Best Execution Policy

Information on Best Execution Policy for Retail and Professional Clients

1. Introduction

This document sets out the Best Execution Policy, as required by the Markets in Financial Instruments Directive 2014/65/EC (“MiFID II”) for Mizuho Trust and Banking (Luxembourg) S.A. (hereafter ”MHTBL” or the “Bank”) having its registered address at 1B, rue Gabriel Lippmann - L-5365 Munsbach, Grand Duchy of Luxembourg.

MiFID II requires MHTBL to take sufficient steps to obtain the best possible result for its clients (henceforth referred to as “client” or “you”), taking into account price, costs, speed, likelihood of execution and settlement, size, nature and/or any other relevant order execution consideration, whether we are executing orders on behalf of clients or placing orders with, or passing orders to, others for execution (the “Best Execution”).

When executing client orders MHTBL will take into account the following criteria to determine the relative importance of the factors referred to above:

a) the characteristics of the client including the regulatory classification;

b) the characteristics of the client order;

c) the characteristics of financial instruments that are the subject of that order; and

d) the characteristics of the entities with which the orders are placed (hereafter ‘execution entities’) to which that order can be directed.

2. SCOPE

This Best Execution Policy applies only to clients classified by MHTBL as Retail or Professional Clients and only to clients dealing in Financial Instruments (as defined under MiFID II or its implementing measures). Best Execution is owed when MHTBL accepts an order to execute a transaction on your behalf, or in other circumstances where it has otherwise expressly agreed to accept such Best Execution obligation.

Considering the activities of the Bank, Best Execution applies only in the framework of the administration of the Corporate Actions (hereafter “CA”) as per the Commission Delegated Regulation (EU) 2017/590 (“RTS 22”) or any other binding text amending or modifying or repealing such RTS 22, stating in its article 2 that investment firms have to consider “the conclusion of an acquisition or disposal of a financial instrument” as a transaction.

Accordingly, MHTBL has identified two situations for which the Best Execution applies:
1. Voluntary CA for which you have the possibility to take decision(s) in the execution (or not) of one or several options given by the issuer of the CA resulting in the execution of a transaction in a financial instrument. In case you have taken a decision to invest, as per the terms and conditions of the CA, upon receipt of your order, MHTBL will accordingly instruct its appointed local sub-custodian, as per the location of the financial instrument in question.
2. Corporate Action events for which MHTBL will sell fractional shares. In this case the transaction will be executed with a broker, on behalf of the client.

3. BEST EXECUTION OBLIGATION AND RELEVANT FACTORS

As set out above when executing orders on your behalf in relation to Financial Instruments, MHTBL will take all reasonable steps to achieve Best Execution. MHTBL has in place a policy and processes which are designed to obtain the best possible execution result on a consistent basis, subject to and taking into account the Financial Instrument subject to the nature of your orders, the execution entities available (on reasonable commercial terms) for such Financial Instrument and the priorities you place upon MHTBL executing those orders. The policy and processes provide, in MHTBL’s view, the best balance across a range of sometimes conflicting factors.

MHTBL will take into consideration a range of different factors when determining how to obtain the best possible result for orders executed on your behalf, including:

§ Best price

§ Transaction cost

§ Speed of execution

§ Likelihood of execution

4. EXECUTION ENTITIES

This Best Execution Policy includes, for the activities in scope as describes in section 2 above, those entities that we consider, enable us to obtain on a consistent basis Best Execution. These entities are listed in the following document: List of Execution entities – Appendices 1 and 2.

Those possible execution entities include,

1. the appointed sub-custodians for the execution of your investment decisions in financial instruments

2. the appointed brokers for the execution of the sale of fractional shares.

For CA requiring an investment decision from you, MHTBL executes your transaction through a local sub-custodian selected and assessed as per effective procedures. The selection and assessment of a sub-custodian is a rigorous analysis of the needs and requirements (including among others, asset safety, risk minimisation, quality of service and reporting, systems and communication, level of custody fees, regulatory and compliance controls), request for proposal process, set up of a short list of sub-custodians, the final selection, the approval and the implementation. The performance of each appointed sub-custodian is monitored carefully with all due skill, care and diligence.

After tender offering process, MHTBL received several responses from brokers. Upon internal selection process, MHTBL decided to select two brokers which are able to execute sales of fractional shares according to the following criteria’s:

§ Best price: all trades are performed on trading venue (i.e. regulated market, multilateral trading facilities, organised trading facilities or non-European Entities performing the same activities).

§ Execution cost: all trades are executed according to fee schedule negotiated with the brokers.

§ Speed of execution: all trades are performed within the business day (24 hours) upon receipt of the instruction from MHTBL.

§ Likelihood of execution: selected brokers have committed to execute, settle and deliver all orders according to nature and market defined with MHTBL by contract.

Internal selection analysis is available upon request.

Selection of additional execution entities includes consideration of factors such as liquidity and price offered, credit and settlement risk, realized performance (latency, liquidity, price improvement, fill rates, pricing analysis), commercial positioning, market mechanism, resilience and reliability. MHTBL will, on request, provide further details to you of the execution entities included in our Best Execution Policy.

MHTBL may also transmit your order for execution to another broker or dealer (which may be located outside of the European Economic Area (“EEA”) and could include both affiliate entities and/or third party brokers), in which case we will either determine the ultimate execution entity ourselves on the basis described above, and instruct the other broker or dealer accordingly, or we will satisfy ourselves that the other broker or dealer has arrangements in place to enable us to comply with our Best Execution obligations to you.

MHTBL will also take steps to not structure or charge MHTBL’s commissions in such a way as to discriminate unfairly between execution entities.

For certain financial instruments and/or when executing as principal, MHTBL may determine that it can comply with its Best Execution obligation by solely using MHTBL and its affiliates.

5. SPECIFIC INSTRUCTIONS

Specific instructions include specifying the characteristics of a bespoke product, either relating to an order or a particular aspect of an order. Considering the scope of the Best Execution Policy, as defined in section 2 above, MHTBL will not accept any specific instruction from clients which could prevent MHTBL applying its Best Execution Policy principles.

In the absence of express instructions from you, MHTBL will exercise its own discretion, having regard for the terms of your order in determining the factors that it needs to take into account for the purpose of providing you with Best Execution.

6. Client order handling rules

In respect of client order handling rules for the transactions indicated in section 2 above, MHTBL will apply the principle of treating transactions by order of receipt i.e. first order received, first handled.

MHTBL will ensure that all orders, related to processing of voluntary corporate actions and sales of fractional shares, are in line with the Best Execution principle defined in this Best Execution Policy. In order to do this, the Bank has identified key tasks and responsibilities which are allocated as follows:

Tasks
Responsible
Identification of orders received
Corporate Actions Department
Controls of the order (signature/component)
Corporate Actions Department
Booking of the order
Corporate Actions Department
Validation of the order booked
Corporate Actions Department
Control on completeness and accuracy – all orders are booked (end of day)
Corporate Actions Department
Control on execution – all booked orders are executed (end of day)
Corporate Actions Department
Booking of the execution
Corporate Actions Department
Validation of the execution booked
Corporate Actions Department

7. Record- keeping

MHTBL ensures that appropriate records are kept sufficient to satisfy both MHTBL’s obligations to its regulators and also (in the case of the best execution obligation set out in section 2 above only), to demonstrate to its clients, if they so request, that MHTBL has executed orders in accordance with this Best Execution Policy.

The record keeping obligations of MHTBL are, but not limited to:

§ MHTBL keeps records for a minimum of five (5) years in a durable medium, accessible in a timely fashion and maintains a full audit trail of all corrections and other amendments, and a risk based process to minimize the possibility of manipulation or alteration.

§ The Best Execution Policy agreed by the client is stored for the length of our relationship plus five (5) years.

§ Client instructions are stored in a durable medium. Where client’s instructions are given verbally, it is the responsibility of the bank receiving the instruction to record it electronically or to store it in a durable medium.

§ Where the client gives us specific instructions that override some or all of the policy, these are stored in a durable medium and any warning given to the client must be recorded.

§ For orders which are otherwise subject to Best Execution which are not executed in accordance with MHTBL Best Execution Policy (e.g. for an exceptional reason such as the temporary unavailability of an execution entity), a record is kept to the effect that the order was not executed according to our Best Execution Policy.

8. MONITORING AND REVIEW

MHTBL will monitor the effectiveness of its execution arrangements and the Best Execution Policy and assess on a regular basis whether the execution entities it has selected provide for the best possible result for orders it executes on your behalf.

MHTBL will review this Best Execution Policy, including its appendices, at least annually. MHTBL will also notify you of any material changes to its order execution arrangements or this Best Execution Policy, such notification may be made via the MHTBL website at this link.

If you wish to discuss the application of best execution to your trades with MHTBL, please contact your usual Client Services Department representative.

Mizuho Trust & Banking (Luxembourg) S.A.

Registered address: 1B, rue Gabriel Lippmann - L-5365 Munsbach
Postal address: P.O. Box 29 L-2010 Luxembourg

APPENDIX 1 - LIST OF EXECUTION ENTITIES AS OF 01 MARCH 2024

APPENDIX 2 - LIST OF EXECUTION ENTITIES: LIST OF BROKERS AS OF 01 JANUARY 2018

Country of incorporation of financial instruments Broker name Address Website link
All countries except USA Credit Suisse (Switzerland) Ltd. Uetlibergstrasse 231 (C1)
8045 Zürich
Switzerland https://www.credit-suisse.com/ch/en.html
USA Mizuho Bank Ltd.
New York 1271 Avenue of the Americas
New York, NY 10020,
USA https://www.mizuhogroup.com/securities/what-we-do/markets
https://www.mizuhogroup.com/americas

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