Investment banking
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Orders Handling Policy
ORDERS HANDLING POLICY
I. GENERAL
United Bulgarian Bank (hereinafter “the Bank”) recognizes the need for the prompt, fair and expeditious execution of all clients’ orders.
The current policy sets the standards for handling the orders the Bank receives from its clients.
II. SCOPE
This policy applies to all Business Units of the Bank that execute or receive and transmit orders for execution.
III. ORDERS HANDLING
All Business Units involved in handling client orders implement effective procedures and controls in order to ensure compliance with this policy.
All clients’ orders are executed in a prompt, fair and expeditious manner, given the type of the transactions.
All orders are promptly and accurately recorded and allocated.
All comparable clients’ orders are executed in the sequence of receipt, considering the prevailing market conditions and client’s interest. For the purpose of this policy, the Bank recognizes the following cases as comparable orders (indicatively):
- Orders related to the same financial instrument;
- Buy or sell orders;
- Orders received by the same client via similar medium (online/offline).
Orders which do not have the above characteristics are not considered comparable orders.
In case the Bank encounters material difficulties in the execution of a retail client’s order, the client is informed immediately.
Material difficulties arise in the following circumstances (indicatively):
- Classification of a share under surveillance
- Classification of a share under suspension
- Trading halt of the financial instrument in a regulated market
- Bank’s or correspondent third parties’ IT infrastructure issues
- Any other event resulting in non-executing an order in a timely manner and in a way that meets clients’ expectations.
The Business Units responsible for execution of orders implement effective controls in order to:
- Identify potential material delays
- Identify the client that should be informed about material difficulties
- Inform the client
IV. AGGREGATION AND ALLOCATION OF ORDERS
The aggregation of client orders, either with those of another client(s) or those of the Bank, occurs only when the aggregation will not result to the disadvantage of a client, on behalf of whom the Bank executes an order.
Prior to the aggregation of clients’ orders, the Bank notifies the client about the disadvantages that may result from the aggregation. The aggregation of orders without prior notification of a client is prohibited. The notification may be included in the agreement for the provision of investment services or conducted through a communication medium stated explicitly in this agreement.
All clients’ aggregated orders are allocated in a timely, fair and objective manner. No unfair preference is given either to the Bank or to a client. All orders are allocated according to:
- The price on which a transaction was executed
- The volume weighted average price for a series of transactions
When aggregating clients’ orders for (full or partial) execution on the Bulgarian Stock Exchange – Sofia, the Business Units, responsible for execution of orders, allocate the aggregated orders in the following manner:
- The allocation of the transactions to the individual clients’ orders is handled in such a manner as if the clients’ orders were not aggregated and were executed sequentially in the order of their placement.
- When allocating transactions to clients’ orders, the responsible Business Units follow the sequence of receipt of the clients’ orders and allocate the transactions accordingly, while taking into consideration the characteristics of the orders, the clients’ specific instructions and the appropriateness of partial execution.
- When the sequence of receipt of the orders justifies full or partial allocation of a transaction to a client’s order that does not allow for partial execution, the responsible Business Units do not allocate the transaction to the client’s order if the result of the allocation will come in conflict with the client’s specific instructions. In such an event, the next recorded order is considered for the allocation of the transaction.
In case the execution venue or the rules of a public offering require(s) a different allocation of orders (including different allocation priorities for market and limit orders), the Bank will comply with the specific requirements of the execution venue or the rules of the public offering and will apply the required orders allocation method.
In all other events, where the Bank is able only to partially execute aggregated clients’ orders, allocation occurs proportionally, unless allocation is not detrimental for the client.
Orders aggregated with transactions on the Bank’s own account, which are partially executed, are allocated to the client in priority to the Bank. In case, the Bank is not able to execute client’s order with advantageous terms without aggregating them with transactions on own account, it allocates these transactions proportionally, provided the allocation is not detrimental to the client.
The Bank retains records of all orders aggregated either with other clients’ orders or with transactions on own account.
V. MISUSE OF CONFIDENTIAL INFORMATION
The Bank’s Personnel and executive staff members do not misuse confidential information resulting from executed or pending client orders. The Bank takes all necessary measures to prevent the misuse of information by its staff members.
Misuse of confidential information occurs in the following circumstances:
- Disclosure of information to other parties
- Use of confidential information for own account
- Use of confidential information for Bank’s benefit
- Any use of confidential information other than for the execution of a client’s order in accordance to the client’s best interest.
Communication to market makers or other entities whose normal course of business is the buying and selling of financial instruments and the execution of orders, should not to be considered as a misuse of information, provided the communication is for the purposes of the execution of a client’s order.
VI. LIMIT ORDERS HANDLING
A client limit order is an order to buy or sell a financial instrument at its specified price limit or better and for a specified volume.
In case of limit order in respect of shares admitted to trading on a regulated market which are not immediately executed under prevailing market conditions, Bank’s Business Units responsible for the execution of orders, make that limit order immediately public in a manner which is easily accessible to other market participants, unless the client expressly instructs otherwise.
In order to make public the client limit order, the Business Units transmit the order to a regulated market or a MTF.
The Business Units responsible for the execution of clients’ orders are permitted not to make a client limit order public under the following circumstances:
- The order is larger in scale compared with normal market size (see Appendix B); and
- The client has given specific instructions not to publish the order.
The Business Units that receive client’s instructions not to display an order publicly document and retain a record with these instructions.
VII. RECORD KEEPING
Business Units maintain records regarding client orders as follows:
- In relation to every order received by a client, the information (considering the relevance to the specific order) mentioned in column A of Table 1 in Appendix A.
- Immediately after the order execution confirmation, the information in column B, Table 1, Appendix A is recorded
- In case of transmitting the order to a third party, the information in column C, Table 1, Appendix A is recorded.
This Policy is approved by UBB Executive Directors on 08.10.2009 and approved by UBB BoD on 10.03.2010.