AJ Bell Dodl order execution policy

We are required by the FCA to establish and implement an Order Execution Policy and to provide appropriate information to our customers as to how we take all sufficient steps to obtain the best possible outcome on the execution of your orders.

This policy applies to all orders received from, and executed on behalf of, our customers. It must be read in conjunction with our terms and conditions.

Consent

Having had access to review this policy via our app, or having been provided with a copy previously, you are confirming your consent to this policy when asking us to deal for you.

Dealing process and aggregation

At Dodl, orders for shares and funds are processed once per day. We use a daily cut off point to determine which orders will be executed that day. Shortly after 3pm, or any time at our discretion, all orders in the dealing queue will be aggregated where possible and executed with the relevant market counterparty.

We will produce a contract note for you when your order is complete. If you place your order after 3pm, it will not be executed that day but will instead be executed on the next available trading day.

General principles

When executing orders on your behalf we take into account certain criteria for determining the relative importance of the ‘execution factors’. This means we have policies and procedures which are designed to obtain the best possible execution result, subject to and taking into account:

• The characteristics of the order and the security that is the subject of that order
• The execution venues to which that order can be directed

Our commitment to provide you with ‘best execution’ does not mean that we owe you any fiduciary responsibilities over and above the specific regulatory obligations placed upon us, or as may be otherwise contracted between us.

Execution factors

It is important to note that we will not execute any orders prior to 3pm each day, which is our daily cut-off point. Orders for shares and funds placed by customers during the day are held until 3pm, at which point they will then be aggregated wherever possible and sent for execution on a bulk order basis. This means that your order may be aggregated with other customer orders, and this may lead to you receiving a worse price upon execution due to the size of the aggregated order when compared to the execution price of a single order. If you place your order after 3pm, it will be held until 3pm the following day or the next available cut off point.

We take into account various execution factors to determine how the order is dealt to achieve the best possible outcome:

• Price – we will always strive to achieve the most advantageous price for an order and it is usually the highest priority factor in attaining best execution.
• Costs of the transaction – when assessing which venue to execute an order on we will take into account any charges which may be passed onto the customer and ensure the total consideration of the order is the best outcome, this may lead to executing the deal at a worse price than the best available. This will be a high priority for securities listed on multiple venues.
• Speed of execution – in liquid securities where prices can move quickly, the speed of execution can be the highest priority as delays in the execution process can lead to a detrimental execution price being attained.
• Likelihood of execution and/or settlement – for illiquid securities, the likelihood of execution can be the overriding factor in the absence of competing prices from multiple venues. As the majority of orders are executed ‘on exchange’ this reduces settlement risk due to the settlement rules of the exchange and is therefore low priority in the execution factors, the priority may increase if competing quotes are retrieved for the same security both ‘on and off exchange’ as the settlement risks increase if trades are executed outside of a regulated exchange.
• Size, nature and complexity of the order – the best price displayed on execution venues is for a particular size; orders which are over this size will be executed in line with our processes and we will employ the best strategy we consider would lead to the most advantageous price being attained. Some strategies employed could lead to delays on the execution of the full order given the impact any immediate execution may have on the price.
• In some circumstances the other execution factors, including market impact may also be taken into account.

Specific instructions

As we are operating a simplified proposition, in which customer orders are held, before being aggregated and executed together, we will not accept specific instructions from you in relation to your orders. All orders will be executed as set out in the terms of this policy. 

Orders in UK listed securities (Equities and Exchange Traded Products)

Our electronic order management systems are connected to a range of internally approved Retail Service Providers (RSPs). After our daily order cut-off point (3pm), we will aggregate customer orders before polling for quotes from the RSPs, who will return the best price available for the total value of shares to be traded.

For example, if you place an order for £1,000 worth of shares in Company X, and another customer places an order for £2,000 worth of shares in Company X, we will aggregate your orders into a single market order for £3,000 worth of shares.

The RSPs can alter the quantities which they are prepared to deal in without notice, and so we may not always be able to execute on the RSP. If we do not receive a quote for the order, it will be executed manually.

For securities traded in multiple currencies we will receive quotes and trade against the sterling priced variant where one exists.

Manual execution

If no RSP quote is available we may negotiate the order with a market maker, taking into account the size of the orders and best price displayed either on the London Stock Exchange or on any Multilateral Trading Facility on which the security is traded such as Bloomberg.

In order to achieve the best result for you, we may be required to contact more than one Market Maker.

We may also route the orders onto the Primary Exchange of the listed security or to an alternative execution venue.

Orders in US securities

Our electronic order management systems are connected to a range of internally approved Retail Service Providers (RSPs). After our daily order cut-off point (3pm), we will aggregate customer orders before polling for quotes from the RSPs, who will return the best available international market price and then convert that sterling, for the total value of shares to be traded. A foreign exchange (FX) charge will be applicable as detailed on our charges page and this will be shown on the contract note.

For example, if you place an order for £1,000 worth of shares in Company X, and another customer places an order for £2,000 worth of shares in Company X, we will aggregate your orders into a single market order for £3,000 worth of shares.

The RSPs can alter the quantities which they are prepared to deal in without notice, and so we may not always be able to execute on the RSP. If we do not receive a quote for the order, it will be executed manually.

Manual execution

Where no RSP quote is available we will place the order through to a UK-based Market Maker which offers execution in international securities to negotiate a price. We will deal at the best available international market price and then convert that to sterling. An FX charge will be applicable as detailed in our charges page and this will be shown on the contract note.

Order types

At Dodl, all orders will be executed on an ‘at best’ basis. This means that for all orders, we will obtain the best possible price from the market for your order, taking into account the size of the order (whether aggregated or not), and our other execution factors. ‘At best’ also means you cannot set a limit on the share price for your order, and you place your order on the understanding and assurance that we will obtain the best possible price.

Execution venues

There is no differential in the costs incurred through the selection of execution venues therefore the best outcome, taking into account the execution factors, is the primary consideration for venue selection.

We may execute orders via regulated markets, multilateral trading facilities, systematic internalisers, Market Makers for their own account, other liquidity providers or Non-EU entities performing similar functions.

The below table lists the execution venues on which we place significant reliance:

We will regularly assess our execution venues against our order execution policy and related criteria to ensure we are satisfied with their performance. We do this by benchmarking the prices achieved for each trade vs the price on the Primary exchange, taking into account the execution factors, to ensure the execution prices are in-line with the market quoted prices.

We also review our execution performance including a review on venue performance as part of our ‘Order execution quality reporting’.

Action may be taken against any venue following these assessments which could lead to the suspension of access via the RSP and the MTFs.

When selecting a new Execution Venue we will perform due diligence on the venue by considering the size, financial performance, regulatory status and market coverage of the venue.

By agreeing to our terms and conditions and this order execution policy, you are providing your express consent to your order being executed outside a regulated market or Multilateral Trading Facility, even where that order could be executed on a regulated market or Multilateral Trading Facility, where a better outcome can be achieved.

Monitoring of this policy

We monitor all of our customer deals on a regular basis and benchmark the prices executed against the Primary Exchange for any listed securities. Trades which are executed at a worse price than available on the exchange, given consideration to the execution factors and that have not been executed in compliance with this execution policy will either be corrected in terms of an improved execution price, a refund of charges or an account credit to provide for any shortfall in monetary difference.

Policy review

This policy is reviewed annually or where there is any material change to our arrangements. We will notify you of any material changes to our execution policy or arrangements by providing an updated version by email or by publishing it on our website and/or app.

Further information

Any reasonable and proportionate requests for further information about our execution policy and how we monitor our execution venues can be made to the Dodl Support Team via the in-app chat service, or by email to hello@dodl.co.uk. We commit to respond within a reasonable time and in a clear and concise manner.

Definitions

Best execution – Our regulatory obligation to provide the most advantageous order execution for our customers.

Business hours – As detailed in our app and help centre

Execution venue – A regulated market, MTF, systematic internaliser, Market Maker or another liquidity provider where trades can be executed.