JPモルガン証券株式会社

Best Execution Policy

This Best Execution Policy stipulates practices to be followed in order to execute transactions with the best terms and conditions for customers, in accordance with Article 40-2 (1) of the Financial Instruments and Exchange Act.
When accepting an order from a customer for the trading of securities listed on a financial instrument exchange market, JPMorgan Securities Japan Co., Ltd. (hereinafter, the “Company”) shall strive to follow the following practices.

1.    Applicable Securities
This Policy shall apply to share certificates, convertible corporate bonds with warrants, and other securities listed on the financial instrument markets, which fall under the definition of "Listed Share Certificates" in Article 16-6 of the Enforcement Ordinance of the Financial Instruments and Exchange Act (hereinafter, collectively "listed share certificates").
The Company does not deal in "tradable securities" as defined in Article 67-18 (iv) of the Financial Instruments and Exchange Act, including stocks and convertible corporate bonds with warrants in the "Phoenix" issue system.

2.    Practices to Carry Out Transactions with Best Terms and Conditions

(1)    Transactions of Listed Share Certificates on the Market
Unless specific instructions are given by a customer for the execution of an order, the Company shall place the order received from the customer, as an agency order, on the financial instrument exchange market on which the ordered securities are listed. For an agency order placed by a customer before or after the session hours of the financial instrument exchange market, the Company shall place the order for the customer during the session when trading has resumed on such financial instrument exchange market.
Unless execution on a specific financial instrument exchange market is designated by the customer, an agency order placed by the customer shall be placed as follows:
(a)    If the relevant securities are listed on only one financial instrument exchange market (hereinafter, "single listing"), the Company shall place the order on such financial instrument exchange market on behalf of the customer.

(b)    If the relevant securities are listed on more than one financial instrument exchange market (hereinafter, "multiple listing"), the Company shall place the order on behalf of the customer on the financial instrument exchange market that Bloomberg L.P. chooses as the major market for those securities. If requested by a customer, the Company shall inform the customer on which financial instrument exchange market the order will be placed. However, considering the latest market conditions (price, possibility of deal conclusion, and other factors) at the time of the execution, if the Company determines that it is more advantageous for the customer to execute the order on a different financial instrument exchange market, the Company shall place the order on such different financial instrument exchange market on behalf of the customer. If requested by a customer, the Company shall inform the customer of the reason for the selection of the market and other related information.

(c)    If the Company is not a participant or member of the financial instrument exchange market selected in (a) or (b) above, the Company shall place the customer's order on such financial instrument exchange market via a party with whom the Company has a contract for the brokerage of orders to such financial instrument exchange market.

(2)    Off-market Trading of Listed Share Certificates
Notwithstanding (1) above, for a customer with whom the Company has a prior agreement on how the customer's orders are executed, considering the specific transactional needs of the customer, if the Company determines that it is more advantageous for the customer to execute the order by any method that is within such prior agreement with the customer other than trading on financial instrument exchange markets, the Company may choose such alternative method of execution.

3.    Reason for Choosing Transaction Methods

(1)    Transactions of Listed Share Certificates on the Market
Trades on financial instrument exchange markets have higher liquidity, a higher possibility of a trade being executed and higher speed of trade execution as investors are concentrated in such markets. Accordingly, trading on financial instrument exchange markets is generally regarded as most reasonable for customers. If securities are traded on more than one financial instrument exchange market, it is regarded as most reasonable for customers to place an order on the most liquid market.
(2)    Off-market Trading of Listed Share Certificates
If trading on financial instrument exchange markets does not necessarily match the needs of a customer, considering their liquidity, the possibility of conclusion of deals and transaction speed, the Company may determine that it is most reasonable for the customer to execute a transaction outside financial instrument exchanges by another method agreed with the customer in advance.

4.    Others

(1)    In any of the following cases, regardless of the methods stipulated in 2.(1), above, the order shall be executed by the method specified for each of the following cases:

(a)    The customer has given a specific instruction on the execution of an order
Such method instructed (such as designation of the direct counterparty of the Company in the transaction, the trading time or the financial instrument exchange market/PTS (Proprietary Trading System) or a request for using the Company's Smart Order Routing System)

(b)    Execution under a discretionary investment contract or similar arrangement permitted by law
The method the Company chooses from within the scope entrusted by the customer under such contract

(c)    Trading of fractional or odd shares
Direct transaction with the Company; or the Company places an order on behalf of the customer to a trader that deals in trading of fractional or odd shares

(2)    In the event of a failure of the trading system or any other unavoidable reason, the Company may use a different execution method that is not chosen based on the Best Execution Policy. In such event, the Company shall strive to execute the order with the best terms and conditions.

The best execution obligation is an obligation to execute an order by considering various factors comprehensively, including cost, speed, and certainty of execution, not only the price of the deal. Accordingly, even if the Company chose a method based on the price of the deal only, and subsequently it is found the method chosen by the Company was not the best choice, this shall not necessarily constitute a breach of the best execution obligation.
 

 

Copyright © 2019 JPMorgan Chase & Co. All rights reserved.