Principles for the execution of investment decisions within the framework of Asset Management

 

A.             General information

1.              Scope

The following principles apply to the execution of investment decisions made by the Asset Manager in accordance with the Asset Management Agreement and within the framework of the investment guidelines laid down in that Agreement for the purpose of the purchase or sale of securities or other financial instruments (dispositions).

The Asset Manager does not execute the investment decision directly; instead, third parties are commissioned to execute investment decisions.

2.              No application of the principles to investment funds

Where the investment decision extends to the purchase or sale of units in investment funds whose issue or redemption is effected via a custodian bank, the present principles do not apply. The Asset Manager shall, in principle, purchase or sell units in investment funds in accordance with the Luxembourg Law on Open-Ended Investment Funds of 17 December 2010. Investment decisions concerning exchange traded funds (ETFs) shall be executed in accordance with the principles of the respective custodian bank.

3.              Priority of instructions

The client may give instructions to the Asset Manager regarding the execution venues at which the Asset Manager’s investment decisions are to be executed. These instructions shall in any case take precedence over these execution principles.

 

Note:
The client acknowledges that in this case the best execution obligation does not apply and that the securities orders may not be executed on a best execution basis.

4.              Client selection of a custodian bank

The client (hereinafter “Client”) has instructed the Asset Manager to entrust certain entities with the execution of the Asset Manager’s investment decisions. If the Client provides the Asset Manager with the account details of only one custodian bank, this shall be understood to be an instruction to process the investment decisions via this institution. These instructions shall in any case take precedence over these execution principles.

 

Note:
If the Client has issued an instruction, the Asset Manager will not commission third parties or select them in accordance with these principles.

 

B.             Execution of the investment decision by third parties (“Selection Policy”)

The Asset Manager shall adopt arrangements to achieve the best possible result for the Client. The selection of a third party to be entrusted with the execution of investment decisions of the Asset Manager shall be made taking into account the following criteria:

1.              Objective of the execution of investment decisions

Investment decisions can, as a rule, be executed via different execution channels (floor trading, electronic trading) or at different execution venues (stock exchange, other trading venues, domestic or foreign). These principles describe possible execution channels and execution venues for the relevant types of financial instruments that can be consistently expected to provide best execution in the interests of the Client and that the Asset Manager will take into account when selecting the third party to execute the investment decision.

2.              Criteria for the selection of execution venues

When selecting execution entities, Baumann & Partners will ensure that these entities maintain a best execution policy that is customary in the market and includes the following criteria, as appropriate:

• Creditworthiness of the executing entity
• Best possible overall price (execution price, costs and fees) for the Client
• Security during settlement and custody
• Speed and completeness in execution and settlement

 

Note:
These principles do not apply if the Asset Management relates to investment fund units, as the issue and redemption of the units is carried out via the respective custodian bank. Nor is it possible to issue derogating instructions.

3.              The 5 most important executing entities

The following custodian banks are the five most important executing entities of Baumann & Partners for the execution of orders in financial instruments:

• V-Bank
• Banque de Caisse d’Espargne de l’Etat Luxembourg (BCEE)
• DAB
• DZ Privatbank
• UBS Switzerland

 

4.              Derogation in individual cases

Baumann & Partners regularly works with a number of banks or depositaries and has reviewed their execution policies. In the event that investment decisions are to be executed by entities other than the above-listed entities in individual cases, the review of the above selection criteria shall be carried out by the Asset Manager in advance.

If an institution is designated on the basis of instructions from the Client within the meaning of Section A No. 3, this shall be deemed to be the Client’s consent to have the investment decision executed by this institution.

5.              Application of the execution policy of the mandated third party

As the Asset Manager entrusts a third party with the execution of investment decisions, the respective disposition is made in accordance with the arrangements made by the entrusted third party to achieve best execution. In this respect, there may be derogations from the above principles with respect to execution venues and execution channels.

6.              Execution principles for individual types of financial instruments

The best execution policies of the individual custodian banks, which are made available to Clients when they open a custody account, apply to the selection of possible execution channels for individual order groups.

7.              Changes to the principles regarding the execution of contracts and the selection of executing entities

This “Best Execution Policy” is reviewed at least once a year. The Client shall be notified of any material changes without delay.