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Execution of orders on Equiduct
Who is Equiduct and how does it work?
Equiduct, a European regulated market, is an alternative investment platform run by Börse Berlin AG. It analyses and compares the prices of orders on various platforms (such as BATS Europe and Turquoise) and Euronext. Equiduct calculates an average price based on the various prices of the various order books. The VBBO (Volume weighted Best Bid and Offer) takes into account the average size of a retail order.
What are the benefits of Equiduct?
You are sure to have the "best execution". In line with the principle of "Best Execution", when placing a market order, Keytrade Bank undertakes all the necessary steps to have the best possible execution of your order on an exchange, taking into account the factors listed in its policy, being mainly the execution price and the costs associated with the execution.
Which orders are sent to Equiduct?
Currently, only some of the shares and trackers in Brussels, Paris and Amsterdam are traded on Equiduct. The other financial instruments (warrants, Turbos, speeders) cannot be traded on Equiduct. In the future, new shares and trackers may be added. As soon as new shares are available for trading on Equiduct, orders for these shares will automatically be sent to Equiduct.
Not all orders can be routed to Equiduct. The Equiduct universe is more limited than that of Euronext. From a certain size onwards orders will be sent to Equiduct even if the instrument is part of the Equiduct universe. In other words, Equiduct only handles orders that meet the characteristics of an average retail order.
What do I need to do to access it?
You do not need to do anything. Orders for certain shares and trackers traded in Brussels, Paris and Amsterdam are automatically sent to Equiduct. There are no changes in the transaction and tracker costs, nor in any of the other fees.
How can I carry on sending my orders to Euronext?
You can decide to have your orders executed on Euronext for these Financial Instruments by choosing Euronext as the place of execution, order by order. Your order will then be deemed to be a specific instruction under the terms of Article 6 of the Order Execution Policy.
Will I still be able to see my order in the order book?
When your order is sent to Equiduct, the order will not be visible in the order book of Euronext orders. This is only displayed at the level of Euronext, in other words, only orders sent to Euronext are shown.
How can I check whether my order received a best execution?
In case of execution on Equiduct, you need to click on this link (click on replay, choose the symbol or name of the instrument and insert the time of execution of your order).
For an execution on other markets, please send an e-mail with your account number and the details of your order to email@example.com in order to get a report of best execution. Keytrade Bank will provide you with a report detailing the conditions of your order and the price difference in your favour with regard to the reference market.
What is the VBBO?
VBBO is an abbreviation of Volume Weighted Best Bid and Offer.
It is a rate in real time, which reflects a consolidation of the prices on the major European trading platforms (both the regulated markets and the Multilateral Trading Facilities or MTF).
This price shows you the average of the prices of every stock exchange at which you would be able to buy or sell. Even the number of shares potentially traded at that price is being mentioned.
The VBBO is therefore always the best price or the price of the home market yet calculated based on the volume of an average retail order. A bigger order than the average volume could receive a better price if the VBBO were to be calculated based on the real volume of the big order.
In order to gain access to real time prices on this exchange, you must first sign a contract on the Trading Site, and you can do this using your confirmation code.
What is the largest market of a certain financial instrument?
For a given financial instrument (identified by its ISIN code) which is listed on a number of markets, Keytrade Bank determines the largest market.
The largest market is the market with the highest number of trades in the last 6 months: A larger volume increases the likelihood of a better "spread" (or a smaller difference between the "ask" price (the price at which you can purchase a financial instrument) and the "bid" price (the price at which you can sell a financial instrument) and therefore better prices overall.
- There are, however, two other factors that may influence trading costs and determine what price you will pay:
- the currency in which the instrument is traded on the markets involved, and the exchange risk it involves;
- the transaction costs on the markets involved
- it is not only when buying that you can choose the biggest market: in fact, at Keytrade Bank, you should always sell on the market where you bought the instruments. This may mean as a result that you will not benefit from the best possible trading price.
HIGHEST in the volume column indicates the largest market.
Where I can find more information on Equiduct?
You can find information here.