Disclosure of best execution policies

Rule

A Dealer Member must disclose to its clients in writing the following:
1. a description of the Dealer Member’s obligation under section 3120,
2. a description of the factors the Dealer Member considers for the purpose of achieving best execution,
3. a description of the Dealer Member’s order handling and routing practices intended to achieve best execution of client orders for listed securities, that include the following:
  1. the identity of any Marketplace to which the Dealer Member might route the client orders for handling or execution,
  2. the identity of each type of intermediary (domestic or foreign) to which the Dealer Member might route the client orders for handling or execution,
  3. the circumstances in which the Dealer Member might route client orders to a Marketplace or intermediary identified in sub-clause 3129(1)(iii)(a) or (b) above,
  4. the circumstances, if any, under which the Dealer Member will move a client order entered on one Marketplace to another Marketplace,
  5. the nature of any ownership by the Dealer Member or affiliated entity of the Dealer Member in, or arrangement with, any Marketplace or intermediary identified in sub-clause 3129(1)(iii)(a) or (b) above,
  6. if any client orders may be routed to an intermediary identified in sub-clause 3129(1)(iii)(b) above, pursuant to an arrangement with that intermediary, and
  7. a statement that client orders will be subject to the order handling and routing practices of the intermediary identified in sub-clause 3129 (1)(iii)(b) above,
4. a statement that the Dealer Member has reviewed the client order handling and routing practices of the intermediary identified pursuant to sub-clause 3129(1)(iii)(b) and is satisfied that it provides reasonable assurance of achieving best execution of client orders,
5. a statement as to:
  1. whether fees are paid by the Dealer Member or payments or other compensation is received by the Dealer Member for a client order routed, or a trade resulting from a client order routed, to a Marketplace or intermediary identified pursuant to sub-clause 3129(1)(iii)(a) or (b) above,
  2. the circumstances under which the costs associated with the fees paid by Dealer Member or the compensation received by the Dealer Member will be passed on to the client, and
  3. whether routing decisions are made based on fees paid by the Dealer Member or payments received by the Dealer Member,
6. and,
7. if providing market data as a service to clients, a description of any market data that is missing, including an explanation of the risks of trading with incomplete trading data.
A Dealer Member must provide separate disclosure for each class or type of client if the factors and order handling and routing practices used for such clients materially differ.
A Dealer Member must identify in the disclosure:
1. the class or type of client to which the disclosure applies,
2. the class or type of securities to which the disclosure applies, and
3. the date of the most recent changes to the disclosure.
A Dealer Member must make the disclosure:
1. publicly available on the Dealer Member’s website and clearly identify to clients where on the website the disclosure can be found, or
2. if the Dealer Member does not have a website, provide the disclosure in writing to the client upon account opening.
A Dealer Member must:
1. review the disclosure on a frequency that is reasonable in the circumstances, and at a minimum on an annual basis, and
2. promptly update the disclosure to reflect the Dealer Member’s current practices.
If a Dealer Member makes any change to the disclosure, the Dealer Member must:
1. for the website disclosure, identify and maintain the change on its website for a period of six months after the change has been made, or
2. if the Dealer Member does not have a website, deliver the change to the client in writing no later than the 90th day after the change has been made.