1. Introduction
Revolut Trading Ltd (“we”, “us”, “our” or “Revolut Trading”) is authorised and regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom (“UK”).
Revolut Trading provides a non-advised investment service, only to physical persons classified as retail clients under the FCA's rules, in relation to whole shares (“shares”) and units in Exchange Traded Funds (“units”) listed in the United States of America (“US”), the European Union (“EU”) or European Economic Area (“EEA”), and the UK, and fractions of such shares and units (“fractional shares”). We refer to this service as the "investment service" and to the shares, units, and fractional shares as financial instruments or “instruments”.
Revolut Trading provides the investment service exclusively via the ‘Invest’ tab (“investment platform”) in the Revolut mobile app and Revolut web app (together referred to as the “Revolut app”).
Not all of the instruments mentioned above might be available to you at this time and nothing in this Best Execution Policy Disclosure should be interpreted to mean that all of these instruments are currently available. You should always check the investment platform to confirm which of these instruments are currently available to you.
2. Objectives
Revolut Trading is subject to the requirements of the FCA to act honestly, fairly, and professionally and to transmit client orders to other entities for execution on terms most favourable to its clients (including "you" or "your").
Revolut Trading has therefore established and implemented a ‘Best Execution Policy’ that enables it to comply with said regulatory requirements and makes this Best Execution Policy Disclosure (“Disclosure”) available to you to provide you with appropriate information about its Best Execution Policy.
Your agreement with us (“agreement”) contains important information, including this Disclosure and our:
- Terms of Business Omnibus;
- Risk Disclosure;
- Complaints Handling Disclosure;
- Conflicts of Interest Policy Summary;
- Client Assets Protection Summary; and
- Ex-ante Costs and Charges Disclosure.
You must acknowledge that you have read and understood this Disclosure in addition to the remainder of the agreement.
3. Acting honestly, fairly, and professionally
In doing business with you, we must act honestly, fairly, professionally, and in accordance with your best interests when transmitting your orders to other entities for execution. This is also known as the client's best interests rule.
4. Obligation to transmit orders on terms most favourable to you
The obligation described here forms our “best execution obligation”.
We must take all sufficient steps to obtain the best possible result for you when transmitting your order to other entities for execution, taking into account the execution factors of price, costs, speed, likelihood of execution and settlement, size, nature, or any other consideration relevant to the execution of your order.
We must generally determine the best possible result in terms of the total consideration, representing the price of the financial instrument and the costs related to execution, which must include all expenses incurred by you which are directly related to the execution of your order, including execution venue fees, clearing and settlement fees, and any other fees paid to third parties involved in the execution of your order.
At the same time, considering that we receive and transmit your orders to other entities for execution, as opposed to executing them directly ourselves, we also give the factor of speed of transmission of your order an equally high importance.
4.1 Following specific instructions from you
There could be instances where we follow specific instructions from you when transmitting your order to another entity for execution. In those instances, we act in accordance with your best interests, and we are not required to take additional steps to satisfy our obligation to comply with the client’s best interests rule.
5. Order execution arrangements
We receive and transmit your orders for US listed shares and fractional shares.
5.1 Selection of third party execution brokers
As a firm transmitting orders to other entities for execution, we may select a single entity for execution only where we are able to show that:
- this provides the best possible result for you on a consistent basis; and
- you can reasonably expect that the selected entity will enable you to obtain results that are at least as good as the results that could reasonably be expected from using alternative entities for execution.
At the moment, our third party brokers are:
- DriveWealth, LLC (“DriveWealth”);
- GTN Asia Financial Services (Pte) Limited (“GTN”); and
- Upvest Securities GmbH (“Upvest”).
Our third party brokers have execution arrangements and achieve such quality of execution that, together, enable us to comply with our best execution obligation when we transmit orders to them for execution. We also undertake regular reviews to assess that our third party brokers are providing best execution on a consistent basis and in your interests.
Our third party brokers have undertaken to comply in all respects with the regulatory best execution requirements on all orders they execute for you. Our third party brokers, in their sole discretion, will determine where to route orders in their execution broker network to comply with the best execution requirements.
DriveWealth
DriveWealth is a US brokerage firm registered with the Securities and Exchange Commission (“SEC”) and regulated by the Financial Industry Regulatory Authority (“FINRA”) in the US. DriveWealth is also a member of the Securities Investors Protection Corporation (“SIPC”). We rely on DriveWealth to give you access to shares listed on the New York Stock Exchange (“NYSE”) and the Nasdaq Stock Market (“NASDAQ”), and fractions of these shares.
GTN
GTN is a Singapore-based broker regulated by the Monetary Authority of Singapore (“MAS”). We rely on GTN to give you access to shares and units listed on the London Stock Exchange (“LSE”).
Upvest
Upvest is a German broker registered and supervised at the Bundesanstalt für Finanzdienstleistungsaufsicht (“BaFin”). We rely on Upvest to give you access to shares and units listed on the Tradegate Exchange (“TGEX”).
5.2 Disclosure of execution outside a trading venue
The third party brokers might also execute the transmitted orders outside a trading venue, which is called over-the-counter (“OTC”) trading, or via an intermediary. Your orders might be executed OTC in relation to both listed and not listed (or delisted) instruments. You explicitly consent to executing your orders OTC. A third party broker will be the counterparty (principal) to all your OTC transactions executed against its proprietary capital.
When submitting orders for instruments traded OTC, you are exposed to certain risks to a higher extent, including liquidity, volatility (notably increased slippage risk), and counterparty risks. Please refer to our Risk Disclosure for further information.
5.3 Confirmation of non-receipt of payment for order flow
We take all appropriate steps to identify and to prevent or manage conflicts of interest between Revolut Trading and you, or between you and another client, that may arise in the course of providing our investment service to you.
With regard to inducements, except in those limited circumstances where the FCA’s rules on inducements allow so, we do not pay to, or accept from, any third party any fee or commission or provide to, or receive from, any third party any non-monetary benefit in connection with the provision of our investment service.
You can read more about how we treat conflicts of interest in our Conflicts of Interest Policy Summary.
In line with the best execution obligation and our obligations relating to inducements and conflicts of interest, we do not receive payment, remuneration, or commission from the third party broker or any other third party in relation to the execution of your orders – a practice described as ‘payment for order flow’.
"Payment for order flow" occurs when an investment firm (typically a broker) that sources liquidity and executes orders for its clients receives a fee or commission from both the client who originates the order and the counterparty the trade is then executed with (typically a market maker or other liquidity provider).
Although we do not receive payment for order flow, we may not control if the third party brokers, which are entities based overseas and, therefore, not subject to UK regulation, charge payment for order flow when sourcing liquidity for your orders. Our third party brokers are typically required by their local regulators to disclose their policies with respect to payment for order flow.
The third party brokers may participate in payment for order flow programmes that result in them receiving remuneration, compensation, or consideration for directing orders to broker-dealers, markets, and market centres for execution. The source and nature of such compensation received will be furnished upon written request. However, the third party brokers consider the size of the order, the opportunity for price improvement and the quality of order executions when executing orders or routing orders to other brokers for execution. Decisions are regularly reviewed by the third party brokers to ensure best execution is achieved.
5.4 Making additional information available and notifying you of changes
Upon reasonable request from you, we will provide you with additional information about the third party brokers. We will also notify you of any material changes to our Best Execution Policy or the order reception and transmission arrangements described here by updating this Disclosure.
6. Monitoring the effectiveness of our policy and arrangements
We monitor on a regular basis the effectiveness of our Best Execution Policy and, in particular, we monitor the execution quality of the third party broker and, where appropriate, undertake to correct any deficiencies.
We review our Best Execution Policy and order reception and transmission arrangements at least annually and whenever a material change occurs that affects our ability to continue to obtain the best possible result for you.