Duties of Securities Companies in the Optimal Execution of Clients’ ‎Orders ‎

The executive regulations of the Capital Markets Authority and Regulating Securities Activity Act required securities companies to carry out any orders or instructions issued to them by their clients. It also required them to exercise sufficient care when carrying out their clients’ orders in order to achieve the best possible results for these clients while taking implementation considerations into account. This includes the deal’s price, size, execution possibility, settlement, and any other considerations.

Securities companies must establish policies and procedures that allow them to provide the best service to their clients, particularly those policies and procedures related to the implementation of their clients’ orders and instructions, and they must provide their clients with any information about the policies and procedures for executing their orders that these clients may request. Order execution on behalf of clients To implement policies and procedures that ensure the timely and efficient execution of such orders, as well as to ensure that orders placed on behalf of clients are accurately and promptly recorded and identified.

Upon executing a deal for a client, the securities companies must consider several factors, which are as follows:

  1. The nature and requirements of the client.
  2. Classifying the client as a regular or a professional customer.
  3. The nature of the order to be executed.
  4. The nature and type of securities subject of the order
  5. The entities by which the order shall be executed.
  6. Executing orders as per the priority of receiving from clients.

If the deals are executed based on the client’s instructions, the securities company is exempt from the obligations outlined in clauses (1) to (3). (4).

If a securities company executes an order on behalf of an ordinary client, the best possible result must be determined in terms of total consideration, which represents the price of the security and the costs associated with executing the order, including fees, fees, and commissions, and the order can be executed from more than one entity. Within this time, the company must compare these bodies, taking into account the fees and other expenses associated with the order’s implementation, and it may not receive any commissions of its own in a manner that involves unjustified discrimination between the entities entrusted with executing the order.

Upon executing a deal of buying or selling a security, the securities company must send to the client notices of executing the sale or purchase deals of securities concluded in his favor, unless the client exempts the company from such notices according to the form prepared by the company, and these notices include, in particular, the following:

  • The Client’s Account number.
  • The name of the Securities Company.
  • The Client’s name
  • The date of receiving the order from the client.
  • The order’s execution date and time.
  • The nature of the deal, whether buying or selling.
  • The name of the security subject of the deal.
  • The quantity, execution cost, commission, net value, and total cost of the deal.
  • The method of executing the deal, whether by written order or a telephone call or email.
  • The currency in which the deal was made.

Accordingly; The company must prepare and send notices with executing deals for securities on the same day the transaction is executed; it is prohibited from using information related to client orders; and it must take reasonable precautions to prevent its exploitation by its employees or agents.

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To book an appointment or request legal advice about the duties of securities companies in the optimal implementation of clients’ orders, we are pleased to receive your inquiries at (info@Taqneen.com).