French Monetary and Financial Code
In forceI.- Investment services providers other than portfolio management companies shall take all reasonable steps to obtain, when executing orders, the best possible result for their clients having regard to price, cost, speed, likelihood of execution and settlement, size, nature of the order or any other considerations relating to the execution of the order. Nevertheless, whenever there is a specific instruction given by clients, ISPs execute the order in accordance with that instruction.
Where investment services providers other than portfolio management companies execute orders on behalf of non-professional clients, the best possible result is determined on the basis of total cost. The total cost is the price of the financial instrument plus the costs associated with execution, which include all expenses incurred by the client directly linked to the execution of the order, including costs specific to the execution venue, clearing and settlement costs and any other costs paid to third parties involved in the execution of the order.
With a view to ensuring the best possible result when several competing execution venues are able to execute an order for a financial instrument, ISPs shall assess and compare the results that would be obtained for clients by executing the order in each of the execution venues included in the execution policy referred to in II if they are able to execute that order. In making this assessment, ISPs shall take into account their own commissions and the costs of executing the order in each of the eligible execution venues.
II - Investment services providers other than portfolio management companies shall establish and implement effective arrangements for complying with I. They shall establish and implement an order execution policy enabling them to obtain the best possible result for their clients' orders in accordance with I.
III - The order execution policy shall include, in respect of each class of financial instrument, information on the different execution venues in which the investment service provider other than an asset management company executes client orders and the factors influencing the choice of execution venue. It shall include at least those execution venues which enable the investment service provider to obtain, in most cases, the best possible result for the execution of client orders.
Investment service providers other than asset management companies shall provide appropriate information to their clients on their order execution policy. That information shall explain clearly, in sufficient detail and in a manner easily understood by clients, the manner in which orders will be executed by the providers for their clients. They shall obtain their clients' prior consent to this execution policy.
Where the order execution policy provides that client orders may be executed outside a trading venue, investment service providers other than portfolio management companies shall in particular inform their clients or potential clients of that possibility. ISPs shall obtain the prior express consent of their clients before executing their orders outside a trading venue.
Investment services providers other than portfolio management companies may obtain this consent either in the form of a general agreement or for specific transactions.
IV - At the request of their clients, investment service providers other than portfolio management companies must be able to demonstrate that they have executed orders in accordance with their execution policy.
V.-Investment service providers other than portfolio management companies shall not receive any remuneration, rebate or non-monetary benefit for routing orders to a trading platform or execution venue that fails to comply with the requirements of I of this article, 3° of I or II of article L. 533-10, articles L. 533-11 to L. 533-12-4 and articles L. 533-24 and L. 533-24-1.
