Best Execution Policy and Order Handling Disclosure

Canada regulatory

Best execution is governed by the Canadian securities regulators’ National Instrument 23-101 – Trading Rules, Investment Industry Regulatory Organization of Canada (“IIROC”) Rule 3100 Part C and Montreal Exchange Rule Part 7, Article 7.3. In addition, despite any instruction or consent of the client, best execution of a client order for listed security is subject to compliance with the Order Protection Rule under Part 6 of National Instrument 23-101. Société Générale Capital Canada Inc. (“SGCC”) policies and procedures are designed to provide reasonable assurance of compliance with those regulations and will be amended to remain compliant with all industry rules and regulatory guidance.

This document applies to each client of SGCC, all of whom are institutional clients as defined in IIROC Rule 1201 and to all Canadian listed securities, derivatives and OTC securities (debt securities).

Routing Practices

In accordance with Best Execution and Order Protection Rules obligations, Société Générale Capital SGCC uses Third-Party Smart Order Router (“SOR”) service, to ensure best available price and most favourable execution are obtained for client orders. SORs typically employ the spray or slice strategy which are designed to prioritize execution time and price discovery respectively which are subject to best execution policies and procedures.

The primary objective of the SOR is to achieve the best possible outcome for our clients. SOR interactions with execution venues are guided by objectively observed and calculated parameters to ensure best execution and order protection. The decision as to which execution venues and price points to target can be taken based upon both the explicit instructions accompanying the relevant order from the client, and the SOR’s programmed parameters.

The SOR may potentially break the client orders into smaller sized “child orders” and send them to one or many execution venues, either in parallel or in sequence. Best execution obligations will be applicable on the child orders as well as on the overall original client order.

SGCC is a participating organization or a member of the following Canadian equities marketplaces/Alternative Trading System and may route client orders on Canadian equities to the following lit venues for execution:

>SGCC is also an Approved Participant of the Montreal Exchange and routes Canadian listed derivatives orders directly to the Montreal Exchange under SGCC’s own membership.

SGCC may use domestic intermediaries in limited circumstances such as where SGCC do not hold a direct membership to a marketplace or when SGCC is experiencing technical difficulties. Where SGCC routes client orders via external domestic intermediaries, each order is handled in accordance with the intermediary’s order handling and routing practices. For each intermediary, SGCC has obtained a copy of its order handling and routing practices for review and has determined that the order handling and routing practices as described within these documents are reasonably designed to achieve best execution. Whether an order was routed to an intermediary, along with the identity of the intermediary, can be provided on a trade-by- trade basis upon request.

Moving orders from one market to another

As the market data changes, the order may no longer be marketable at its current destination. If it remains marketable, the order is left at the current destination. If it becomes non-marketable at the current venue, the Third-Party Smart Order Router routing algorithm scan alternative venues to verify whether it is marketable at other destinations.

The routing algorithm may elect to move an order entered on one marketplace to another marketplace, if the determination is made that best execution can be more easily achieved. The decision to move one or many orders from the original marketplaces will be weighted against order priority factors and the potential for partial fills.

Ownership Interest in Marketplaces Accessed

SGCC do not have ownership interest in any of the Canadian marketplaces SGCC connects to and accesses. Therefore, SGCC do not have a conflict of interest when establishing order routing priorities.

Marketplace Fees and Rebates

SGCC may pay marketplace fees or receive marketplace rebates when routing certain orders to certain marketplaces for execution. However, SGCC does not charge the fees or pass on rebates onto clients and these elements are not considered in routing decisions. Marketplace fee schedules are disclosed on the websites of each marketplace.

Order Type

Market Order

A market order is an instruction to trade at prices available on marketplaces. Market orders are immediately traded upon order entry provided there is sufficient volume and liquidity.

Limit Order

A Limit Order has an explicit minimum sale price or maximum purchase price provided by the client. Limit orders are not guaranteed a fill unless the security trades above the specified order price in the case of a sell order, and below the specified order price in the case of a buy order.

Market On Close Order (“MOC order”)

A Market on Close order will trade on the Market on close facility at the calculated closing price. Market on close orders must be entered into the MOC Facility before 3:50p.m.

Day Order

Day orders expire at 5:00 p.m. and can participate in all trading sessions.

Good Till Cancel Order (“GTC order”)

Good till cancelled orders expire at 5:00pm., 90 calendar days after order entry. These orders participate in all regular sessions.

Good Till Date Order (“GTD order”)

Good till date orders expire at 5:00pm on a specific day. These orders participate in all regular sessions.

Special Terms Orders

Special Terms Orders are executed by SGCC’s trading desk representatives and are entered only on the Special Terms Market of the Primary Marketplace, unless they are immediately executable on an alternative marketplace at the time of entry. Special Terms Orders will expire at the close of the principal marketplace.

Overview of best execution and order handling across classes of financial instruments

In exercising reasonable diligence, SGCC will consider among other things when executing all client orders:

• The character of the markets or security (e.g. price, volatility, relative liquidity),
• The speed of execution
• The certainty of execution
• The size and type of the transaction,
• The terms and conditions of the order as communicated to the firm by the customer.

CANADIAN LISTED SECURITIES

Pre-Open Session

Marketplaces that provide opening auctions may have different methodologies in calculating the opening price. Price discrepancies between marketplaces may occur.

An order received prior to the opening (9:30 am ET) will be queued for routing on the principal marketplace for execution on the opening in accordance with the calculated opening price protocol. These orders will not be routed to an alternative marketplace, as not all marketplaces open at the same time.

This may influence the price and the volume of an order which is entered for execution in the preopening period. For this reason, automated systems may not be relied upon during the pre-opening session to obtain best execution of client’s orders, unless otherwise instructed by the client.

Regular Session  

Unless instructed by client, all orders for Canadian stocks received between 9:30 a.m. and 4:00 p.m. ET, Monday through Friday, not including statutory Canadian holidays ("Regular Trading Hours"), will be transmitted for best execution through Third-Party Vendor Smart Order Router.

There are multiple marketplaces in Canada on which orders to trade listed securities can be placed and executed. In accordance with best execution and order protection rules obligations, SGCC uses Third-PartyVendor Smart Order Router service to route orders to all Canadian visible marketplaces.

Third-Party Vendor Smart Order Router service consolidates order information from multiple marketplaces to enable SGCC to transmit equity securities orders to the Marketplace with the best price.

Extended Session

Some marketplaces offer additional order execution facilities outside of their normal trading hours. Clients should consult the web sites of the marketplace where they intend to trade outside of regular business hours.

Unless instructed by client, orders received after the close of the regular session will be held and transmitted to the market on the following business day.

Please be advised that price determination and liquidity may vary from market to market during these trading sessions.

FOREIGN EXCHANGE TRADED SECURITIES.

The handling of customer orders in foreign securities that do not trade in Canada may differ from the handling of orders in Canadian traded securities. The character of the particular foreign market, the accessibility of quotations may vary significantly.

Unless instructed by client, SGCC will not transmit to U.S. equities markets orders on Canadian securities inter-listed on U.S marketplace to provide best execution.

SGCC transmits orders on foreign exchange traded securities using its affiliates routing systems.

When an order is routed to a SG affiliate acting as foreign intermediary, the order will be subject to the order handling and routing practices of that intermediary, which may apply different criteria when assessing execution quality due to local rules and regulations. For each foreign intermediary, SGCC has obtained a copy of its order handling and routing practices for review and has determined that the order handling and routing practices as described within these documents are reasonably designed to achieve best execution. Whether an order was routed to an intermediary, along with the identity of the intermediary, can be provided on a trade-by- trade basis upon request.

OTC SECURITIES (DEBT SECURITIES)

SGCC will make a reasonable effort to obtain a price for the customer that is fair and reasonable in relation to prevailing market conditions, considering the availability of the securities involved in the transaction, the fair market value of the securities at the time of the transaction and the total dollar amount of the transaction.

In order to meet its best execution obligation for debt securities, SGCC pursues fair and reasonable pricing at the time of execution. Pricing is dependent on various factors, such as:

• Liquidity of the security;
• Relative fair market value of the security;
• Indicative pricing of other similar securities or benchmark references;
• Cost analysis, including any costs associated with the execution of the transaction;
• Notional amount of the trade; or
• If both parties agree on a price such as when SGCC acts only as an agent for execution purposes.

DERIVATIVE INSTRUMENTS

Canadian listed derivatives instruments are solely traded on the Montreal Exchange.

SGCC will take reasonable care consistent with just and equitable principles of trade and diligently pursue the execution of each client order on the most advantageous execution terms reasonably available under all of the circumstances relating to the trade or trading strategy and the then current market conditions at the time of the trade.

When assessing the most advantageous execution terms reasonably available, SGCC will consider general factors including, but not limited to: trading strategy, trade price, speed of execution, certainty of execution, and overall cost of execution. In the case of strategy or spread trades, SGCC will consider these factors as they relate to the execution of the overall strategy, rather than the execution of each individual leg of the trade.

Review of Best Execution Policies and Procedures

SGCC has established a best execution committee that conducts reviews and examines relevant internal

and marketplace reports on a quarterly basis. Annually or whenever there is a material change to the trading environment or market structure that may impact SGCC’s ability to achieve best execution, the committee reviews this disclosure and the best execution policies and procedures. For example, the launch of a new market, or a material change to the functionality of an existing market, may result in a policy or procedure change.

In the event of a material change in SGCC’s best execution policies and procedures, SGCC will post a notice

of the changes on its website with a revised copy of this “Best Execution Policy & Order Handling Disclosure”.

Date of this disclosure and material changes

01/03/2023 – Annual review of the SGCC Best Execution Policy & Order Handling Disclosure, where updated sections are highlighted in yellow and will be maintained for at least the next 6 months.