Introduction
This document sets out CI Investment Services Inc (“CIIS”) obligations, factors, order handling and routing practices intended to achieve best execution for client orders. Unless otherwise indicated, this policy applies to all orders entered through CIIS.
Trade Desk Hours of Operation:
Trading in listed securities will be between the hours of 8:30am and 5:00pm EST, Monday through Friday. For the purposes of this section “regular trading hours” refers to 9:30am-4:00pm EST; and “extended hours trading” means trading outside of regular trading hours.
CIIS trading will follow the holiday calendar of the primary Canadian listing marketplace for Canadian orders, and the holiday calendar of the primary U.S. listing marketplace for U.S. orders.
Order Handling
Default Marketplace
For securities listed on the Toronto Stock Exchange, TSX Venture exchange and trading on various other alternative marketplaces, the default marketplace will be the TSX and TSXV. For other securities listed in Canada, the default marketplace will be the exchange on which the security is listed. Please be advised that unless otherwise agreed to by CIIS and the client:
- An order received prior to 9:30am, will book to the pre-opening of the default marketplace for execution at the opening; and
- A limit order received after 4:00pm will be entered to the pre-opening of the default marketplace on the following business day. Market orders are not permitted to queue overnight.
CIIS is a member/subscriber of the following marketplaces and may route orders to any of the marketplaces listed below:
| CSE | TSX |
| CSE2 | TSXV |
| Nasdaq CXC | Neo Lit |
| Nasdaq CX2 | Neo-N |
| Omega | MatchNow |
| Lynx | Nasdaq CXD |
| Alpha | Neo Dark |
Listed derivative trading in Canada is facilitated through the Montreal Exchange.
CIIS may accept client orders outside of regular trading hours on a best-efforts basis. Clients are required to contact the trade desk directly if they wish to place a trade during the pre-market/extended hours sessions between the hours of:
8:30am – 9:30 am
4:00pm – 5:00pm
Clients should consider the following points before engaging in pre-market and extended hours trading:
- Risk of wider spreads
- Risk of lower liquidity
- Risk of higher volatility
- Risk of news announcements
- Risk of Inferior prices
All orders received for listed Canadian securities will be handled as follows:
- Pre-Open: All orders received prior to 9:30am, unless otherwise instructed will book in the preopen of the Default Marketplace.
- Continuous Session: An order received during the regular trading hours of the default marketplace will be handled as follows:
- An immediately tradeable order will be reviewed against all markets and will be routed to the marketplace that will provide the best price and execution.
- A limit order or on-stop order not immediately executable at the time of entry will be entered onto the default marketplace.
- Post-Close: A limit order received after 4:00pm, unless otherwise instructed will book to the pre-opening of the default marketplace on the following business day. Market orders will be rejected as they are not permitted to queue overnight.
CIIS will consider instructions of a client when handling the order, subject to compliance with regulatory requirements. If specific handling instructions are received, CIIS will take these instructions into account when handling the order. If the instructions would cause CIIS to contravene any regulatory obligation the order may be returned for clarification or may be rejected.
Order Types
Market Orders: A market order is an order to buy or sell a security, to be executed upon entry to a marketplace, at the best available price. The order will expire, if not filled in full, on the market where the balance of the order has been booked and will expire at 4:00pm. Market orders of size may impact the marketplace and therefore may be subject to CIIS Trade Desk intervention to ensure market integrity. Intervention may include the imposition of a limit price on the order and/or working the order. To eliminate the risk of your order trading at a price outside an acceptable range, CIIS recommends the use of tradable limit orders rather than market.
Limit Orders: A limit order has a specific minimum sale price or maximum purchase price. If the order cannot be filled in its entirety, then the balance is booked to the default marketplace. The order will expire at 4:00pm if entered as a day order. Marketable limit orders that are above or below the current price may be subject to trade desk intervention. Trade desk action may include the imposition of a new limit price on the order and/or working the order. Orders with clearly erroneous limits may be rejected.
Day Orders: All orders accepted by CIIS default to a day order. A day order is an order that is only valid on and for the business day it is entered. Day orders will only be valid between the hours of 9:30am and 4:00pm EST. The order will expire if not filled in full on the market where the balance of the order has been booked at 4:00pm EST.
Special Terms Orders: CIIS does not accept special terms orders. An example would be an All or None or Minimum Fill Order.
Good Til Orders (GTD): Good ‘Til orders are orders that the client wants to remain open until a specified date. These orders will be entered in the default marketplace if they are not immediately executed in full at the time of entry (after 9:30am EST). The order will remain in the default marketplace until executed or expires, whichever comes first. It is the client’s responsibility to ensure they know what the date of expiry will be and to extend the order if they wish.
On Stop Orders: On stop orders will be entered in the order book of the default marketplace in accordance with CIIS’s policies in effect at the time the order is received. CIIS does not permit on stop orders which are triggered to a market order.
Trading Halts: If a trading halt is announced in a particular security in a particular marketplace, all orders for that security shall remain in that marketplace. Orders will NOT be moved to another marketplace unless requested by the client.
Best Execution
CIIS will diligently pursue the execution of each client order on the most advantageous execution terms reasonably available under the circumstances, this represents our “best execution” obligation.
To meet our “best execution” obligation to you, CIIS may consider a range of factors relevant to the execution of your trade. These include but are not limited to:
- The price
- The speed of execution
- The certainty of execution
- The overall cost of the transaction
When considering the above, CIIS will also take into account the prevailing market conditions and consider such factors as:
- Prices and volumes of the last sale and previous trades
- Direction of the market of the security
- Posted size of the bid and offer
- The size of the spread; and
- Liquidity of the security
CIIS also considers the following sub-factors which include more specific considerations of the broad factors above.
- Considerations taken into account when determining appropriate routing strategies for client orders.
- The considerations for fair pricing of Opening Orders when determining where to enter an Opening Order.
- The considerations when not all marketplaces are open and available for trading.
- How order and trade information from all appropriate Marketplaces, including unprotected marketplaces and Foreign Organized Markets (FORM) is taken into account.
- The factors related to executing client orders on unprotected Marketplaces.
- The factors related to sending client orders to a foreign intermediary for execution.
The Canadian securities marketplace has grown to include several alternative trading systems (ATS’s). Securities can trade on several ATS’s in addition to their primary listing exchange. CIIS uses a third-party smart order router (SOR) to diligently pursue the “best execution” of each client order in the most advantageous terms available under the current market conditions. The SOR employed by CIIS uses a sequential spray methodology in that it sprays all marketplaces at a single price level and then repeats the sprays iteratively under the order can no longer be actively traded. The balance of the client order is then booked onto the default marketplace as defined above. CIIS’s SOR is reviewed and tested on an annual basis to ensure it continues to achieve best execution.
Foreign Organized Regulated Marketplaces (FORM)
CIIS will not send listed securities in bulk to a foreign intermediary for execution outside of Canada. However, to meet best execution obligations CIIS may make a determination that all or part of a client order could be transacted outside of Canada. In making this determination CIIS would consider liquidity, pricing, FX in the foreign market and any clearing or settlement issues before deciding to transact outside of Canada.
Prior to executing on a foreign organized market, the converted price will be considered against the Canadian marketplace to ensure the protected marketplace is not traded through. In certain circumstances, when trading in inter-listed securities in USD accounts, your order will be directed to a US marketplace in order to achieve best execution. Transaction in the US or a non-Canadian marketplace on inter-listed securities will be executed on a FORM as defined by CIRO.
CIIS does not trade directly on the US market, as such CIIS utilizes the services of a foreign intermediaries when one or more of the best execution factors are deemed to be improved. If an order is routed to any of the listed intermediaries, the order will be subject to the order handling and routing practices of the intermediary. CIIS is deemed to have reviewed the order handling and routing practices of the intermediaries and is satisfied that they are reasonably designed to achieve best execution. Foreign Intermediaries currently used by CIIS include:
- Apex Fintech
- Lampost Capital L.C.
- GLP
- StoneX
Unprotected Marketplaces
CIIS may trade actively by taking liquidity on unprotected marketplaces. If an unprotected marketplace has shown the ability to positively affect the factors considered for best execution, an unprotected marketplace may be used for passive posting in a routing/order handling strategy.
Fair Pricing of OTC Securities
CIIS trades OTC fixed income securities on an agency basis. CIIS does not mark up or mark down prices received for OTC securities. When acting as an agent CIIS diligently pursues fair and reasonable pricing sourcing quotes from multiple desks.
Best Execution Committee
CIIS’s Best Execution Policy and order routing table maintenance is governed and reviewed by the Best Execution Committee (BEC). The BEC meets quarterly at a minimum and works to ensure CIIS continually meets its best execution obligations through monitoring and review of client orders. The BEC reviews CIIS’s best execution policies and procedures and those of its trading service providers annually or when advised of any material changes. The BEC is composed of senior representatives from trading, compliance, finance, operations, and technology.
Direct Market Access (DMA)
If you are provided with Direct Market Access (“DMA”), you will provide specific instructions for all execution factors, and we will execute these orders accordingly. CIIS will meet our best execution policy by following those instructions.
Marketplace Fees and Rebates
CIIS may pay marketplace fees or receive marketplace rebates when routing certain orders to certain marketplaces. The fees for each marketplace are disclosed on their respective websites. Whether or not fees and rebates are passed onto our clients is dependent on the client agreement with CIIS.
Cancelling or Replacing Orders
Generally, CIIS will not move an order that has been booked on one marketplace to another marketplace. However, if modified order is eligible for better price routing and a better market exists, the order will be moved to take advantage of possible immediate execution. Otherwise, the modified order would stay at its original marketplace to maintain time priority if allowed.
Conflicts of Interest Relating to Best Execution
CIIS’s relationship with its affiliates represents a potential conflict of interest. CIIS trade desk operates in a fair and transparent manner and does not and will not prioritize one order flow over another.
CIIS may receive payment in the form of a rebate for routing client orders in US equities and options pursuant to the order routing arrangement. Any remuneration that CIIS receives for directing orders to any market center reduces the execution costs for CIIS and will not accrue to client’s account. CIIS does not direct its orders to specific trading services providers in order to receive such rebate; all orders are routed through pre-determined processes as described in this disclosure.
Market Data
CI Direct Trading offers different market data packages for clients who have access to professional trading platforms, please see these for details: Professional Platform Options and Market Data Fees. If you do not subscribe to real time market data you may trade with incomplete or delayed market data, which may reduce your ability to see available orders on some exchanges. CIIS considers all marketplace we access in real-time when executing your order regardless of the market data you have subscribed to.
CIIS updated above Disclosure of Best Execution Policies & Order Handling in December 2023. Please see below for previous Best Execution Client Disclosure: https://www.cifinancial.com/ci-is/ca/en/best-execution-client-disclosure-202011.html