Apex Fund Management (Luxembourg) S.A.


1.11. Voting Rights Policy

AFM has determined that it will not exercise its voting rights for the managed funds.


1.13.3. Best Execution Policy

The transactions initiated by the Investment Managers are executed as a rule by APF which has issued guidelines with respect to “best execution” in their respective own internal regulations.

The respective APF internal regulation gives more detailed information of the broker selection, best execution and order handling and allocation processes, and are specifically designed as a guide for the Investment Managers.

Brokers used, the respective volumes granted and commissions paid are disclosed to the Board on a yearly basis.

Order execution policy

1. Introduction

The UCITS IV Directive requires management companies to act in the best interests of a UCITS they manage when:

a)  executing decisions to deal on behalf of the UCITS in the context of the management of their portfolios.

b)  placing orders to deal on behalf of the managed UCITS with other entities for execution, in the context of the management of their portfolios.

Management companies must take all reasonable steps to obtain the best possible result for the UCITS, taking into account price, costs, speed, likelihood of execution and settlement, order size and nature or any other consideration relevant to order execution. This obligation is known as the duty of “best execution”.

The purpose of this document is to detail the Management Company`s arrangements in relation to order execution, which will be applied to all managed UCITS funds.

2. Scope

The Management Company does not execute orders itself, neither does it transmit orders for execution; all such activity is delegated to appointed Investment Manager, who will determine how orders will be placed or executed.

The Management Company does not execute orders itself, neither does it transmit orders for execution; all such activity is delegated to appointed Investment Manager, who will determine how orders will be placed or executed.

This policy outlines the duties placed on the appointed Investment Manager to ensure the Management Company `s compliance with the regulatory requirements (which incorporate the UCITS requirements) with respect to “Best execution” and “Handling of Orders”.

3. Best execution factors and best execution criterias

The best execution factors to be taken into account when executing orders for a fund include:

  • price
  • costs
  • speed
  • likelihood of execution and settlement
  • order size and nature
  • any other relevant consideration

The applicable Investment Manager will take all reasonable steps to obtain the best possible results for the fund taking into account the above factors.

In determining the relevant importance of each of the above factors, the Investment Manager will take into account the following best execution criteria:

  • the objectives, investment policy and risks specific to the fund, as indicated in the prospectus of the fund;
  • the characteristics of the order;
  • the characteristics of the financial instruments that are the subject of that order;
  • the characteristics of the execution venues to which the order can be directed.

The Management Company would generally expect price to be the most important execution factor for the majority of trades that are executed, however there will be trades where price is not the most important factor when executing a trade. For example:

  • For smaller capitalised equities and less liquid stocks, the likelihood of execution and the provision of liquidity may be more important than the price.
  • When raising cash to fund redemptions, the speed and likelihood of execution may be more important.
  • When executing a large order, the ability to transact the whole of the order at a less favourable price may be more important than only executing a part of the order at the best available price at that time.
  • In certain markets, the level of price volatility may mean that timeliness of trade execution is the priority.
  • When executing certain instruments (e.g.: OTC derivatives or structured products) the choice of execution venue may be limited.

4. Execution venues

The applicable Investment Manager will either determine the ultimate execution venue/entity for a fund’s order on the basis of the order execution factors as described above (giving specific instructions to the broker) or the Investment Manager will satisfy itself that the broker has arrangements in place to enable the Investment Manager to comply with its obligations, the Management Company`s obligations and ultimately, their funds.

The Investment Manager maintains a policy identifying, for each class of instrument, the entities with which orders may be placed. Arrangements are only permissible when they are consistent with the obligations detailed in this policy.

The Investment Manager will assess which venues are likely to provide the best possible result for the funds on an order by order basis.

For transactions in the shares or units of Collective Investment Schemes, the sole point of execution will be the Scheme Operator or their agent and the price will be established as per the Scheme’s Prospectus. Orders will be placed with the relevant single venue according to the known valuation point of the Scheme in question at the quoted price.

5. Order handling

The Management Company does not trade for its own account. The following procedures and arrangements are in place to ensure the prompt, fair and expeditious execution of orders.

The Investment Manager shall:

  • ensure orders executed for a fund are promptly and accurately recorded and allocated;
  • ensure orders are executed sequentially unless prevailing market conditions make this impracticable or the interests of the fund require otherwise;
  • (where they are responsible for overseeing or arranging settlement of an executed order) ensure financial instruments/ sums of money received in settlement of the executed orders shall be promptly and correctly delivered to the appropriate account;
  • ensure that there will not be a misuse of information relating to pending orders, and take all reasonable steps to prevent the misuse of information.

The Investment Manger shall ensure the fair allocation of aggregated orders, including how the volume and price of orders determine allocations and the treatment of partial executions. In so doing, the Investment Manager shall consider the following factors:

  • it must be unlikely that the aggregation will work to the overall disadvantage of the fund;
  • where orders are aggregated but are only partially executed, the related trades shall be allocated in accordance with the order allocation policy.
  • where the Investment Manager aggregates an order of a fund with a transaction for its own account or other client orders it must not allocate trades in a way that is detrimental to the fund or the client
  • where the Investment Manager aggregates an order of a fund with a transaction for its own account and it is partially executed, it shall allocate the related trades to the fund in priority over those for its own account.

Proportionate allocation should not occur unless the management company has given prior approval.

  • if the Investment Manager is able to demonstrate to the fund or its other client on reasonable grounds that it would not have been able to carry out the order on such advantageous terms without aggregation, or at all, it may allocate the transaction for its own account proportionally, in accordance with the policy referred to above.

6. Monitoring and review

This order execution policy has been approved by each management company’s Board of Directors.

The Investment Manager will monitor, on a regular basis, the effectiveness of their arrangements and order execution policy, in order to identify and correct any deficiencies including allocation of trading orders and whether the quality of the execution venues/entities included in the order execution policy provide for the best possible result for the fund or whether changes are required to the execution arrangements.

The Management Company will also seek to monitor their delegates to ensure that this policy is adopted by them. Delegates will be required to submit on a monthly basis, specific Key Risk Indicator reporting (“KRI”) to the Management Company together with exceptions based reporting on an occurrence basis.

The Management Company  will review the reports of the Investment Manager so as to enable them to demonstrate that they have executed orders on behalf of the funds in line with this best execution policy.

This policy will be reviewed on an annual basis and whenever a material change occurs that affects the management company’s ability to continue to obtain the best possible result for the execution and placing of orders on a consistent basis.

7. Shareholder / information

The best execution policy is made available on the website of the Management Company and any material changes to the order execution arrangements or order execution policy will be made available to shareholders in the same manner.