MTE Order Execution Policy

1. Purpose of Policy

This Order execution Policy sets out information relating to how MilltechFX Europe SAS (MTE or the Firm) seeks to provide order execution services as required by the Markets in Financial Instruments Directive 2014/65/EU (“MiFID II”).

2. Scope of the Policy

This policy covers trading by MTE in the following financial instruments:

  • OTC Foreign Exchange (FX)
  • FX Forwards (deliverable / non-deliverable)
  • FX Options

It is worth highlighting that the obligation to execute orders on terms most favourable to the client and/or to act in the best interest of the client when transmitting orders to other entities for execution under MIFID II do not apply to FX spot transactions.

However, MTE applies its Order execution Policy to OTC FX spot trades as well as it makes all efforts to treat clients fairly and to manage any conflicts of interest that may arise in respect of such transactions.

3. Clients

As of the date of this policy, MTE only provides its services to clients categorised as Professional Clients and Eligible counterparties. Art. 30 of MIFID II clarifies that best execution requirements do not apply to eligible counterparties. Therefore, the information provided within this policy addresses the Firms obligations in respect to Professional clients only.

Please note that MTE, in accordance with its regulatory obligation, will nonetheless ensure that appropriate information will be provided to that category of clients in good time before the provision of services in relation to execution venues/brokers (For the purpose of the Policy an Execution venues/brokers means an investment firm authorised to receive and transmit orders and/or a third country firm equivalently authorised) and all costs and charges. Please refer to section 7 of this policy for the list of execution venues/brokers.

4. Information to Clients

4.1 Client request for information

When clients make reasonable and proportionate requests for information about the Policy the MTE order execution arrangements and how they are reviewed, MTE will answer clearly and within a reasonable time.

4.2 Status of the order

MTE will provide clients with information about the status of their orders if requested to do so.

4.3 Transaction notice

In accordance with applicable rules* (*Article 59 MiFID II DR), clients are provided systematically with a transaction confirmation after their orders have been executed. When a client sends MTE a reasonable request to obtain additional information or details on how the order has been executed, MTE will provide the information requested including proving the details on the price of each tranche where the order has been executed in tranches and the confirmation provides for an average price.

4.4 Annual information on the identity of execution venues/brokers and on the quality of execution

MTE will summarise and make public on an annual basis, covering the calendar year (January 1st to 31st December), for each class of financial instrument, the top five execution venues/brokers in terms of trading volumes, where it has executed client orders and/or transmitted orders to in the preceding year, together with information on the quality of execution obtained.

The reports will be published on MTE website, no longer than 4 months after the end of each calendar year, for a period of two years and will be accessible without costs and without any restrictions.

4.5 Inducements

As a general rule, MTE does not pay or receive any inducements, i.e., payments or non-monetary benefits to/from third parties, this includes authorised counterparty banks* (*Refer to section 7) and execution venues/brokers.

In the unlikely event, such situation arises; MTE will ensure that any payments or non-monetary benefits comply with the rules on inducements and will disclose accordingly all details to its clients.

MTE will also ensure that no payments received or paid would constitute payments for order flows. MTE does not receive inducements from execution venues/brokers to which client orders are directed which are linked to the volume of trades allocated to those execution venues/brokers

In the unlikely event, MTE changes its approach to enhance the services provided to its clients; MTE will ensure that any payments or non-monetary benefits received or paid comply with the rules on inducements and will disclose accordingly all details to its clients as well as provide its clients with an accordingly updated information on its order execution policy.

4.6 OTC execution

The foreign exchange market is mostly traded over the counter (“OTC”). Consequently, clients’ orders will most likely be executed outside trading venues. Executing orders outside trading venues may imply certain risks such as counterparty risk for instance.

Risks warning pertaining to such a mean of execution are provided in Schedule 4 of investment services agreement.

By signing the investment service agreement, clients expressly consent to MTE being able to execute their orders OTC.

5. Order Handling

MTE handles client orders on a first-in-first-out basis for:

  • trades received and transmitted for execution to another investment firm (“RTO”).

When MTE routes orders to Millennium Global Investments Limited (MGIL) for execution, in order to avoid conflicts of interests as MGIL is considered as a connected party to MTE, orders are sent directly to MGIL’s execution team. MGIL’s execution team executes all orders based on the time stamp the order arrives at its Order Management System (OMS).

Where execution is undertaken electronically (both via platform or voice execution), in order to reduce potential for significant market impact and impact to counterparty banks, MTE executes client orders in full size.

Where a client submits multiple orders, MTE will normally fill the orders in accordance with the time of their arrival. MTE may also choose, if it believes to be fair and that it will help delivering best execution, to fill the orders on an aggregated basis. In either case, depending on the market conditions, it may on occasion result in the client orders not being filled (either in full or in part).

6. Execution Factors

The Firm will endeavour to take all sufficient steps to obtain the best possible results for its clients taking into account the following Execution Factors:

  • The execution price and costs: MTE considers that generally price merits a high importance, however, the nature of financial instruments will determine if MTE shall give precedence of other factors such as speed or likelihood depending on the financial instrument characteristics. MTE will always pay due regard to the costs related to any execution to ensure that the costs will not jeopardise the end result.

  • Speed: MTE considers that for foreign exchange, speed is paramount taking into account the fact that markets tend to move quickly, i.e., the price of the financial instrument may vary swiftly and significantly.

  • Likelihood of execution and settlement: MTE considers that for less liquid financial instruments, likelihood of execution may take precedence over price and speed. Whilst settlement risk is paramount when unwinding trades.

  • Size of order: MTE considers that the size of the transaction and how it may impact the price of execution needs to be taken into account especially in case of large orders to minimise the market impact when executing orders or parts of an order.

  • Availability of price improvements: MTE will take into consideration the opportunity to execute an order at a better price than what is quoted publicly.

6.1. Relative importance of Execution Factors

In most circumstances, MTE would typically expect that the price to be paid or received would be the most heavily weighted execution factor in respect to all OTC FX instruments. However, there will be occasions when other factors may be more important or relevant and MTE may use its judgement and experience to give greater weight to other execution factors other than price based on the following types of criteria:

Electronic Execution:

  • Specific Client’s instructions

  • The execution venues/broker to which that order can be directed

  • The market conditions which may dictate how the order is directed.

Voice Execution:

  • Specific Client’s instructions

  • The execution venues/broker to which that order can be directed

  • The market conditions which may dictate how the order is directed.

7. Execution Venue/Broker and Authorised Counterparties Banks

Following review and a due diligence process, MTE has selected Millennium Global Investments Limited (MGIL) as its execution venue / broker and entered into an agreement with MGIL to ensure that MTE client orders are exclusively routed towards the authorised counterparties and that only those counterparties are selected when MTE receives and transmit orders.

Authorised counterparty banks are the liquidity providers selected based on their ability to ensure that MTE meets on a continuous basis the best possible results when applying the execution strategies specified above.

The list of authorised counterparty banks includes, but not limited to, Australia and New Zealand Banking Group Limited, BNP Paribas, Citibank N.A., HSBC Bank Plc, Merrill Lynch International (Bank of America), Morgan Stanley & Co. International Limited, NatWest Market, Société Générale, Standard Chartered Bank, State Street Bank and Trust Company and UBS AG, RBC.

7.1 List of factors used to select execution venues/brokers

MTE selection process is designed to identify a list of execution venues/brokers appropriate to the volume and type of client orders to address the overall and/or specific needs of its clients. The MTE risk committee is responsible for reassessing the execution venue/broker list annually and confirming that the execution venues/brokers remain appropriate to be on the list. The assessment conducted by the Risk committee will take into consideration, the following factors:

  • Access to large liquidity pools (e.g., liquidity breadth and depth)

  • Demonstrated trading expertise and experience in relation to OTC FX derivatives

  • Robust order execution policies and procedures

  • Consistent outcomes (e.g., prices, speed, costs) measured vs independently obtained TCAs

  • Results of RCSI monitoring

  • Results of the Risk function monitoring

  • Number of incidents, near misses or errors

  • Quality of market information and trading support

  • Quality of post-trade services (e.g., trade confirmation, settlement accuracy, margin management)

Please note that MTE is not required to scan the entire universe of possible execution venues/ brokers but to use its judgement and expertise to identify possible candidates and assess them against the criteria it has defined as being the most relevant for the type of financial instruments it wishes to trade.

7.2 Execution venues/brokers and liquidity providers on-going monitoring

MTE has set out that currently its best execution arrangements will be reviewed at the firm’s monthly risk committee meeting, comprising of European Head of Risk and other senior members of the firm. The monthly risk committee meeting reviews selected execution venues/brokers and list of counterparty banks on a quarterly basis to ensure that it is still up to date and will enable MTE to obtain the best possible results for its clients on a consistent basis.

The analysis conducted independently by MTE* (*Please refer to section 9.2 for further details) and is based on multiple factors such as, but not limited to: pricing structure, TCAs, clearing and settlement facilities, quality of back-office management, connectivity and technical infrastructures, market liquidity, trading controls, execution quality reports, reliability regarding the protection of confidential information, financial stability (e.g., liquidity and solvency risks) and any other relevant features.

Additionally, where relevant the risk committee may also, after having reviewed the volume traded, adopt a specific trading flow split between the selected execution venues/brokers to avoid over reliance on one specific counterparty.

8. Methods of execution

The FX market is predominantly an over the counter (OTC) and off exchange market. Under normal market conditions, MTE will execute its client orders only with authorised execution venues/brokers by using electronic trading tools or by voice. Irrespective of the method of execution MTE will ensure that all clients preferences are adhered to including the fact that orders will be executed with counterparties with whom the client has an adequate documentation in place. MTE implements internal controls on both electronic execution and voice executions, details of the controls can be provided upon request.

8.1 Electronic execution

Most MTE client orders will be executed through electronic means. Orders will be entered into the MTE execution engine that embeds a smart order router calibrated to ensure that client preferences are taken into account and that MTE execution strategies to achieve best execution are adequately deployed.

MTE routing decisions are made by advanced smart order router logic which adjusts to market conditions. The execution decisions will be made based upon either client instructions and/or the router’s programmed parameters. The router’s primary objective is to achieve best execution.

8.2 Voice execution

Voice execution is an execution method expected to be used when the client transaction size is too larger (i.e., exceeding the maximum streaming limit specified in the MTE execution engine), MTE execution engine is not accessible or has stopped operating. In that situation, clients will transmit their order to MTE by telephone, which will take care of transmitting it to the execution venue.

9. Execution strategies

When executing client orders or sending orders for execution, the execution desk will review a range of execution factors (such as market volatility, liquidity conditions, bid-ask spread, transaction size etc.) on a real time basis to determine the optimal execution strategies and implement such strategies using market data providers and/or by direct request to the selected execution venues/brokers trading desks.

Depending on the type of orders, market liquidity and all the considerations that have been outlined in section 6, MTE has designed a set of execution strategies as part of the sufficient steps to obtain the best possible results.

  • Market impact

Where execution is undertaken electronically, to reduce potential for significant market impact and impact to counterparty banks, it is important to execute in full size. To safeguard Best Execution and limit the market impact of the transaction, MTE may also adopt the maximum streaming limit to control the maximum transaction size permitted under each transaction. The maximum streaming limit may depend on the currency pair and the prevailing market conditions.

  • Price movement

To achieve Best Execution and to protect the client against an adverse movement between the ‘top of book price’* ( The lowest offer price available from the panel of banks when the client seeks to buy, or the highest bid prices available from the panel of banks when the client seeks to sell) after client clicks “Get Best Rates” button on the portal, and the price at which the trade is executed in the market, MTE will apply a price tolerance threshold (e.g., 5 basis points). If the actual market gap movement exceeds the MTE price tolerance threshold in a direction against Client, the trade will be rejected.

  • Benchmark fixing

When a client requests an execution at benchmark fixing, for example WMR 4pm, for FX forward transactions, the spot component of the transaction will be executed at the benchmark while the forward points will be executed via open market.

10. Client Specific Instructions

If a client provides MTE with specific instructions relating to a transaction, MTE will follow that instruction so far as is reasonably possible when executing the trade. By following client’s specific instructions, MTE has satisfied the obligation to provide clients with the best possible results in relation to that transaction or in relation to the part or aspect of the order to which the instruction(s) relate.

It is however possible that the specific instruction may prevent MTE to take all the steps it has designed in its order execution policy to obtain the best possible results in respect of the elements of the order not covered by the specific instruction(s).

11. Record keeping

MTE records and retains all data relating to its order execution policy including the execution venues/brokers selection process. Records are retained for five years in a durable medium and will be made available to the competent authorities upon request. All communications which relate to reception, transmission and execution of orders, and/or which will or may result in orders will be recorded and maintained for a period of 7 years or any other periods specified by the relevant regulator or government authority.

12. Data usage

MTE may need to use data reporting service providers and, in this regard, will transmit data relating to transactions to third parties. Clients are informed within the customer agreements that client data relating to order execution provided to MTE may be sent to the competent authorities, its affiliated entities and, where relevant, to service providers or subcontractors of MTE or of its affiliated entities, in accordance with the General Data Protection Regulation.

13. Monitoring

Compliance with MTE Order Execution Policy is subject to regular controls and verifications, at a frequency determined according to regulatory and operational risks to which MTE is exposed but no less than on annual basis or where a material change occurs.

MTE has adopted a number of procedures and control processes at the business level as well as at compliance and risk levels through which it monitors the effectiveness of execution arrangements to identify and where appropriate correct any deficiencies.

This includes but is not limited to:

  • On-going monitoring of execution quality through execution factors specific reports, exception reports, sampling trade reconstruction, external independent analytics services

  • Monthly review of execution venues/brokers and liquidity providers performance

  • Regular assessment of execution strategies, execution factors ranking and execution methods

14. Complaints

Any complaint concerning this execution policy may be addressed to:

Eliana Sotiri – RCSI – esotiri@milltechfx.com copy to eucompliance@milltechfx.com