Best Execution Policy

Touchstone Capital Securities Co., Ltd. (the "Company") sets forth this Best Execution Policy and execution methodology for execution of client transactions on the best terms in accordance with the Financial Instruments and Exchange Law ("FIEL") Article 40-2(1).

Upon acceptance of a client order for securities listed on a financial instruments exchange within Japan, we will execute that order in accordance with the following policy.

    1. Securities Covered by This Policy
  • (1) "Listed Share Certificates, etc.," as prescribed under Article 16-6 of the Enforcement Order of FIEL [including, but not limited to, stocks, bonds with stock acquisition rights (CBs), ETFs (beneficiary certificates in investment trusts linked to a stock index), and REITs (investment certificates in real estate investment trusts), and the like which are listed on a financial instruments exchange in Japan]
  • (2) "Securities Handled" as set forth in Article 67-18(iv) of FIEL [Green Sheet issues, Phoenix issues, CBs]
    • We will not accept orders for Securities Handled.

    2. Best Execution Methodology
    When we receive clients' orders in Listed Share Certificates, etc., we will execute the orders as agency orders in the auction market on Japanese financial instruments exchanges unless we receive any specific instruction from the client.

    Listed Share Certificates, etc.

    Upon acceptance of a client order for Listed Share Certificates, etc., in principle, we will not act as a direct counterparty but will treat it as an agency order with respect to such a client order by placing the order in the auction market on a Japanese financial instruments exchange via another securities company. We will not execute such a client order in the off-exchange market including PTS (Proprietary Trading Systems).

  • (1) Upon receipt of an order we will promptly place the order with the Japanese financial instruments exchange where the share is listed. Orders received from a client outside of trading hours will be placed with the financial instruments exchange after trading reopens on that exchange.
  • (2) Orders received pursuant to (1) will be placed with the exchange as follows:
    • (A) If the securities are listed on only one financial instruments exchange ("Single Listing"), we will place the order on that financial instruments exchange;
      (B) If the securities are listed on more than one exchange ("Multiple Listing"), then the order will be placed on the priority financial instruments exchange provided by the data terminal service of the company Quick K.K. at the time of the executing.

    3. Reasons for Selecting the Relevant Execution Method
    Since a financial instruments exchange handles concentrated demand from many investors, trade on an exchange, as compared with an off-exchange trade, has advantages in terms of liquidity, execution probability and execution speed. We have therefore determined that execution on an exchange is the most reasonable for a client. If the subject securities are listed on more than one exchange, we have determined that it would be most reasonable for the client to execute the order on the financial instruments exchange that has the highest liquidity.

    4. Others
  • (1) Notwithstanding 2. above, we will execute the following types of transactions:
    • (A) A transaction in which a client has specified the method of execution by requesting that we act as the direct counterparty or as an intermediary for execution with another client as the direct counterparty, or execute on a specific exchange, or the client has specified an execution time range or the timing of execution of each order, etc.
      We will execute as instructed.
    • (B) Odd-lot shares or shares of less than a trading unit.
      • By placing the order with the securities company that handles the odd-lot shares or the shares in a quantity that is less than a trading unit.
  • (2) In some cases as a result of a system failure or otherwise, we may have no alternative but to execute an order using a method other than the method that we have selected based on this best execution policy. In such cases, we will endeavor to execute on the best terms possible.

  The duty of best execution not only relates to price but involves the consideration of various factors, including cost, speed and certainty of execution. That a trade appears after the fact not to have been executed at the best possible price does not by itself necessarily constitute a violation of the duty of best execution.  


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