Order Handling and Best Execution Policy

1. Introduction

1.1. General

The Order Handling and Best Execution Policy (the Policy) is developed in accordance with the requirements of the Applicable Law.

The Company will review and monitor on at least an annual basis the effectiveness of this Policy to:

• identify and implement any required amendments to this Policy;
• ensure the Policy is fit for purpose; and
• ensure the Policy reflects any changes to the Applicable Law.

The most up-to-date version of this Policy is available on the Company website.

The Company shall notify Clients of material changes to this Policy by providing a 14 calendar days’ notice to the Client’s email address.

This Policy applies to the following Investment Services (the Services):

• execution of orders on behalf of Clients; and
• reception and transmission of Client orders.

This Policy applies to provision of Services to Professional Clients or Retail Clients (Clients). Clients should have received formal notification from the Company on their Client classification.

This Policy applies to the following financial instruments (Instruments):

• Cash equities;
• Bonds;
• OTC derivatives;
• Exchange-traded derivatives.

1.2. Scope and purpose

This Policy is developed with the purpose of outlining how the Company achieves Best Execution for its Clients when buying or selling Instruments on their behalf.

In providing Services, whether or not the Company has a regulatory obligation to provide Best Execution, the Company shall act honestly, fairly, and professionally in accordance with the best interests of its Clients.

1.3. Client consent and responsibility

When Clients place orders with the Company, they agree to the terms of this Policy and the Company’s Terms of Service. Client consent shall be expressly achieved through the Client Agreement.

Where applicable, the Company’s duty to provide Best Execution to the Client in accordance with regulatory obligations does not imply that the Company owes the Client any fiduciary responsibilities over and above the specific regulatory obligations placed upon it or as may be otherwise contracted between the Company and the Client.

The Client remains responsible for their Investment decisions and the Company will not be responsible for any market trading loss the Client may suffer as a result of those decisions.

Clients may address all questions related to this Policy by contacting the Company:

Email: [email protected]

Mail: 55/22 Mangilik El avenue, Office 148, Esil District Z05T3F5 Astana, Kazakhstan

1.4. Definitions and Meanings

“Applicable Law” means the relevant AIFC Rules and Regulations, the Kazakh national legislation and international legislation and standards, that are applicable to the Company’s business.

“Best Execution” is the requirement to take all sufficient steps to obtain the best possible result when executing Clients’ orders or when transmitting their orders to other entities for execution. To do this, the Company takes into account a range of execution factors and determines their relative importance based on the Clients’ classification, the types of Instruments and the markets in which the Company operates.

“Execution of orders on behalf of Clients” means that the Company acts to conclude agreements to buy or sell Instruments on behalf of Clients.

“Reception and transmission of Client orders” means that the Company receives Client’s order and passes it on to a broker for execution or onward transmission for execution. This can, for example, be the case when the Company is not a member of the trading venue where the Instruments that the Client is willing to buy or sell are admitted to trading.

For the purposes of this Policy, execution of orders on behalf of Clients includes the reception and transmission of Client orders, unless stated otherwise.

“Cash equities” include equities, warrants, depositary receipts, equity CFD’s.

“Bonds” include corporate and government bonds, convertible and exchangeable bonds, asset backed securities, certificates of deposit, structured debt securities.

“OTC derivatives” include OTC options, OTC forward transactions, OTC swaps.

“Exchange-traded derivatives” include exchange-traded futures, and options contracts and exchange -traded contracts for differences.

“Market Hours” mean hours when the trading venues of Instruments made available via the Raison App are open. For US Instruments, this is 9:30 am to 4 pm Eastern Standard Time.

2. Best execution

2.1. Execution factors

As part of taking all sufficient steps to obtain the best execution for the Client, the Company shall consider the following Execution Factors and their relative importance:

• price of an Instrument;
• costs, including implicit costs (e.g., possible market impact), explicit external costs (e.g., 
exchange or clearing fees);
• speed of execution;
• likelihood of execution and settlement;
• size of the order executed for a Client, accounting for how this affects the price of 
execution;
• nature of the Transaction; and
• any other consideration relevant to the execution of the Transaction, given that particular 
characteristics of a Client Transaction can affect how execution is performed and what is the impact on the market.

Generally, price will be the most important execution factor for the Clients. However, the primary execution factors may vary in more illiquid markets. Under such circumstances, the likelihood of execution will become increasingly important.

2.2. Relative importance of execution factors

Our provision of Best Execution for Retail Clients and Professional Clients will be determined primarily in terms of a total consideration, which is the sum of the price of the relevant Instrument and execution costs (such as execution venue fees, clearing and settlement fees and any other fees paid to third parties involved in the execution of the order).

For Retail Clients other factors may be given precedence over the immediate price and cost consideration only insofar as they are instrumental in delivering the best possible result to the Retail Client.

2.3. Specific instructions

When the Company receives specific instructions from a Client as to how the order (or a particular aspect of the order) should be executed (Specific Instruction), the order will be executed in accordance with these instructions.

Specific Instructions include instructions to execute an order on a particular venue, at a particular time or at a particular price.

When the Company executes an order (or the relevant aspect of the order) in accordance with Specific Instructions, the Company shall be deemed as having met its best execution obligation to that aspect of the order covered by those instructions.

Where the Client provides Specific Instructions only to a particular aspect of the order, the Company shall follow this Policy to those aspects of the order that are not covered by those instructions. Specific Instructions may prevent the Company from following the steps of this Policy designed to obtain the best possible result for the Client in respect of the elements covered by those Specific Instructions.

2.4. Execution methods

The Company executes Client orders via the Raison App mobile application (Raison App). The Company executes Client order by one of the following methods or a combination of methods:

• Direct execution: 
The Company may execute orders directly on one or several trading venues of which it is a member or participant.
• Internalisation: 
The Company may execute orders internally when it is determined that the Company is the appropriate execution venue, and, taking into account potential conflicts of interest, such internalisation is in the best interest of the Clients.
• Indirect execution: 
In case when the Company is not a member or participant of the trading venue where the Instruments are traded, the Company shall use the services of a broker(s) with whom the Company has entered into an agreement for handling Client orders for that particular trading venue (Broker(s)). The Broker may in turn transmit the order to another broker. It is also possible for the Broker to execute the Transaction outside of a trading venue.

The Company will only use a connected party to execute a Client order if the Company determines that it is in the best interests of the Client to do so and that any conflicts of interest that may arise are prevented or managed appropriately.

In the event of disturbances in the venues, Brokers or in the Company’s own systems, e.g., due to power outages or otherwise deficient access to technical systems, it may be impossible or inappropriate to execute orders in any of the ways stated in this Policy. The Company will thereupon undertake all reasonable measures in order to otherwise achieve the best possible result for the Client.

2.5. Riskless principal and agency execution

Riskless principal execution is where the Company receives an order from a Client and executes that order with the market on a back-to-back principal basis, such that the Company is a counterparty to both the Client and the market, but the Company is never exposed to the market risk throughout the execution of the Transaction. Both sides are executed simultaneously, and the Transaction is concluded at a price where the Company makes no profit (or incurs loss), other than a previously disclosed commission, fee or charge for the Transaction.

Agency execution is where the Company receives an order from a Client and directly executes that order with the market for and on behalf of the Client (without being a counterparty to the Transaction).

2.6. Execution Venues

To achieve the best possible result for the Client, the Company may execute orders on one or more of the following venues (Execution Venue):

• Regulated Markets;
• Multilateral Trading Facilities (“MTFs”) that are not Regulated Markets;
• Systematic Internalisers (“SIs”);
• Market makers;
• other liquidity providers.

The Company selects Execution Venues which enable it to provide Best Execution to Clients on a continuous basis, taking the execution factors and other relevant factors into account. The quality of Execution Venues is assessed by the aggregated value achieved by these factors. Below is a list of important factors and this list should be regarded as an example of the most important factors, and the quality aspect should, over time, not be restricted to this list.

The most important factors are the venue’s market share, likelihood of execution and settlement, cost of execution (covering both implicit and explicit costs), order transmission speed (latency) to the venue, and venue features. Market coverage in multiple listed instruments is important, but the addition of a new venue must be considered in respect of possible enhancement of the quality of execution.

The Company reviews Execution Venues at least annually and assesses the execution quality obtained.

2.7. Review of Brokers

When selecting a Broker, the Company evaluates whether it can deliver the best possible result for its Clients. In this evaluation, the Company considers whether the Broker is subject to Best Execution requirements or whether the Broker will undertake to comply with the Best Execution requirements, and whether the Broker can demonstrate that it delivers a high level of execution quality for the kind of orders that the Company places with or transmits to the Broker.

The Company continuously monitors the quality of execution by the Broker, taking into account the execution factors stipulated in section 2.1. These execution factors may be weighted differently due to market conditions, such as a lack of liquidity being available.

The Company also conducts annual review of the market landscape to determine whether alternative brokers could be selected to replace the existing Broker. These reviews may also be conducted on an ad-hoc basis should a material change occur that affects the Company’s ability to continue to obtain the Best Execution for Clients using the services of the Broker.

The Company shall consider the following additional factors when reviewing alternative brokers:

• whether the broker is authorised and regulated appropriately;
• whether the broker has an established and adequate order handling and best execution 
policy;
• whether the commissions and other charges applied to Client orders will be reasonable;
• whether the broker has the capability to execute, administer and settle efficiently orders 
in the range of Instruments envisaged for dealing with that broker;
• whether any conflicts of interest may arise where a member of Personnel has personal 
relationship with someone working at the broker;
• whether other services sought from the broker in conjunction with order execution (such as custody) are likely to be delivered efficiently, cost-effectively and without exposing the Client to unreasonable risks;
• published metrics of the broker.

The Company also monitors the trades in that prices are checked on a random sample basis after the trade details are received from the Broker to ensure the trade was within the appropriate price range.

Personnel must not place orders with a broker that has not been approved unless there are exceptional circumstances. Any execution of a Transaction with an Execution Venue or placing of an order with a broker that falls outside the approved list must be pre-approved by a member of Senior Management.

3. General terms

3.1. Order management and handling

The Company has implemented procedures and arrangements which provide for the prompt, fair and expeditious execution of orders. Orders placed via Raison App are sent for execution immediately unless they require manual handling due to the nature or size of the order. If an order is sent by a single Client, the order is executed in the normal manner in accordance with Best Execution and allocated to the Client.

When placing an order, the Company will provide the Client with the indicative prices of the relevant Instruments that the Client can buy or sell via the Raison App. These prices are provided by a third party, and the Company has no control over them. At the time an order is later executed, the price of the relevant Instrument may have changed but the Company shall continue to execute the order regardless of such changes. The Company shall not be liable to any Client for losses suffered as a consequence of changes in price when an order is submitted by that Client outside of Market Hours.

The Client can only cancel an order with the Company before it is communicated to the trading venue or the Broker. This means it is important to ensure that the Client enters the details of the order correctly and that the Client is willing and able to enter into a binding commitment to buy or sell an Instrument when the Client submits the order.

When the Company executes an order on behalf of a Client, the Company will ensure that the following general principles are applied:

• that the execution of the order is promptly and accurately recorded and allocated;
• where the Company receives comparable orders, the Company will carry these out 
sequentially and promptly unless the characteristics of the order or prevailing market 
conditions make this impractical, or the interests of the Client require otherwise;
• the Company will inform Retail Clients about any material difficulty relevant to the proper 
carrying out of orders promptly upon becoming aware of the difficulty. The Company will 
similarly inform Professional Clients on a best efforts basis;
• where the Company is responsible for overseeing or arranging the settlement of an 
executed order, the Company shall take all reasonable steps to ensure that any Client Instruments or Client funds received in settlement of that executed order are promptly and correctly delivered to the account of the appropriate Client; and
• information in respect of pending Client orders will be treated as confidential, to the extent permissible by law, and the Company will take all reasonable steps to prevent the misuse of such information.

3.2. Dealing errors

Dealing errors can occur from time to time and, in such an event, it is critical that Personnel:

• identify the error as soon as possible;
• rectify the error; and
• take such measures as may reduce the possibility of such an error occurring again the future.

In the event that a dealing error occurs this must be immediately reported to the Compliance Officer. Full details of the error must be recorded on a Dealing Error Form and maintained by the Company. The Company collates information on dealing with errors to identify:

• errors that need reporting to the Client(s);
• systematic weaknesses that could result in loss to the Company or its Client(s);
• cost of errors for capital planning purposes.

In any event, it is the Company’s policy that it must not benefit from any such dealing errors. In the event that a Client suffers a loss, this will be absorbed by the Company and any gain will accrue to the Client.

3.3. Fair allocation

The Company’s allocation procedure is prompt, efficient and fair.

The procedure is as follows:

• promptly allocate the Instrument concerned;
• allocate the Instrument in accordance with the stated intention;
• ensure the allocation is done fairly and uniformly by not giving undue preference to itself 
or to any of those for whom it dealt;
• where possible, the Instruments will be allocated on a pro-rata basis;
• if a pro-rata allocation is not possible, the Company will allocate the Instrument as fairly as 
possible (in terms of volume and average price obtained) bearing in mind the relative sizes of the original orders and the size of bargain done (1).

3.4. Aggregation

The Company will not carry out a Client order or a Transaction for its own account in aggregation with another Client order or any transactions for its own account, unless the following conditions are met:

• it is unlikely that the aggregation of orders and Transactions will work overall to the disadvantage or detriment of any Client whose order is to be aggregated;
• the Company will disclose to each Client whose order is to be aggregated that the effect of aggregation may work to their disadvantage in relation to the particular order (2);
• the Company made a record of the intended basis of allocation and the identity of each Client before the order is effected; and
• aggregated orders and Transactions are fairly allocated.

(1) For example, it may well be that two funds are buying the same stock; one fund wishes to buy a large amount, the other a small amount (this may depend on the relative sizes of each fund or perhaps because of the different timing of inflows into each fund). If a small amount of stock is bought initially, it makes sense to allocate this to the small order if this stock cannot be warehoused.

(2) If a review of the Client Agreement is being carried out, wording to such effect should be included or checked to ensure that it is provided for in existing Client Agreements.

3.5. Post trade arrangements

When the Company executes a Transaction in an Investment for a Client, it must provide a confirmation note to the Client as soon as possible and in any case no later than 2 business days following the date of execution of the Transaction.

The trade confirmation note must include the details of the Transaction and the following general information:

1. the Company’s name and address;
2. whether the Company executed the Transaction as principal or agent;
3. the Client’s name, account number or other identifier;
4. a description of the Investment or Fund, including the amount invested or number of 
units involved;
5. whether the Transaction is a sale or purchase;
6. the price or Unit price at which the Transaction was executed;
7. if applicable, a statement that the Transaction was executed on an execution-only basis;
8. the date and time of the Transaction;
9. the total amount payable and the date on which it is due;
10. the amount of the Company charges in connection with the Transaction, including 
commission charges and the amount of any mark-up or mark-down, fees, taxes or duties;
11. the amount or basis of any charges shared with another Person or statement that this will 
be made available on request; and
12. for Collective Investment Funds, a statement that the price at which the Transaction has 
been executed is on a historic price or forward price basis, as the case may be.

The Company may combine items in (6) and (10) above in respect of a Transaction where the Client has requested a note showing a single price combining both of these items.

In relation to Transactions in derivatives, the Company must include the following additional information:

• the maturity, delivery, or expiry date of the derivative;
• in the case of an option, the date of exercise or a reference to the last exercise date;
• whether the exercise creates a sale or purchase in the underlying asset;
• the strike price of the option; and
• if the Transaction closes out an open futures position, all essential details required in respect of each contract comprised in the open position and each contract by which it was closed out and the profit or loss to the Client arising out of closing out that position (a difference account).

The Company may agree with a Professional Client or Market Counterparty to provide reporting on Transactions differently.

3.6. Execution Costs

When providing Services, the Company may charge the Client a fee, commission, mark up or a spread in the execution price.

3.7. Inducements

The Company shall not structure or charge its commissions in such a way as to discriminate unfairly between the Broker(s). The Company shall not receive any third-party payments that do not comply with the Applicable Law and shall inform Clients about the inducements that the Company may receive from Execution Venues in accordance with the Applicable Law.

In cases where the Company applies different fees depending on the Broker selected, the Company will explain these differences to the Clients in sufficient detail to allow the Clients to understand the advantages and disadvantages of the choice of a particular Broker.

3.8. Records

Dealing records are maintained and reviewed monthly.