Version 2, November 2023
Freetrade Europa (“Freetrade”, “we”, “our”, “us”) will carry out orders instructed by you, as a retail client, in accordance with this policy. By placing an order through our mobile application you acknowledge and accept this.
As a regulated stockbroker we are required to take all sufficient steps to achieve the best possible result available to us when executing customer orders, taking into account a range of execution factors. This is referred to as the “best execution” requirement.
Freetrade Europa transmits all orders to Freetrade Limited for execution. As a UK regulated firm Freetrade Limited monitors and reviews its execution arrangements to ensure it meets its “best execution” requirement.
In considering how to handle an order we take into account the range of execution factors listed below. When handling orders for retail clients, price and cost are the execution factors we prioritise in determining the quality of execution, and deciding how to handle the order to get the best result available to us.
We rely on a number of market makers, executing brokers, trading venues and order routing providers to execute your orders. We monitor and review these third parties to ensure orders are executing in line with this Order Execution Policy
Our decision on which execution venue to direct your order to will be based on the Execution Factors set out in this policy.
How we execute your order, and which third parties we rely on depends on the instrument you are trading.
We may execute your orders outside of an EU regulated trading venue. This would include where your orders are executed with our US broker, a US executing broker or on a US trading venue.
By consenting to this Order Execution Policy you express your consent to us arranging for your orders to be executed outside an EU Regulated Market, MTF or OTF.
Orders in EU listed instruments
Orders in EU listed instruments are passed through our EU order routing system, and directed via Freetrade Limited to one of the EU trading venues we are connected to. The trading venue that your order is directed to is determined by the type of order you place and the location of the primary listing of the instrument you are looking to buy or sell. Orders are placed on the selected trading venue’s order book and execute directly with other venue participants. The trading venues we send orders to have pricing controls in place to ensure orders execute in line with market prices.
There may be instances where your order is rejected, for example if there is no liquidity in the instrument you are looking to trade, or if the price available is not in line with wider market prices.
When you place an order in a UK listed instrument it is passed via Freetrade Limited through an order routing system to the UK’s Retail Service Provider (RSP) network. The RSP network is a collection of market makers registered with the London Stock Exchange, designed to service retail customer orders in listed securities.
When you place an order, Freetrade Limited requests price quotes from market makers on the network, and executes your order at the best price quoted to it at that time.
There may be instances where your order is rejected, for example, if no market makers provide quotes at the time you place your order, or if the quote Freetrade Limited receives is at a price that is worse than the price available on the primary venue where that instrument is traded (and is outside of our tolerance for differences). In these situations we will notify you in app that your order has been rejected, and you will have the opportunity to place it again.
During the London Stock Exchange market open auction and certain unscheduled intraday auctions RSP market makers are not obliged to provide quotes, therefore in these periods you are more likely to experience order rejections.
Orders for the majority of US-listed instruments are transmitted to our third-party US-based broker-dealer (“ US Broker”) via Freetrade Limited. For orders in US listed instruments transmitted to our US Broker we allow fractional share quantities of less than one full share. How an order is handled by our US Broker depends on whether the order is for a fraction of an instrument or a full share of an instrument.
Our US Broker seeks quotes and executes orders, as agent, or on a number of execution venues, including US executing brokers and US trading venues.
In all cases, our US Broker commits to execute at the National Best Bid or Offer (“NBBO”) as of the time of your order, for all whole share and fractional share components of a transaction, in line with its best execution objective.
Where we accept orders in unlisted instruments, e.g. in relation to trading in rights stemming from corporate actions such as subscription rights, the orders will be transmitted to our settlement partner for execution.
By way of derogation from the principles stated elsewhere in this policy, the factor given the highest priority for these orders is the likelihood of execution and settlement. The orders placed by customers in relation to such instruments are aggregated and transmitted at a time deemed appropriate by us and may as a result not be executed close in time, and may deviate significantly in price, compared to when the order was placed. You should be conscious to accept the risk associated with this type of order. There is no guarantee that all or parts of your order will be executed, for example due to lack of liquidity in the instrument you are looking to trade.
Freetrade will not be liable for losses incurred in relation to orders in unlisted instruments, save any assessment made by us that we have fallen short of our best execution obligations.
We offer a number of different order types.
If you decide to place an Instruction outside of the available trading hours for a Security, you will place these Instructions using our Basic Order type. Please be aware of the following features and risks:
You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Basic Order type, save any assessment made by us that we have fallen short of our best execution obligations.
Depending on the prevailing market price at the time of execution, the full amount instructed may not be invested. If the instruction exceeds the amount of available cash in your account, we will automatically lower the number of shares purchased accordingly. Any surplus will be returned to your account in the form of cash.
During the available trading hours for a Security we facilitate commission free Instant Orders. Instant Orders are sent for execution immediately after being placed through our app. You should be aware of the following risks when placing Instant Orders.
You should be conscious to accept the risks associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Instant Order type, save any assessment made by us that we have fallen short of our best execution obligations.
A Triggered Order is an instruction to submit:
You can only cancel a Triggered Order (of any type) up until the point the Trigger price is observed and the order is triggered. Once the order has triggered, it is not possible to cancel.
Where a Triggered Order executes, the actual execution price you receive may be higher or lower than the Trigger price due to market prices moving between an instruction triggering and the order executing, or due to differences between prices published in data feeds and the price at which our market counterparties or other market participants available to us are willing to execute a buy or a sell order.
If the observed market price reaches the Trigger price you set, it will not always mean that your order will be sent or executed, for example, due to differences between price data and the prices at which our market counterparties or other market participants available to us are willing to buy or sell.
You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Triggered Order type, save any assessment made by us that we have fallen short of our best execution obligations.
A Limit or Stop Loss Order is an order to:
You can only cancel a Limit or Stop Loss Order up until the point it is triggered.
Once the order has triggered, it is not possible to cancel. Buy Limit Orders and Sell Limit Orders in US instruments will only execute at or better than the Limit Price set by you.
Stop Loss Orders will not necessarily execute at the Stop Price set by you and will often execute at a lower price, due to the inherent nature of moving markets and the price at which our market counterparties or other market participants available to us are willing to buy at that time. If the observed market price reaches the Limit Price or Stop Price you set, it will not always mean that your order will be executed, for example, due to differences between price data and the prices at which our market counterparties or other market participants available to us are willing to buy or sell.
You should be conscious to accept the risk associated with this type of instruction. Freetrade will not be liable for losses incurred due to the selection of the Limit or Stop Loss Order types, save any assessment made by us that we have fallen short of our best execution obligations.
By placing a Limit or Stop Loss Order with us you are providing your express consent to us not making public the details of your Limit or Stop Loss Order prior to execution.
Recurring Order
Depending on your investment size, allocation, and the prevailing market price at the time of execution, your order (or parts of your order) may not execute on your designated investment date due to insufficient available cash. If your Recurring Order does not execute due to insufficient cash, market conditions or any other reason, we will not attempt to execute your order again. Any surplus will be returned to your account in the form of cash. We will execute your next Recurring Order on your following designated investment date.
You should be aware that accepting this type of instruction comes with associated risks. Freetrade is not responsible for any losses that occur as a result of choosing the Recurring Order type, except in cases where we determine that we have not met our obligations to provide best execution.
We send orders for execution in the sequence in which they are received. We do not prioritise one customer’s order over another. It is only in exceptional circumstances that we may prioritise orders - for example, during an external or internal outage, we may prioritise sell orders over buy orders, in order to minimise potential harm to our customers.
Acting on specific instruction from you in relation to an order you place with us may prevent us from taking the steps we have designed and implemented in this policy to obtain the best possible result for the execution of those orders. However, as our orders are automatically executed or queued for execution when placed through our app, we do not envisage situations where we will be in a position to act on specific instructions.
We monitor execution performance for compliance with this policy, as well as periodically reviewing the policy itself to ensure that we are delivering the best execution results for our clients. We will let you know about any important changes being made here.
