Privacy, Terms and Conditions
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- From time to time this website may also include links to other websites, however these links are provided for your convenience to provide further information. JCI Capital Limited has no responsibility for the content of the linked website(s).
- Trading futures, options or contracts for differences involves the risk of loss. You may lose more than the amount originally invested and, in respect of these products as well as other products traded on margin, you may have to pay more later. You should not invest in such products unless you are satisfied that they are suitable for you. It could be some time before you see a return on your investment. Changes in the rates of exchange between currencies may cause your investment/the income to go down or up. If you have any doubts as to the suitability of these investments you should seek financial advice.
JCI Capital Limited is authorised and regulated by the Financial Conduct Authority (FRN: 536817).
Registered Office: 44 Davies Street, 1st floor Brookfield House, London W1K 5JA. Registered in England & Wales (Company Number 7372983); T: +44 (0)207 297 6700; VAT No. GB 114182449
Scope of the Best Execution Obligation
JCI Capital Limited (the Firm) must take all sufficient steps to obtain the best possible result when executing, placing or transmitting client orders on behalf of a client [or when dealing on a request for quote basis (“RFQ”)], taking into account the execution factors (as defined below) (“best execution”).
The regulatory duty to provide best execution extends to Professional Clients only when their order or RFQ relates to a MiFID II financial instrument and the Firm is executing on behalf of such clients.
The Firm will not owe best execution where it has correctly categorised a client as an Eligible Counterparty (generally or for a particular type of product or transaction). The Firm is not permitted to deal with Retail Clients and therefore its best execution arrangements are not applicable to such persons.
The Firm will apply best execution in a manner that takes into account the different circumstances associated with the execution of orders related to particular types of MiFID II financial instruments.
The Firm will provide best execution where it determines that the client is relying on the Firm to protect its best interests in relation to the pricing or other aspects of an order placed with the Firm (“legitimate reliance”). The Firm will assess legitimate reliance having regard to factors such as which party initiates the transaction, questions of market practice and the existence of a convention to “shop around”, the relative levels of price transparency within a market and the information provided by the Firm and any agreement reached. If the Firm determines that the client is not legitimately relying on the Firm then best execution will not apply.
In so far as the Firm receives specific instructions from a client as to how to execute a transaction, best execution will not apply as the Firm will instead follow those instructions to the extent possible. In such circumstances, the Firm will be deemed to have satisfied its best execution obligation, but only in respect of that part or aspect of the order to which the client instructions relate. To the extent that there are other parts or aspects of the order for which the Firm has not received specific instructions from the client, the Firm will apply its best execution arrangements as detailed in this Summary.
The Firm’s commitment to obtain the best possible result for its clients does not mean that it owes any fiduciary or other responsibilities over and above the specific regulatory obligations placed upon the Firm or as may be otherwise contracted between the Firm and its clients through terms of business or otherwise.
In complying with its regulatory obligation to obtain the best possible result when executing, placing or transmitting client orders on behalf of a client, the Firm will take into account the following factors when determining its execution arrangements (the “execution factors”):
- Price (price at which the financial instrument is executed);
- Speed (time it takes to execute a client order);
- Likelihood of execution and settlement;
- Size of the Order (in particular, how the size of the order affects the price of execution);
- Costs (for example, execution and settlement fees);
- Nature of the transaction (how the particular characteristics of the order may affect how best execution is achieved); and
- Any other consideration relevant to the efficient execution of the order, including whether it is executed on a regulated market, multilateral trading facility or organised trading facility (each a “trading venue”) or over-the-counter (“OTC”).
The variety of execution factors that are taken into account and their order of relative priority will be determined by the Firm on a transaction by transaction basis.
It is the general policy of the Firm that the most important execution factor for its Professional Clients is the price at which the relevant financial instrument is executed. However, there may be circumstances where the primary execution factors vary and another factor, such as the likelihood of execution and settlement or the time it takes to execute a client order, becomes the most important execution factor and is given precedence over price.
When executing a client order, the Firm will take into account the following criteria for determining the relative importance of the execution factors (the “execution criteria”):
- The characteristics of the client, including the categorisation of the client which will always be professional;
- The characteristics of the client order;
- The characteristics of the financial instruments that are the subject of that order; and
- The characteristics of the execution venues to which that order can be directed.
The Firm will apply the execution factors and criteria in a number of different ways, depending on the type of instrument involved, its liquidity and the role played by the Firm.
For fixed income instruments that are considered liquid, the Firm will seek best price on the market and will execute the trade with the client at the best price. In relation to fixed income instruments that are considered to be less liquid the firm may consider an OTC transaction to be the most appropriate form of execution or may also look to source niche counterparties. [In all cases, if the firm considers that after due enquiry it is able to offer a better price than is available at the relevant time on the market, it may execute the trade with the client.]
Having regard to the execution factors and criteria, the Firm may use one or more of the following venue types when executing client orders:
- regulated markets
- organised trading facilities or multilateral trading facilities
- other exchanges that are not regulated markets
- systematic internalisers
- the Firm’s trading desks’ principal positions
The Firm will not discriminate between execution venues when choosing an execution venue on behalf of a client. However, it is the general policy of the Firm that it will seek to execute orders directly with regulated markets through direct market arrangements. A list of Direct Market Access providers that may be used by the Firm is set out towards the end of this Summary.
Notwithstanding the above, and taking into account the execution factors and criteria, the Firm may use other execution venues when executing client orders.
Execution outside of a trading venue
The Firm may execute all or part of a client order outside of a trading venue. The Firm is required to obtain its clients’ consent in order to do so, which consent has been outlined in the terms of business.
The FCA’s rules require that where you have given the Firm a limit order for shares admitted to trading on a regulated market or MTF that is not immediately executed under prevailing market conditions, the Firm must make that unfulfilled limit order public immediately unless you expressly instruct us otherwise. We have framed our terms of business such that our clients are presumed to have instructed us not to make their unfulfilled limit orders public unless they tell us otherwise, as we believe the Firm’s ability to exercise discretion as to when and how unfulfilled limit orders are made public helps it to achieve the best possible result for its clients.
Order Handling and Aggregation
When carrying out client orders, the Firm is required to:
- ensure that orders executed on behalf of clients are promptly and accurately recorded and allocated; and
- carry out otherwise comparable client orders sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of the client require otherwise (COBS 11.3.2AEU).
Aggregation and allocation of client orders
The Firm may carry out a client order (i.e. execute an order on behalf of a client or transmit client orders to other entities for execution) or a transaction for own account in aggregation with another client order (i.e. combine a client order or transaction for own account with another client order) provided it is satisfied that:
- it is unlikely that the aggregation of orders and transactions will work overall to the disadvantage of any client whose order is to be aggregated;
- it is disclosed to each client whose order is to be aggregated that the effect of aggregation may work to its disadvantage in relation to a particular order; and
Where the Firm aggregates a client order with a transaction for own account and the aggregated order is partially executed, it will allocate the related trades to the client in priority to the firm, (COBS 11.3.10AEU).
Most corporate finance activity, such as underwriting and advisory services, does not involve the Firm executing, placing or transmitting client orders on behalf of a client, in which best execution does not apply.
However, depending upon the nature of the engagement, the Firm may execute, place or transmit client orders on behalf of a client in a corporate finance context, for example where the Firm is engaged to:
- build a strategic stake or acquire a target company;
- facilitate a share buy-back; or
- sell a significant shareholding.
in which case best execution will apply.
Execution factors in a corporate finance context
Most corporate finance transactions are unique. The means that the Firm’s general policy of identifying price as the most important execution factor is less likely to apply and other execution factors, such as likelihood of execution and settlement and speed of execution are likely to be the most important execution factors, depending on the particular characteristics and context of each transaction.
Execution venues in a corporate finance context
Corporate finance transactions tend to involve the acquisition or sale of larger blocks of shares and often involve additional complexities which limit the choice of execution venues available to the Firm, such as the need for secrecy, the requirements of the market abuse regime (or other appropriate standards of market conduct) in the particular circumstances and, where/if relevant, compliance with the Takeover Code or similar rules. Moreover, there is no formalised market or settlement infrastructure for OTC transactions. The Firm’s choice of execution venue may therefore be further limited where there is only one venue where it can execute a transaction.
When selling shares or debt, the general policy of the Firm is to choose to build a book or negotiate a private placement with identified investors (or the client may expressly instruct the Firm to do so). In these circumstances, the third party investment firms involved (trading proprietary or agency positions) will constitute the execution venue. Alternatively, the Firm may choose to use the block trade facility of an investment exchange.
The Firm’s clients will be deemed to have provided implied consent to the content outlined in this Summary when they instruct the Firm to act on their behalf in relation to an order.
Monitoring and Review
At least annually, the Firm will review its best execution arrangements and policy to ensure their ongoing effectiveness. The review will include consideration of whether the Firm could obtain better results for its clients if it was to:
- include additional or different execution venues or brokers;
- assign a different relative importance to the execution factors;
- modify the process by which execution venues or brokers are selected;
- modify any other aspects of its best execution arrangements and policy.
The Firm will also review its execution arrangements and policy whenever a material change occurs that could affect its ability to obtain the best possible result, on a consistent basis, for its clients (for example, a significant market event or material change to the Firm’s business model that could impact the parameters of the Firm’s best execution arrangements such as the execution factors specified above). Clients will be notified of any material changes to the Firm’s order execution arrangements or policy through publication of an updated version of this Summary [on the Firm’s website].
Annual Publication of Top 5 Execution Venues and Brokers
Each year the Firm will publish [on its website] data on its top execution venues and brokers used to obtain the best result for its clients, in respect of each class of financial instruments. Such data will include:
the top five execution venues in terms of trading volumes (the number of financial instruments traded times price for each transaction, cumulated for the year), where the Firm executed client orders in the preceding year, together with information on the quality of execution obtained; and
the top five brokers in terms of trading volumes to which the Firm transmitted or placed client orders for execution in the preceding year, and information on the quality of execution obtained.
List of DMA providers
Market Hub (Banca IMI SpA)
JCI Capital Limited Pillar 3 Disclosure and Policy for an IFPRU Firm as at 31st December 2018
The Capital Requirements Directive (CRD) establishes a regulatory capital framework across Europe governing the amount and nature of capital investment firms must maintain. In the United Kingdom, the CRD has been implemented by the Financial Conduct Authority (FCA) in its regulations through the General Prudential Sourcebook (GENPRU), Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU) and the Prudential Sourcebook for Investment Firms (IFPRU).
The FCA framework consists of three Pillars:
■ Pillar 1 sets out the minimum capital amount that meets the Firm’s credit, market and operational risk;
■ Pillar 2 requires the Firm to assess whether its Pillar 1 capital is adequate to meet its risks and is subject to annual review by the FCA; and
■ Pillar 3 requires disclosure of specified information about the underlying risk management controls, capital position and remuneration.
The rules in BIPRU 11 set out the provision for Pillar 3 disclosure. JCI Capital Limited (the Firm) has produced this document to meet its Pillar 3 disclosure obligations. The document is informed by the Internal Capital Adequacy Assessment Process (ICAAP), which is kept under review and subject to annual formal revision and approval.
Scope and Application of Directive Requirements
JCI is incorporated in the UK and is authorised and regulated by the FCA as 730K IFPRU Firm with permissions to undertake certain regulated investment activities. JCI is not a significant IFPRU firm. The Firm on a solo basis makes the Pillar 3 disclosures. JCI provides Wealth Management and Asset Management services as well as matching principal and agent basis trading services. JCI makes investments on its own behalf and does operate its own trading book.
Frequency of Disclosure
The Firm will be making Pillar 3 disclosures at least annually. The disclosures are as at the Accounting Reference Date which is the last day of the calendar year and any figures included in this document will be based on the audited accounts as at that date.
Location of Disclosure
The disclosure is published on our website.
The information contained in this document has not been audited by the Firm’s external auditors, as this is not a requirement, and does not constitute any form of financial statement and must not be relied upon in making any judgement on the Firm.
The Pillar 3 disclosures have been reviewed and approved by the Board.
Materiality & Confidentiality
The Firm regards information as material in disclosures if its omission or misstatement could change or influence the assessment or decision of a user relying on that information formaking economic decisions. If the Firm deems a certain disclosure to be immaterial, it may be omitted from this Statement.
Investment firms may omit required disclosures where they believe that the information is proprietary or confidential. The Firm regards information as proprietary if sharing that information with the public would undermine its competitive position. Proprietary information may include information on products or systems which, if shared with competitors, would render the Firm’s investments therein less valuable. Further, the Firm must regard information as confidential if there are obligations to customers or other counterparty relationships binding the Firm to confidentiality. JCI has made no omissions on the grounds that it is immaterial, proprietary or confidential other than as may be disclosed in the statutory accounts.
The Firm is committed to good risk management and prioritises risk management through its functional structure, governance processes, monitoring and reporting activities and its emphasis on the Firm’s vision and values.
From the Board down, the Firm considers its risk appetite in its strategy, business plans and risk management process.
On-going risk reporting provides the Board, the Audit & Risk Committee and senior management with risk management information concerning JCI’ risk exposure. This information also forms part of the firm’s ICAAP. The Firm is committed to managing the applicable risks to the business and maintaining an effective internal control structure, whichincludes oversight, monitoring and reporting of risks. Through independent lines of reporting for risk oversight and operations, our risk governance policies are designed to provide objective assessments and monitoring of risks. Management regularly reviews the level of risk it regards as appropriate in order to operate within its regulatory obligations and achieve it business objectives.
Risk Management Framework
Risk management within JCI is based on a ‘three lines of defence’ model, as follows:-
1. First line of defence (business management and staff) – responsible for identifying and assessing the risks faced in the business and ensuring that appropriate controls are established and maintained. This is overseen and strengthened by the Internal Control team.
2. Second line of defence (Risk & Compliance) – responsible for establishing an effective policy framework for the business and conducting compliance monitoring.
3. Third line of defence (External Audit and Compliance advisors) –provide independent and objective assurance on the effectiveness of risk management, control and governance processes. JCI does not have an internal audit function therefore this activity is outsourced to third parties, who report directly to the Board on specific reviews at the Board’s request.
JCI is committed to on-going review and development of all three lines of defence in line with its businesses scale and risk profile.
The JCI Board meets in person at least quarterly with additional calls as and when required. The Board is made up of executive and non-executive directors . A board pack is circulated in advance of each meeting to be reviewed and challenged as appropriate. The pack contains relevant and timely information in sufficient detail to enable the Board to understand the business and assess the risks, including the on-going assessment of the adequacy and quality of capital and liquidity. The management accounts are included in the Board pack and presented compared to budget after each quarter end.
The Firm aims to develop systems and controls to mitigate risk to ensure they remain within the documented risk appetite.
The firm sets its risk appetite as LOW by considering the material risks in the business and then evaluates the level of acceptable risk, either subjective or objective, and the related measurements.
For those key risks, which cannot be controlled, the residual financial risk is quantified and included in the ICAAP Pillar 2 assessment and additional Capital may be held against it.
Key Risk Categories
JCI considers its operations to be prudent and risk averse, with the business objective of achieving client satisfaction and financial strength of the company. JCI ’ is exposed to risks inherent in the Firm’s business and activities. The Firm has risk management policies, practices and reporting in place for each category of risk it is exposed to. The following inherent risks have been identified and analysed for their impact on JCI below:
Credit Risk – The Firm’s main exposures to credit risk is the risk that investmentmanagement and advisory fees cannot be collected, and cash held with banks. The Firm holds corporate cash with banks assigned high credit ratings. JCI carries out initial and on-going due diligence on new clients and counterparties including assessment of their credit risk, and all of the current clients are appropriately regulated, further reducing our exposure to credit risk. Credit risk exposure is therefore considered low and can be mitigated by process controls and, if necessary, can be funded from its capital and liquidity provisions.
Market Risk is the risk of loss due to adverse changes in the financial markets. The Company does trade on its own account but it has a strict policy on holding period (no overnight positions are allowed) and liquidity of stock. Time exposure is limited and monitored on a near real time basis so the nature of the stocks traded on its own book that are always liquid and easily tradable and less subject to fluctuation. However, capital market fluctuations can have an effect on client activity and Assets Under Management (AUM). Revenue earned by the Firm will be impacted by overall market performance and prices due to the management fees received as a percentage of AUM. JCI also has a limited exposure to market risk through foreign currency exchange rate movements for any assets held on the Firm’s Balance Sheet denominated in a foreign currency. Market Risk is therefore low.
Settlement Risk – JCI does offer contractual settlement to customers and has a settlementrisk. JCI does provide matching principle service, and in this instance, settlement risk is mitigated contractually as far as possible.
JCI does run a trading book and take proprietary positions so it is required to calculate Operational Risk under the FCA’s rules.
JCI has implemented a risk management framework to remove or mitigate the risks inherent in its business and associated with operation errors, including administrative errors, process failures, loss of IT services and competence and negligence of employees.
This recognises that operational risk is a significant risk area within JCI if not carefully managed. JCI uses its Risk & Compliance to reinforce and oversee the operation of these controls and the risk framework. If required, third parties may also be engaged to undertake independent reviews as a third line of defence. The operational risk framework in place to mitigate operational risks includes:
• Errors reporting, reaction and management to ensure root cause and preventative actions are investigated and implemented promptly by the business
• Operational and Strategic level risk registers to identify and address risks to operational and strategic objectives
The Board is satisfied that all foreseeable operational risks can be mitigated by process controls, and where necessary, can be funded from capital provisions under the Pillar 2 assessment.
CAPITAL RESOURCES AND REQUIREMENTS
As at 31st December 2018 JCI held audited Common Equity Tier 1 Capital of £ 993,013.
The internal capital to be held against the Firm’s Pillar 1 Own Funds Requirement is £583,375
This is the figure that the Board has assessed as satisfactory to meet the requirement and is believed to be sufficient to cover all risks identified.
JCI Total Regulatory Capital is monitored and reported regularly to the Board to ensure JCI has sufficient capital and liquidity to meet its regulatory requirements at all times. Any potential future failures will be identified in the projected budgets and addressed internally in advance of any actual breaches.
In accordance with the Capital Requirements Regulation remuneration disclosure requirements, as further elaborated in the FCA’s General Guidance on Proportionality: The Remuneration Code (SYSC 19A) & Pillar 3 Disclosures on Remuneration (Article 450 of the Capital Requirements Regulation (CRR)), as an 730K IFPRU firm the Firm falls within proportionality level 3 and is required to provide the following disclosures regarding its remuneration policy and practices for those categories of staff whose professional activities have a material impact on its risk profile.
The Firm has established a remuneration policy in accordance with the FCA’s Remuneration Code. The Board of the Directors is responsible for establishing, implementing and maintaining remuneration policies, procedures and practices that are consistent with and promote sound and effective risk management. No external consultant has been used for the determination of the remuneration policy.
Code Staff and Link Between Pay and Performance
The Firm classifies those staff whose professional activities have a material impact on its risk profile as Code Staff in line with the FCA’s Remuneration Code. The firm classified 2individuals in total as Code Staff in 2018. The aggregate remuneration paid to the Firm’s Code Staff during the financial year ending on 31 December 2018 was £ 170,000.
Remuneration comprised base salary, pension contributions and benefits in kind. There were no variable elements and no bonuses were paid to code staff in the period. Remuneration is determined at least annually. In determining remuneration, the Board considers the individuals’ and the Firm’s performance. Individuals’ performance is measured against documented and agreed objectives. There are no code-staff in fee or commission earning roles. There is no minimum pay increase and no contractual bonuses are in place for current code staff.