levy/swinging price by the underlying fund manager. On occasion we may engage directly with the fund manager to understand the pricing position of a fund and, if thought appropriate, seek to instruct trades over a period of time. We recognise in doing so that the fund manager will consider their aggregate dealing position and in taking such action we further recognise that such charges may not be avoided.

Nature of Orders: In managing the Model Portfolios Square Mile will issue four types of trade instruction:

(i) An instruction to buy units/shares in an Open Ended Collective Fund;
(ii) An instruction to sell units/shares in an Open Ended Collective Fund;
(iii) An allocation of the Model Portfolio to the Platform cash account;
(iv) A rebalance of a Model Portfolio. We will rebalance a Model Portfolio to (a) bring the holdings back to the model position where market movement may have caused a Model Portfolio to drift away from the recommended asset allocation and (b) where we have instigated trade(s) within a portfolio to ensure existing clients are aligned to the up-to-date Model Portfolio position.

In regard to (i), (ii) and (iii) we will submit these instructions to a Platform based on the percentage holding of a portfolio. We are unable to submit trades on the basis of (a) the number of units/shares of a particular fund or (b) a monetary amount.

We will not issue (or accept) any Limit Orders. In relation to Open Ended Collective Funds, Square Mile will issue instructions for trades to be executed at the next valuation point determined by the Order Execution Policy of the Platform(s) at the price then determined by the Asset Management Group.

Obligations of the Platform It is the responsibility of the Platform(s) when we give an instruction, to place the trade(s) in the market. In doing so the Platform(s) are obliged to consider the factors outlined above, to which Square Mile are subject.

For a Platform normally ‘price’ is the most important factor in executing trades but given the nature of Open Ended Collective Funds (daily pricing; valued at the net asset value; fixed valuation points) the prime consideration is one of execution and settlement.

We would not normally expect to experience any significant execution issues given that the Managed Portfolio Service utilises Open Ended Collective Funds to obtain market exposure, in regard to cost; speed of execution, likelihood of execution; size of deal; or nature of order. We would expect all the Platforms where we instruct trades to adhere to standard market practice.

Prior to utilising any Platform we will review the Platforms’ own Best Execution and Order Allocation Policy to ensure that it treats all investors equitably.

Square Mile are only responsible for the input of any instruction made by us onto the Platform(s). We cannot be held responsible for any orders issued by the Platform(s) into the market in execution of the instruction issued by us.

Allocation of Trades
Square Mile will issue trade instructions to the Platform at a portfolio level. Instructions will be expressed as a percentage of the assets held in the portfolio and not at the underlying investor level. It is the responsibility of the Platform to allocate trades to each investor linked to a Square Mile portfolio.

Third Party Payments

In issuing instructions to Platforms Square Mile does not receive payment of any kind from any third party in respect of these trades.

Notification of Trades
Square Mile will provide notification to Adviser firms who utilise the Managed Portfolio Service of instructions placed on a Platform. The Platform will be responsible for executing the trade and notifying investors on whose account they have traded.

Review of this Policy and Order Execution Process
Annually we will review this Order Execution Policy; the processes followed; and all instructions issued in the previous 12 months. This review will consider the effectiveness of Square Mile in delivering trading instructions and, if known, the instructions being executed by the Platforms with the underlying fund managers. The updated policy will be published on the Square Mile website.

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