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Order Execution Policy

Updated 18/05/18, v2

1. Introduction

a. Directive 2014/65/EU on Markets in Financial Instruments Directive (‘’MiFID’’) and the rules of the Financial Conduct Authority (‘’FCA’’) impose a best execution obligation on market participants, which means that market participant, like GKFX Financial Services Ltd (‘’GKFX’’, “The Firm”), must take all sufficient steps to obtain the best possible results in executing orders for its customers. Market participants are also required to establish and implement an Order Execution policy, commonly known as ‘Best Execution’ as set out by the FCA in COBS 11.2.14R.

The Firm applies Best Execution upon acceptance of a client order and when the client gives no specific instruction on the execution method. A client’s specific instruction on an order may prevent us from implementing Best Execution to obtain the best possible result for the execution of the order.

Best Execution will apply whenever we execute orders on behalf of retail clients. GKFX will always act as principal when executing client orders and we do not guarantee that when executing a transaction that our price will be more favourable than one which might have been available elsewhere.

b. The Nature of GKFX Business

GKFX is a global online trading broker, authorised and regulated by the Financial Conduct Authority ("FCA") under Firm Reference Number 501320. GKFX is an automated electronic market maker and ultimate provider of all prices to its clients and it is GKFX with whom the client is dealing and contracting with.

GKFX does not provide advisory services nor take responsibility to the suitability of specific client trades. GKFX does not engage in proprietary trading.

GKFX provides margin trading services in Foreign Exchange, CFDs and Spread Betting. It is GKFX’s decision as to what markets to offer its clients and it does so not as a broker but as a principle and counterparty to each trade. As such, every market offered by GKFX is quoted as a derivative of the underlying market and we are the only execution venue to which clients have access through us.

2. GKFX Procedures

a. Criteria

COBS 11.2.1R requires investment firms to take all reasonable steps to obtain the best possible result for their clients. Although price ordinarily merits a high relative importance in obtaining the best possible result, in light of COBS 11.2.9G, in some circumstances, for some clients, orders, financial instruments or markets, GKFX may appropriately determine that other execution factors are more important than price in obtaining the best possible execution result. Based on COBS 11.2.6R, when dealing with customer’s request GKFX has considered the following:

1.The client’s characteristics, including the client categorization as retail or professional;
2.The characteristics of the financial instrument concerned and of the client’s order; and
3. the characteristics of the execution venues to which orders can be directed;

b. Execution factors GKFX is required to take a number of different factors into consideration when executing an order for clients. The factors we will consider are the following:

* Price
GKFX takes the underlying market price of the derivative it is quoting and then applies an algorithm to this price to achieve its own market price. The underlying feed that GKFX uses may be from one source or exchange or in the case of FX from several feeds.

Where several feeds are used the best bid and offer combinations are used to maintain tight spreads at all times.

If your trade is accepted by us then your trade will be executed at the price requested by you and at no other price, assuming there is no “price error”.

* Speed of execution
In certain circumstances due to speed of internet communications, market volatility or in the case of deliberate manipulation of our quoted prices your trade may be rejected by our dealers if the price at which you have attempted to trade is not representative of the “underlying market” price when received by the dealers.

* Likelihood of execution
In almost all circumstances, as long as you have sufficient margin available on your account for the trade and so long as the trade size requested is equal to or under the maximum size permissible, your trade will be executed at the level requested.

* Size of order & liquidity in the market
All trades are subject to size considerations. If the requested trade size is larger than we are able to trade in the “underlying market” then it may be executed partially or the entire trade or order may be rejected at our discretion.

Based on the above factors, we consider that price will be the most important factor.

* Client type
If the Client is a Retail Client, the best possible result will be determined in terms of the total consideration, which is determined by the price of the financial instrument and the costs related to execution incurred by the Client. Speed, likelihood of execution and settlement, the size and nature of the order, market impact and any other considerations will be given precedence over the immediate price and cost consideration only insofar as they are instrumental in delivering the best possible result in terms of the total consideration to the Client.

If the Client is a Professional Client, price will ordinarily merit a high relative importance in obtaining the best possible result. However, in some circumstances, for some clients, Orders, Financial Instruments or markets, we may appropriately determine that other execution factors are more important than price in obtaining the best possible execution result.

As GKFX is always acting as principal, we are the sole execution venue for client orders.

3. Foreign Exchange (Forex)
GKFX generate tradable prices from information sourced through independent price providers and banks who generally provide liquidity to the global forex market. The main way in which we will ensure you receive best execution will be to ensure the calculation of our bid/offer spreads is made with reference to a wide range of underlying price providers and data sources.

4. Contracts for Difference and Spread bets
GKFX use third party data providers to supply price information from the relevant underlying exchange and derive tradable prices based on the factors listed above.

For spread based transactions (e.g. indices or commodities) we take into account factors such as interest, expected dividends and variations in the underlying contract for the reference date of the expiry of the product. A spread will be added to this, and as a result the prices displayed by us may vary from the cash price of the underlying.

In relation to some financial instruments, at the time at which you give us an order there may be no functioning or no open market or exchange on which the reference product is traded. In such cases we set out to determine a fair underlying price based on a number of factors, for example price movements on associated markets and other market influences, including information about our own client’s orders.

5. Specific Instructions
Where you give us specific instructions, including specifying the price of a transaction with us, or the price at which a Transaction is to be closed if the market moves against you, or, for us to “work” an order; those instructions take precedence over other aspects of our policy.

6. Professional Clients
If we have expressly categorised you as a Professional client in accordance with the meaning given to this term in the FCA Rules, we will consider relevant FCA and European Securities and Markets Authority (‘ESMA’) guidance to determine whether we are acting on your behalf and whether you are legitimately relying on us to deliver best execution in relation to your order. This includes our consideration of: (i) Who initiates the transaction; (ii) Questions of market practice and the existence of a convention to ‘shop around’; (iii) The relative levels of price transparency within a market; and (iv)The information provided by GKFX and any agreement reached.

We recognise that you will be relying on us to provide best execution and we will therefore execute your order in line with this policy. In certain circumstances our determination of the relative importance of the execution factors may differ from retails clients including for example where the likelihood of execution may take precedence over price.

7. Monitoring and Review of the Order Execution Policy

GKFX monitor the effectiveness Best Execution and relevant order execution arrangements on an ongoing basis. We assess on a regular basis whether the price feeds and hedging venues relied on in pricing our products allow us to achieve best execution on a consistent basis or whether we need to make changes to our execution arrangements.

We may amend the Order Execution Policy and the relevant Best Execution arrangements when necessary. Any new policy will be made available on GKFX websites and will be in force as from publication.

8. Fiduciary Duty
Although we aim to operate in accordance with this Policy, this Policy does not create any legal obligation or duty, fiduciary or otherwise, over and above our duties to you under the Terms of Business Agreement or any regulatory obligations placed on us by the FCA

 

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RISK WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. See our full Risk Warning and Terms of Business for further details.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. See our full Risk Warning and Terms of Business for further details.