Client Published Order Execution & Order Allocation Policy UBS AG, Jersey Branch

Part A – General

I. Introduction

1. Scope

This Order Execution and Order Allocation Policy sets out UBS AG, Jersey Branch ("UBSJ") policy in respect of its client order execution methodology for taking all reasonable steps to obtain the best possible result for its clients in accordance with the Jersey Financial Services Commission's Codes of Practice for Investment Business under the Financial Services (Jersey) Law 1998 and  to align with The Markets in Financial Instruments Directive (MiFID)1   Best  Execution  requirements  when  executing  Client Orders.

This policy applies to:

a)  the transmission to or placement with Execution Entities of Client Orders received from UBSJ clients (referred to in this policy as acting as a Receiver and Transmitter of Orders ["RTO"]); and

b)  the execution of Client Orders by UBSJ on behalf of clients. In such case UBSJ acts as "Executor of Orders".

2. Relevant Order Execution Factors

Whenever UBSJ acts as RTO or as Executor of Orders, it will take all reasonable steps to obtain the best possible results for all clients taking into account the factors in (a) to (f) below. Each class of Financial Instrument is assessed by UBSJ in order to determine the relative importance of these factors, taking into account the characteristics of

(i) the Client;

(ii) the Client Order;

(iii) the Financial Instruments that are the subject of that Order; and

(iv) the Execution Entities or venue to which that Order can be directed.

Except as set out in the following paragraph, UBSJ will give total consideration primary importance for execution of client orders. "Total consideration" comprises of factors (a) and (b). However depending upon the circumstances, factors (c) to (f) may be of more importance for a particular Order if they are instrumental in providing the best possible result for that particular order or in terms of total consideration.

The factors are:

a)  The price of the Financial Instruments which are offered by that Entity or venue; and

b)  The direct and indirect costs related to execution of such

Financial Instruments, such as:

–  All expenses incurred which are directly related to the execution of the Order

–  Execution Venue fees,

–  Clearing and settlement fees; and

–  Any other fees paid to third parties involved in the ex- ecution of the Order

c)  Speed

d)  Likelihood of execution and settlement e)  Size and nature of the Order

f)  Any other relevant consideration (such as market impact and implicit transaction cost).

II. UBSJ as Receiver and Transmitter of Orders

UBSJ is a Receiver and Transmitter of Orders for the following classes of financial instruments:

–   Cash Equities

–   Units/shares in Funds

–   Exchange Traded Derivatives – futures and options

–   Secondary market Structured Products

–   Cash Bonds

–   Cash Commodities

–   FX OTC Swaps, Forwards and Options

3. Selection of Execution Entities

Subject to any exceptions detailed below, all orders will be transmitted to and placed with the Execution Entities which are able to demonstrate to UBSJ that they have in place execution arrangements enabling UBSJ to comply with its obligations to act in the best interests of its clients.

4. Criteria for Selection of Execution Entities

The following criteria are taken into account in assessing and selecting the Execution Entities:

–   The terms of that Entity's execution policy, where such policy is available.

–   That Entity's methodology in determining the relative importance of the above mentioned factors listed in section (2) based on the Entity's commercial experience and judgement.

–   That Entity's assessment and use of Execution Venues in order to enable that Entity, on a consistent basis, to achieve the best possible result when executing Client Orders  together  with  the  Entity's  processes,  methods and reasons for executing Orders in a particular way as detailed in its own Execution policy. It is permissible for the Entity to execute Orders by crossing orders, itself acting as an Execution Venue by selling from it's own inventory, placing the order on a regulated market or Multi-Lateral Trading Facility or placement with a third party to obtain execution.

–   The approach taken by the Entity to the aggregation of Client Orders.

–   That Entity's processes and systems for monitoring its execution procedures and in particular in obtaining the best possible result in accordance with the factors detailed in 2 above.

5. Execution Entities with which all Orders are placed, and/or to which all Orders are transmitted for Execution

Subject to any exceptions such as receipt of specific client instructions and after reviewing the execution policies and methodologies of potential Execution Entities, UBSJ has determined that the Execution Entities set out in Annex A are the most significant entities which enable UBSJ to meet its execution obligations. This list of Execution Entities is not exhaustive and will be kept under review and updated in accordance with this policy. UBSJ reserves the right to use other Execution Entities additional to those listed in Annex A where it deems appropriate in accordance with this policy.

III. UBSJ as Executor of Orders

UBSJ acts as an Executor of Orders for the following classes of financial instruments:

–   Units/Shares in Funds

–   Primary & Secondary Market Structured Products

–   Cash Bonds & European Commercial Paper

6. Order Execution Methodology

UBSJ will execute a Client Order by one of the following methods or combination of methods:

–   Units/Shares in Funds

– Subscription/redemption placed direct with fund provider

–   Primary & Secondary Market Structured Products

–  Market selected based on best terms but also on valuation, services and availability of secondary markets – direct to the provider

–   Cash Bonds & European Commercial Paper

–   Request for quotes across the market

7. Execution Venues

When placing Client Orders, UBSJ will choose an Execution Venue that it considers to be the most appropriate to meet its obligation to obtain the best possible result for its clients.

A list of Execution Venues in respect of each class of Financial Instruments can be found at Annex B.

IV. General Provisions

8. Client Consent

This policy details the Order Execution and Order Allocation arrangements UBSJ has put in place to meet its Best Execution obligations. Clients will be deemed to have accepted the arrangements put in place under this policy when they next place an order for execution with UBSJ, or where they only wish to be provided with discretionary portfolio management services, they will be deemed to have accepted when they appoint UBS UK to provide these services using a UBSJ bank account.

9. Specific Client Instructions

Where a Client provides specific execution instructions or specific instructions on certain elements of the Order, the Order will be executed in accordance with those instructions. This may prevent UBSJ from taking the steps it has designed and implemented in this policy to obtain the best possible result for the execution of those Orders in respect of the elements covered by those instructions.

10. Limit Orders

Where a client provides an instruction to place an order at a specific price limit or better, and for a specified size (a limit order), then it may not always be possible to execute that order under the prevailing market conditions. UBS is required to make the order public (show the order to the market) in such case unless the client agrees that we need not do so. UBSJ will not publish such information although other parts of the UBS group involved in the execution of the trade may do so in line with relevant mar- ket conventions and at their discretion. Consent to this approach is deemed as given by the client in line with section 8. of this document unless we are specifically instructed otherwise.

11. Orders Executed outside a Regulated Market

There may be occasions when achieving the best possible result in the carrying out of a client order requires executing such order outside a Regulated Market. Clients consent to UBSJ acting under discretion in such circumstances by demonstrating acceptance of this policy. This only applies to financial instruments admitted to trading on a Regulated market or MTF.

Part B – Order Allocation

12. General

UBSJ will execute or transmit Client Orders in a prompt, fair and expeditious manner relative to other Client Orders or its trading interests. UBSJ will ensure that executed Orders are promptly and accurately recorded and allocated. UBSJ will carry out otherwise comparable Client Orders sequentially in accordance with the time of their reception unless:

–   the characteristics of the Client Order or prevailing market conditions make this impracticable; or

–   the interests of the Client require otherwise.

Orders are  not  treated as otherwise comparable if they are received by different media and it would not be practicable for them to be treated sequentially.

13. Aggregation of Client Orders

Client Orders or transactions will not be carried out in aggregation with another Client Order unless:

–   It is unlikely that the aggregation of Orders and transactions will work overall to the disadvantage of any Client whose Order is to be aggregated.

–   It has been disclosed to each Client whose Order is to be aggregated that the effect of aggregation may work to its disadvantage in relation to a particular Order.

Where an aggregated client order is partially filled, allocation to clients will take place on a strict pro-rata basis. Where a strict pro-rata allocation is not possible e.g. where this would give rise to fractional allocations, the  allocation will  be in the best interests of all relevant clients and any allocation will be undertaken on a fair and reasonable basis.

14. New Issues Procedures (IPOs)

It is UBS policy that all clients are treated in a fair and even- handed way when allocating new issues.

Where new issues are oversubscribed and allocation is cut back, reallocation will generally take place on a pro-rata basis. In all instances, the allocation will be in the best interests of all relevant clients and any re-allocation will be undertaken on a fair and reasonable basis.


Part C – Monitoring and Review

15. Monitoring

UBSJ will periodically monitor the effectiveness of the execution arrangements it has in place with the Execution Entities and Venues and assess these results against its obligation to provide Best Execution against the execution factors under Section 2. Where deficiencies are identified these will be corrected.

16. Review of Policy

UBSJ Order execution policy will be reviewed regularly and the provisions of this policy will be reviewed annually and also whenever a material change occurs that affects UBSJ's ability to continue to obtain the best possible result for its Clients.

All terms on capitalised terms are defined in the Glossary in Appendix A.

1 Jersey is not a member of the European Economic Area and is therefore not bound by legislation such as MiFID. However, in the interest of its clients, UBS AG Jersey Branch has decided to comply with the Best Execution requirements of the MiFID Directive

Appendix A – Glossary


Where we are acting as Agent, we are facilitating a transaction between clients and a market counterparty.


Means any natural or legal person to whom UBSJ provides Investment and/or Ancillary Services.

Client Orders/Order

Means a transaction buying or selling one or more Financial Instruments, whether it is on behalf of clients, or at the request of clients.

Closed Architecture Structure

Under this structure UBSJ will not request quotes from across the market but will obtain quotes solely from within the UBS Group. In such cases UBSJ will sample other market participants to compare UBS prices for best execution purposes.

Execution Entity/Entity

Means the entities to which UBSJ transmits or places Orders for execution.

Execution Venue

Means a Regulated Market, an MTF, a Systematic Internaliser, or a market maker or other liquidity provider or an entity that per- forms a similar function in a third country to the function performed by any of the foregoing.

Executor of Orders

Has the meaning set out in Part A I (1) of this policy.

Financial Instrument


i.Transferable securities;
ii. Money-market instruments;
iii. Units in collective investment undertakings;
iv. Various options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices, financial measures or commodities;
v.  Derivative instruments for the transfer of credit risk; and vi. Financial contracts for differences;
vii. FX OTC-swaps, forwards and options.

For the avoidance of doubt, "Financial Instruments" do not include spot foreign exchange transactions or loans.

Investment Services

Means the provision of a service in relation to a financial instrument which may include;
(a) reception and transmission of orders in relation to one or more financial instruments;
(b) execution of orders on behalf of clients;
(c) dealing with own account;
(d) portfolio management;
(e) the making of a personal recommendation;
(f) underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
(g) placing of financial instruments without a firm commitment basis

Open Architecture Structure

Under this structure UBSJ will request quotes from across the market for the best terms.

Receiver and Transmitter of Orders (RTO)

An entity that transmits or places Clients Orders received from clients to/with Execution Entities.

Regulated Market/Multi-lateral Trading Facility (MTF)

Means  a multi-lateral system operated and/or managed by a market operator, which brings together or facilitates the bringing together of multiple third-party buying and selling interests in financial instruments – in the system and in accordance with its non-discretionary rules – in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and/or systems, and which is authorised and functions regularly and in accordance with the provisions.

Systematic Internaliser

Means an Investment Firm which, on an organised, frequent and systematic basis, deals on own account by executing Client Or- ders outside a Regulated Market or an MTF.

Annex A

Execution Entity

Class of Financial Instrument

UBS Switzerland AG

Cash Equities


Secondary Market Structured Products


Cash Bonds


Units/Shares in Funds


Exchange Traded Derivatives – futures and options


FX OTC – swaps, forwards, and options


Cash Commodities

Brown Brothers Harriman & Co

Units/Shares in Funds

Citco Fund Services

Units/Shares in Funds