POSIT^®

POSIT^®, an electronic crossing system operated by Investment Technology Group Limited (“ITGL”) is regulated by the Irish Financial Regulator (“IFR”) as a Multi-lateral Trading Facility (“MTF”) pursuant to the European Communities (Markets in Financial Instruments) Regulations, 2007 (“MiFID”). As an operator of a regulated MTF, ITGL is required to notify the users of the MTF of the rules under which you may enter orders into, and trade in, POSIT. All orders entered into and trades executed in POSIT are subject to the rules of POSIT which are set out hereunder.

1. Clients may elect to trade in POSIT in one or both of the following ways:

• POSIT Match™ matches orders between buyers and sellers of equities within a two minute window (the “window”) of the hours of 9am, 9.30am, 10.00am, 11.00am, 12.00pm, 2.00pm, 3.00pm and 4.00pm British Standard Time. 
• POSIT Now™ matches orders every 30 seconds between the hours of 8.15 and 4.25 inclusive with the exception of a period commencing five minutes before a scheduled POSIT Match window and ending with a POSIT Now match 30 seconds after the match within POSIT Match (the “non-match period”). Posit Now orders will automatically participate in POSIT Match matches.

2. While ITGL does make every effort to ensure that a match runs as scheduled, it is not obliged to run any match, and may delay match times, alter the length of the POSIT Match window and the non-match period if:

a) technical difficulties require ITGL to do any of the above; or
b) a decision is made to do any of the above based on an assessment that significant additional liquidity will result, thus potentially benefiting all match participants.

3. Clients may enter orders directly into POSIT through ITGL’s proprietary connectivity software or through other means agreed with ITGL, or via ITGL’s subsidiary, Investment Technology Group Europe Limited (“ITGEL”). 

4. POSIT only takes orders for equities normally traded in the countries listed in Annex 1 to this letter.  ITGL may at any time add or delete countries to this list and you will be notified of any changes.

5. POSIT, as a price taking system, crosses at the mid point of the spread in the relevant stock on the stock exchange where that stock is normally traded (“the reference price”).  Clients may elect to have the commission payable to ITGL on the trade factored into the execution price and ITGL will therefore adjust the execution price accordingly and report to the client a “net price”.

6. Execution is not guaranteed in POSIT, and unexecuted orders may be withdrawn from POSIT or left in the system for participation in the next POSIT match.  Alternatively, the client can ask ITGL to execute the order outside POSIT, on the market on which the relevant stock is normally traded.

7. Orders sent to POSIT are automatically aggregated, executed simultaneously, and allocated using a proprietary algorithm.  The algorithm allocates executions pro-rata to the size of each order, but subject to the trading constraints attached to the orders entered in the match and the overall objective of maximizing the value of matched shares.  The time an order is entered affords no priority or prejudice at the time of crossing.

8. As the operator of a regulated MTF, ITGL is required to make details of trades executed in each match available to the public on a timely basis.  ITGL will always publish the gross price at which the trade was executed for the purposes of public reporting. The details required under Article 27, Commission Regulation (EC) No. 1287/2006 will be published. POSIT trade data is monitored in accordance with MiFID by BOAT and is published by trade data vendors. Transactions in AIM securities are reportable to the LSE and are subject to its rules. ITG will report these transactions to the LSE on your behalf, unless you are a member of the LSE and elect to report them yourself. Full details on vendors and how POSIT trade data may be viewed are available in Annex 2 to these Rules. ITGL may in the future choose alternative or additional information monitors/vendors and/or post its data on a website and you will be notified of any such changes.

9. ITGL, as the operator of POSIT, will report all transactions carried out in POSIT to the IFR in accordance with MiFID.

10. ITGL does not disclose any specific details of orders received prior to the running of the match. However, where a client consents to its POSIT business alerting out to other POSIT clients who are users of the POSITAlert applet, thereby exposing the client’s POSIT business to liquidity not available in POSIT, the following details of the client’s order will be disclosed to the POSITAlert applet user (a) the instrument and (b) the fact that the client order is at least a block in size (the size of a block to be determined by ITG from time to time). Details such as the size of the client order, the identity of the client and the size of the block will not be disclosed to the POSITAlert applet user.

Details (a) and (b) set out above will not be disclosed without the client’s consent which will be recorded in writing and maintained by ITGL. If a client does not provide ITGL with such consent no specific details of the client’s orders will be disclosed.

In the interests of improving liquidity, personnel at ITGL or ITGEL may give general information about the amount of orders and the general sizes of orders that will be participating in a particular match as well as disclosing the countries in which they are traded and general sector information.
Client identities are not disclosed before or after the match, save as required by any applicable law or regulation.

11. As a price taking system, POSIT plays no part in the price formation system of the market. However, ITGL does monitor price movements in the reference price to ensure the integrity of this reference price. Any user that is seen to have deliberately manipulated the reference price to achieve a better execution price in POSIT will be expelled from the system and ITGL will be entitled to cancel their POSIT execution(s). The matter will also be reported to the IFR and any other relevant regulatory authority. ITGL will provide full assistance to the IFR in investigating and prosecuting suspected market abuse.

12. Clients may cancel orders prior to the running of a match.  ITGL makes every effort to prevent erroneous executions that may result from clients who have failed to get erroneous orders out of the match on time, but this might not always be possible. Neither ITGL nor ITGEL takes any responsibility for clients failing to cancel their orders on time. Cancellation attempts after the match has run will not be facilitated unless the party or parties with whom the client has matched is or are willing to forego the transaction.

13. ITGL is the settlement counterparty vis a vis each client in POSIT transactions.  However, ITGL acts as agent in executing POSIT business and does not engage in proprietary trading activities. Clients must ensure they have adequate settlement arrangements in place. Clients must deliver securities and/or cash in respect of transactions and settle all obligations in accordance with the rules and customs of the relevant settlement system. Clients must provide ITG Operations with settlement instructions prior to trading.

14. Only eligible counterparties and professional clients as defined in MiFID may participate in POSIT. Clients must ensure that they are fit and proper, have a sufficient level of trading ability and competence, have adequate organisational arrangements and have sufficient resources for the role they will perform taking into account the financial arrangements required in order to guarantee adequate settlement of transactions. ITGL reserves the right to require clients to demonstrate that these conditions are met. If at any time a client does not comply with these Rules ITGL may suspend, restrict or terminate the client’s access to POSIT.

15. ITGL may remove or suspend any financial instrument from trading in POSIT.

16. The terms of these Rules are in addition to our Terms of Business (the “Terms”) and in the event of any conflict between the Terms and these Rules, these Rules shall prevail.

17. ITGL will notify you of any amendments or updates to these Rules or the Annexes hereto. ITGL may notify you by means of publication in full of the amended Rules on ITG’s website at www.itg.com/compliance.php.

ANNEX 1

POSIT currently crosses equities normally traded in the following countries:

United Kingdom

France

Germany

Belgium

The Netherlands

Spain

Switzerland

Italy

Ireland

Sweden

Finland

Austria

Portugal

Denmark

Norway