Order execution policy financial instruments - Danske Bank

Danske Bank A/S. CVR-nr. 61 12 62 28 - København
O R D E R E X E C U T I O N P O L I C Y – F I N A N C I A L I N S T R U M E N T S
Applicable from 1 June 2012
This policy sets out the principles we follow as
a securities dealer when executing your orders.
Exceptions
The policy does not apply to you if you are a
professional client and we quote a price for our
own account or negotiate terms directly with
you in respect of transactions where we act as
principal.
The policy also does not apply to orders concerning
issues and redemptions of unit trust certificates
or other units of collective investment
schemes
share issues and repurchases
acquisition offers to shareholders
The policy also does not apply to you if you are
classified as an “eligible counterparty”.
1. Best execution
We take all reasonable steps to obtain the best
possible result for you – this is what we call
“best execution”.
If your instructions limit our options for executing
your order, it may be impossible, or partly
impossible, for us to comply with our policy,
and we may therefore not be able to ensure
best execution.
2. Basis of assessment
When we choose how to ensure best execution,
we consider various factors such as
price and costs
speed
likelihood of execution and settlement
type and size of the order
other relevant factors
We prioritise the factors, considering
your situation and the objective of the order
current market conditions
the specific security or other financial instrument
that the order concerns
relevant execution venues
In most cases, price and costs are the essential
factors for ensuring best execution. This
applies also if, to serve your interests, we execute
your order in more tranches or at more
execution venues in order to achieve best execution.
When we execute the order, various circumstances
may cause us to prioritise other factors.
For example, the size or nature of your order
may affect the price level, making us prioritise
quick execution, or we may postpone the execution
of the entire order or parts of it.
Market conditions for the relevant financial
instrument may cause us to prioritise the likelihood
of execution. We may therefore decide
to execute your order at the execution venue(s)
that have the necessary liquidity to ensure
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Danske Bank, Holmens Kanal 2-12, DK-1092 København K
Tel. +45 33 44 00 00, fax +45 33 44 28 85

Danske Bank A/S. CVR-nr. 61 12 62 28 - København
timely execution and the smallest possible
effect on the price level.
3. Execution venues and business partners
We choose the execution venues and business
partners that, in our opinion, offer the best
possibilities of ensuring best execution.
In particular, we consider costs, efficient pricing
and access to price information, but we
also focus on execution venues with trading
facilities allowing us to execute orders where
the necessary liquidity is available.
Our most recent list of major execution venues
and business partners is available at
www.danskebank.dk.
4. Order execution
4.1. General conditions
It is not always possible to execute your order
at the best price, but we will always strive to
execute your order in accordance with our
policy.
We strive to execute purchase orders at the
lowest sales price offered and to execute sales
orders at the highest purchase price offered.
We execute orders as quickly as possible and
in the sequence in which they arrive.
We execute orders at as well as outside execution
venues, that is, regulated or other organised
markets. We may also choose to execute
an order acting as buyer or seller, for example
under the systematic internalisation rules. You
can read more about our way of trading in
Terms and conditions for trading in financial
instruments at www.danskebank.dk.
Orders may be aggregated and executed in one
or more tranches if, due to demand, several
orders may be settled at an average price that
we consider generally favourable. Consequently,
aggregation may be to the disadvantage
of an individual order.
We execute at a weighted average price when
we aggregate orders or execute orders in more
than one tranche.
When executed, aggregated orders are, to the
extent possible, allocated to clients on the trading
day at the calculated average price. If aggregated
orders can be executed only in part,
we allocate the executed part to the participating
clients in proportion to the size and conditions
of their orders. Allocation to Danske Bank
is made only if all orders of the participating
clients are satisfied in full.
4.2. Special conditions
4.2.1. Shares etc.
When we execute orders in respect of shares,
standardised derivatives (such as options and
futures) and unit trust certificates listed for
trading on a regulated or other organised market
and also traded outside that market, we
usually
promptly place the order at one or more
execution venues, subject to the rules of the
individual venue. Orders can be executed
only if they match opposite bids or offers.
However, if an order cannot be matched in
full, partial execution is often possible.
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Danske Bank, Holmens Kanal 2-12, DK-1092 København K
Tel. +45 33 44 00 00, fax +45 33 44 28 85

Danske Bank A/S. CVR-nr. 61 12 62 28 - København
wait before placing the whole order or place
it successively in tranches. We may wait if
we find that, because of market conditions,
liquidity or the size or nature of the order,
this is the most favourable solution for you.
combine the order with other orders and
subsequently place it at one or more execution
venues. We aggregate orders if we find
that, because of market conditions, liquidity
or the size or nature of the order, this is the
most favourable solution for you.
act as principal, trading at a price reflecting
the market price.
place the order through a business partner
with whom we have an agreement. Generally,
the business partner decides how to
execute the order.
4.2.2. Special financial instruments
When executing orders concerning special
financial instruments not listed for trading on
regulated or other organised markets and not
negotiated through issues, redemptions and
repurchases, we act as buyer or seller. Our
prices match the prices which we can obtain,
taking into account the time, size and trading
conditions.
We determine the price of unit trust certificates
on the basis of information from the issuer
about net asset value and available market
data on trading prices.
4.2.3. Bonds/fixed income
We normally execute trading in respect of
bonds with Danske Bank acting as buyer or
seller.
We distinguish between trading in bonds for
which we quote bid and offer prices, and bond
trading that we execute on the basis of prices
obtained from business partners that quote
prices for the relevant bonds. In both cases, we
trade as principal.
Bond pricing is based on models used to forecast
yield curve and development trends.
Through international, generally recognised
information systems, we have access to price
information from major market makers.
Structured bond pricing is based on the value
of the underlying asset. The exact forecasting
model of a specific structured bond can be
found in the conditions applying to the bond.
4.2.4. Derivatives trading (Danske Bank acting
as principal)
This section is relevant only if you have or want
to have a master agreement with Danske Bank
for trading in derivatives.
When you trade in derivatives with Danske
Bank acting as counterparty, the price of the
transaction is normally based on market
prices.
The price is calculated on the basis of either
external reference prices from recognised
operators on the relevant markets, information
providers, business partners, and others,
or
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Danske Bank, Holmens Kanal 2-12, DK-1092 København K
Tel. +45 33 44 00 00, fax +45 33 44 28 85

Danske Bank A/S. CVR-nr. 61 12 62 28 - København
our internal reference prices based on
prices, interest and foreign exchange rates,
yield curves, volatility, yield and price
spreads, co-variation, and supply and demand
In both cases, the following factors are also
taken into account:
Information about the issuer of the underlying
financial instrument
Relevant information about the market in
question
The complexity of the transactions
The liquidity of the market for the relevant
type of derivatives transaction
Settlement risks
Creditworthiness
Our cost of capital in connection with the
derivatives transaction
The costs incurred during the life of the
transaction, including expenses for fixing,
event and market value reporting
5. Monitoring, evaluation and changes
We monitor and evaluate the effectiveness of
this policy and the measures taken to comply
with it. If necessary, we will change the policy
or the measures.
We also assess, on an ongoing basis, whether
the execution venues and business partners
we have chosen to ensure best execution continue
to meet our standards. If not, we will
make the necessary changes.
Any changes to our order execution policy will
be published on our website.
6. More information
For more information about the execution of
your order, please contact your branch.
You can read more in Terms and conditions for
trading in financial instruments and Terms and
conditions for foreign exchange and derivatives
trading.
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Danske Bank, Holmens Kanal 2-12, DK-1092 København K
Tel. +45 33 44 00 00, fax +45 33 44 28 85