PROCEDURE OF EXECUTION OF ORDER REGARDING FINANCIAL INSTRUMENTS
I. GENERAL PART
1.1. The Procedure on Execution of Orders regarding Financial Instruments (hereinafter –
Procedure) regulates provisions, terms and requirements to be followed by AB Šiaulių
bankas (hereinafter – Bank) when executing or transferring orders of non-professional or
professional customers regarding financial instruments to the best result for the customer.
1.2. The Procedure has been prepared in accordance with the Law on Markets in Financial
Instruments of the Republic of Lithuania (hereinafter – Law) and Rules for Investment
Services and Acceptance and Execution of Customers' Orders approved by the Bank of
Lithuania (hereinafter – Rules). The Procedure complies with the Order Execution Policy as
it is foreseen by the Law and Rules, however, referring to the Procedure of preparation,
approval and publication of the Bank’s internal documents approved by the Management
Board of the Bank the present document, in context of the Bank’s internal documents, is
assigned to the competence of the Management Board and, therefore, called the
Procedure.
1.3. Definitions used in this Procedure shall be understood as they are defined in the Law, the
Law on Securities of the Republic of Lithuania and the Rules.
II. ACCEPTANCE, REGISTRATION AND EXECUTION OF CUSTOMERS' ORDERS
2.1. The Bank employee accepting the customer’s order shall make sure that the order is
placed by the customer himself/herself or by his/her duly authorized person, check
whether the customer’s order complies with requirements established by the Bank for the
order form and the way of placement and whether all information required to execute the
order is provided. In the event of failure to meet at least some of these conditions, the
Bank employee shall have the right to reject the order.
2.2. All orders received from customers together with the Bank’s investment decisions are
recorded in the chronological order in the book of order registration immediately, but no
later than the end of the working day.
2.3. The customer’s orders are executed immediately unless otherwise specified in the order or
the agreement. In case the customer’s order is not executed in accordance with conditions
specified by him/her or within a reasonable period of time due to unfavourable
circumstances beyond the Bank’s control (trade or payment suspension, cancellation,
communication problems, market collapse, fall in price, absence of supply, etc.), the Bank
shall immediately inform the customer about these circumstances.
2.4. When the customer provides a particular order, the Bank shall execute the customer’s
order in an accurate manner in accordance with the conditions specified in the order. The
Bank shall have the right to deviate from conditions specified in the order if in particular
circumstances it is necessary to protect the customer’s interests and the Bank was not able
to ask the customer in advance or did not receive the answer to its enquiry. In this case,
the Bank shall collect and keep together with the order evidence proving the need to
change conditions of execution of the customer’s order and shall immediately inform the
customer that the order was executed under conditions other than those specified in the
order, while the results of the Bank’s actions shall become binding to the customer.
2.5. In case no particular conditions are specified in the order, the conditions specified in the
Agreement on Provision of Investment Services and the Procedure shall be applied.
2.6. In case the customer cannot communicate the order in some way (e.g. using the e-banking
system) due to a communication or system failure, he/she can choose any other way to
place the order specified in the Agreement on Provision of Investment Services.
2.7. The Bank shall take all possible measures to ensure the order execution sequence – the
orders shall be executed in compliance with a time-priority principle for the placement of
orders.
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III. FACTORS OF ORDERS AND THEIR RELATAIVE IMPORTANCE
3.1. The Bank, when executing the customer’s order, shall act to achieve the best possible
result for the customer taking into account the price of financial instruments, order
execution costs, speed, order execution and payment probability, order size, content and
other circumstances important for the order execution.
3.2. When determining the relative importance of factors specified in Paragraph 3.1, the Bank
shall take into account the following criteria:
3.2.1. customer-specific characteristics, including his/her category (non-professional or
professional);
3.2.2. characteristics of the customer’s order;
3.2.3. characteristics of financial instruments which the order is being placed for;
3.2.4. characteristics of order execution places where the customer’s order can be
executed.
3.3. The Bank shall consider the Price of financial instruments to be the most important factor
when executing the order. Orders shall be executed under market conditions following the
time-priority principle for the placement of similar orders. Order execution costs, as a
constituent of the total amount of payments for transactions, shall also be considered a
very important factor. The Bank shall choose order execution places accessible to the Bank
with the lowest order execution costs. Order execution speed shall be relevant in cases
where the market price of a financial instrument changes rapidly and order execution
speed may affect the final amount of payments. However, orders shall in the first place be
executed and transferred following the time-priority principle for the placement of orders.
The Bank shall execute customers’ orders in order execution places with the highest
probability of execution and payment and the minimum risk. The Bank searches for the
markets ensuring liquidity and possibility to execute the customers’ orders of any size,
however, there may be market where the size of the order can have influence on the order
execution due to the liquidity or practices applicable by this market.
3.4. The Bank, when executing the non-professional customer’s order, shall determine the best
possible result for the customer taking into account the total amount of payments, which
includes the price of a financial instrument and order execution costs.
IV. ORDER EXECUTION PLACES
4.1. An order execution place shall mean a regulated market, multilateral trading facility
(hereinafter - MTF), financial brokerage firm carrying out systematic trading, market
maker, other entity maintaining liquidity or any other trading place. If a financial
instrument is not traded in any of previously mentioned places, i.e. it’s not included in the
trading lists, such transactions related financial instrument will be concluded in the OTC
market. In this case the Bank may execute order at own account, along with another
customers order, or another third party. The order will be executed at a price that reflects
the prevailing market conditions.
4.2. The Bank shall execute the customer’s orders in trading places specified in Annex 1. The
Banks shall choose order execution places taking into account costs, liquidity, and
probability to execute the order. In exceptional cases, the Bank shall be able to deviate
from the list of order execution places included in this Procedure and to execute the order
in other order places, e.g. when executing the customer’s order with specific instructions,
if its execution is impossible in existing places, etc.
4.3. In cases where there are several suitable places to execute the order regarding financial
instruments, results, which the customer would have having executed his/her order in
each of the order execution places, shall be assessed and compared and the best option for
the customer shall be selected in each specific case.
4.4. The Bank shall not establish and charge a commission in a manner that some order
execution places are discriminated against.
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4.5. The orders regarding financial instruments which are traded on the regulated markets or
on the MTF shall be executed by the Bank in the specified trading places. However, there
may be situations when the order cannot be executed therein, then the Bank shall execute
the order beyond the regulated marker and the MTF.
4.6. The orders regarding financial instruments which are not traded on the regulated markets
or on the MTF and the participant of which the Bank is shall be usually transferred to other
financial brokerage firms.
4.7. The orders regarding investment funds’ units are executed in compliance with the order
set in the Annex 1 or directly through the managers of such investment funds.
4.8. The orders regarding debt securities are executed in compliance with the order set in the
Annex 1 or selecting such order execution place where the best result for the customer can
be achieved due to liquidity.
V. TRASFER AND CONNECTION OF ORDERS
5.1. In cases where the Bank cannot act directly as an agent due to financial instruments
specified in the customer’s order, it shall transfer the execution of the customer’s order to
another agent selected by the Bank that has the right to provide investment services.
5.2. The Bank shall be able to accept customers’ orders in cases where financial instruments
are kept in another financial brokerage firm, though the customer shall be responsible for
the provision of required orders and instructions on the proper transaction execution to
that brokerage firm.
5.3. The Bank shall not execute the customer’s order and shall not make the transaction on its
own account if the order being executed or the transaction being made is connected with
the order of another customer, except for cases where the connection of orders and
transactions has no negative impact on interests of any customer whose order is to be
connected and every customer whose order is to be connected is informed that the
connection may have a negative impact for him/her due to a specific order.
5.4. If the Bank connects orders of multiple customers or connects its investment decision with
the customer’s order and the joint order is executed partially, the Bank shall distribute
related transactions in accordance with the following procedure:
5.4.1. if the Bank connects its investment decision with the customer’s order and the joint
order is executed partially, the Bank shall distribute related transactions in a
manner which is favourable to the customer, i.e. the customer’s order shall be
executed first, while the remaining part of the transaction shall be executed by the
Bank on its own account;
5.4.2. if orders are received from multiple customers regarding the same transaction with
the same financial instrument, though at different prices and the orders were
executed by connecting them without exceeding the best price limit specified in
the connected orders, the priority shall be given not to the price, but to time of the
order placement;
5.4.3. when participating in the initial distribution of financial instruments, the amount of
financial instruments allocated to the Bank shall be distributed in proportion to all
placed orders (orders placed both by customers and on behalf of the Bank), except
for cases where organizers of the initial public distribution of financial instruments
establish specific instructions for the distribution (allocation) of financial
instruments;
5.4.4. if, when participating in the initial distribution of securities, a very small amount of
financial instruments is purchased and potentially resulting costs of customers
associated with the purchase of financial instruments or their subsequent sale are
inadequately high, then the Bank shall have the right to let customers refuse to
purchase the amount of financial instruments belonging to them if other customers
are willing to receive them additionally. In this case, financial instruments shall be
distributed in proportion to customers willing to purchase an additional amount of
financial instruments;
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5.4.5. if the connected order was executed through other agents and at different prices,
then, when distributing transactions, the price of a financial instrument shall be the
weighted average price of purchasing or selling the financial instrument at which
the connected order was executed.
5.5. The customer’s order can be executed in tranches, i.e. order can be divided into several
orders at Bank’s discretion to limit potential negative impact of market price fluctuation
to the customer.
VI. WARNINGS AND CONSENTS
6.1. The Bank shall inform that the customer’s orders may be executed outside the regulated
market or the MTF. The customer, in line with this Procedure, agrees that his/her orders
are executed outside the regulated market or the multilateral trading facility.
6.2. If the customer provides a specific instruction to the Bank, such an instruction of the
customer shall be executed precisely, without deviating from conditions presented in the
order. However, the Bank shall warn the customer that any specific instruction of the
customer may prevent the Bank from taking actions established and applied by it in this
Procedure to achieve the best result for the customer.
6.3. If, due to actions of the payment or market operator, transactions, which have already
been approved by the Bank for the customer and executed on the market, are suspended,
modified or cancelled, the customer shall agree with such actions of the corresponding
institutions.
6.4. By signing the Agreement on Provision of Investment Services and delegating the Bank to
enter into transaction, the customer agrees with this Procedure.
VII. FINAL PART
7.1. The Bank shall continuously monitor the effectiveness of this Procedure and whether or not
the execution of orders by undertakings provided for in it is high-quality, and, having
identified shortcomings, - shall correct them immediately. The Procedure shall be revised
in the event of an essential change affecting the Bank’s ability to continuously achieve the
best result for the customer using trading places provided for in the Procedure, but no less
than once a year. The Procedure and amendments to it are published on the Bank's website
at www.sb.lt. Customers are also informed about amendments to the Procedure in the
online banking system.
7.2. The Procedure shall be approved or amended by the resolution of the Management Board
of the Bank.
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Order execution place
AB NASDAQ OMX Vilnius
AB NASDAQ OMX Riga
AB NASDAQ OMX Tallin
BLOOMBERG system
Raiffeisen Bank
International AG
AB SEB bankas
AB DNB bankas
ANNEX 1
ORDER EXECUTION PLACES
Financial instruments whose purchase/sale orders are being
executed
Shares of Lithuanian companies
(Government and corporate) debt securities of Lithuanian issuers
Shares of Latvian companies
(Government and corporate) debt securities of Latvian issuers
Shares of Estonian companies
(Government and corporate) debt securities of Estonian issuers
Government and corporate debt securities
Selecting an agent declaring the best price whom the transaction
is feasible with and who complies with the condition of the
sufficient amount of financial instruments
Government and corporate debt securities, equity securities
listed by exchanges of other countries, investment fund units.
Government and corporate debt securities, equity securities
listed by exchanges of other countries, investment fund units.
Government and corporate debt securities, equity securities
listed by exchanges of other countries
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