Capita Share Plan Services

Execution and Order Allocation Policy

Execution Policy

Background

The Markets in Financial Instruments Directive (“MiFID”) requires investment firms involved in the execution of client orders to take all reasonable steps to obtain the best possible result for their clients, taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to order execution. Firms that execute orders or which transmit or place orders with other entities for execution are required to establish a "policy" for complying with the overarching best execution requirement.

Capita IRG Trustees Limited (“CIRGT”) provides products which involve receiving client orders in relation to shares and transmitting these orders to other entities for execution. It does not ordinarily execute orders itself. This execution policy sets out CIRGT’s strategy, and details the key steps it is taking to comply with the overarching best execution requirement and how those steps enable it to obtain the best possible result for its clients. It is made available to clients on request. Appropriate information on this policy is provided to clients in the terms and conditions for the products offered by CIRGT.

Execution Factors and Criteria

CIRGT has a duty when executing orders on behalf of a client to obtain the best possible result for its clients within the framework of its execution policy.

When selecting entities to provide execution services in relation to orders in shares, CIRGT takes all reasonable steps to obtain the best possible result for its clients, taking into account price, cost of execution, speed of execution and settlement, likelihood of execution and settlement, size and/or nature of the order or any other consideration relevant to order execution.

For all transactions that CIRGT undertakes on clients’ behalf it treats them as a retail customer. The products that CIRGT offers are execution only and accordingly it makes no assessment of the appropriateness or suitability of the transaction. CIRGT recognises that for retail clients the most important factor to determine best execution is the overall cost to the client of the trade. Consequently share price and the cost of execution are normally selected as the most important factors for the execution of a trade.

CIRGT receives orders and transmits them to an execution entity, which is responsible for executing the order and achieving best execution. The entities to whom CIRGT transmits orders adopt the same approach towards the factors set out above but their choice of how to deal may also be affected by the following:

1. the liquidity of the shares involved and the execution venues upon which the orders can executed
2. the execution policy of the entity
3. that the order may be aggregated with orders from other clients

On occasion CIRGT may consent to allow an entity providing execution services to deal off-market. An example of this may be where a stock is particularly illiquid and/or where an entity decides to deal as principal and trade from its own account. CIRGT undertakes to ensure that the client still receives best execution in accordance with Financial Services Authority rules.

Execution Venues

In all instances CIRGT acts as a receiver and transmitter of orders and relies on the entity it places the order with to determine the venue for the execution of the trade. It does not accept instructions to place trades on specific venues.

The venue of execution used depends on the nature of the trade being executed. Further details of this are given in the sections below.

Specific Instructions

CIRGT policy is not to accept specific instructions unless it falls within the following categories:

1. A limit order placed via the telephone or internet dealing service provided through Squaregain Limited or via online exercise facility available for certain share option schemes.
2. A price specified on postal instruction for immediate execution.

Where CIRGT accepts a limit order this may affect the quality of execution that it can provide to its clients and some or all of this policy may not apply to such orders.

Telephone and Internet Dealing Service

All orders received through CIRGT;s Telephone and Internet Dealing Service are transmitted by CIRGT to another entity for execution. CIRGT does not itself execute those orders. CIRGT has selected Squaregain Limited (“Squaregain”),a subsidiary of Société Générale SA, to provide a dealing platform for CIRGT. CIRGT transmits orders to Squaregain via the dealing platform which routes orders to an execution firm for execution in the market. Squaregain has selected Talos Securities Limited as its executing brokerfor orders placed through the Squaregain dealing platform. All of the orders derived from CIRGT’s internet and telephone share dealing service are placed by the executing broker on an execution venue which is either a regulated market or a Multilateral Trading Facility (MTF).

Squaregain has been selected to provide this service for the following reasons:

1. Squaregain’s executing broker has electronic links to most of the Retail Service Providers in the UK and is thus able to obtain instant electronic price quotes in shares
2. Squaregain’s broker’s system polls for price quotes automatically and selects the quote returned which provides the best price
3. Squaregain provides CIRGT’s dealing platform which is an effective and efficient method of placing trades with the executing broker.

If CIRGT receives an “At Limit order” in this service it makes public details of the order unless the client consents for this not to be done.

No trades in this service are aggregated.

Customer instructions are normally executed in the same order as they are received, except where there are special conditions, such as price limits or limited liquidity, where such conditions might require additional time to ensure that the best overall result is obtained.

CIRGT monitors execution performance on a regular basis, and at least once a year, it will review the effectiveness of the policy and, in particular, the execution quality of Squaregain’s executing broker and, where appropriate, correct any deficiencies that are identified.

Other Trades

These comprise trades arising from the following activities:

1. Dividend Reinvestment Plans
2. Investment Trust Savings Schemes
3. Monthly Share Purchase Plans
4. Share Incentive Plans
5. Nominee Administration service
6. Postal Share Dealing
7. The sale of shares issued as a result of the exercise of a share option

All orders received by CIRGT or generated by CIRGT as part of the above activities are transmitted by CIRGT to another entity for execution. CIRGT does not itself execute those orders. The orders are executed on a venue of the entity’s choice. This can be a Regulated Market, MTF, Systematic Internaliser or outside a Regulated Market. Details of the venue where the trade was executed are confirmed on the advice note.

CIRGT will usually aggregate all orders received on or before a specified dealing day and place the trade for the aggregated order with the selected entity for execution. Once the order is completed CIRGT allocates the outcome to the clients. This is based on the contract note for the order delivered by the selected entity.

CIRGT takes reasonable steps to ensure that the entity with which it places the trade has an execution approach that enables us to comply with its obligation to provide best execution. The entities that currently being used are:

Abbey Sharedealing
ABN Amro (Hoare Govett)
BMO Capital Markets
Cazenove and Co. (JP Morgan)
Charles Stanley & Co Limited
Citigroup
Collins Stewart
Credit Suisse
Daniel Stewart & Company Plc
Dresdner Kleinwort Wasserstein
Guy Butler Ltd
Hoare Govett
HSBC Bank Plc
KBC Peel Hunt
Merrill Lynch EMEA GMI
Nat West Stockbrokers
Numis Securities
RBC Capital Markets
Seymour Pierce Limited
Shore Capital
Squaregain Limited (Société Générale)
Stocktrade
UBS
Winterflood Securities Limited

CIRGT monitors execution performance on a regular basis, and at least once a year, it will review the effectiveness of the policy and, in particular, the execution qualities of the entities used, and, where appropriate, correct any deficiencies that are identified. CIRGT regularly assesses whether the execution entities included in this policy provide for the best possible result for its clients or whether CIRGT needs to make changes to its execution arrangements.