Regulatory Technical Standard 28 (RTS 28) Reporting

Period: January 2017 - December 2017

Quality of Execution (Contract for Difference - CFD)

It is our general policy for all client transactions not to give execution factors other than price and costs (“Total Consideration”) precedence unless they are instrumental in delivering the best possible result in terms of total consideration to the client. Tera Europe limited trading as TeraFX (“Tera”) is an STP-broker; therefore, liquidity and availability of instruments in our liquidity providers (LPs) are other crucial factors.

In terms of costs, the automated system will seek out the best overall outcome for the transaction and this is likely to be the most important execution factor to our clients. The Firm employs a transparent cost structure with no hidden commissions or fees. Main cost items for clients are spread and swap costs. In addition, the Firm monitors average raw spreads of LPs in all products on daily basis.

The Firm’s reject ratio from its LPs are provided below. Usually, the Firm’s reject ratio is less than 1%; however, in May, due to a problem with an LP, the Firm’s reject ratio has increased. The Firm ceased working with that LP and replaced that LP with another LP. Also, in December, the Firm encountered a series of DDOS attacks (cyber-attacks) and during switch to backup server and back, some orders were rejected due to a problem with reaching the server. However, all orders were re-filled afterwards (as seen in the number of filled orders).

Table 1. Tera’s Fill Ratio & Reject Ratio Jan-Dec 2017

 

 

 

 

Latency is within reasonable ranges (average speed is below around 124 millisecond). See below average duration of orders per month in 2017.

Table 2. Average Orders’ Latency of Tera, Jan-Dec 2017

2017

Avearge Duration (ms)

Average Max Duration top 10% (ms)

Average Min Duration bottom 10% (ms)

Total orders

Jan

79

205

13

99207

Feb

93

296

8

123704

Mar

200

1215

11

225453

Apr

206

1207

16

167474

May

109

287

14

179631

Jun

129

507

9

137871

Jul

109

317

7

131959

Aug

111

330

7

165327

Sep

101

179

9

201282

Oct

97

96

93

186276

Nov

100

214

7

210768

Dec

153

665

9

305188

* ms: millisecond

 

Tera is an STP broker providing Contracts For Difference (CFD’s) trading facilities for retail and professional clients. Tera offers CFDs in Indices, Commodities and Precious Metals.

 

Table 3. Information regarding PROFESSIONAL clients as per Annex II of Commission Delegated Regulation (EU) 2017/575

Class of Instrument

Contracts for Difference

Notification if <1 average trade per business day in the previous year

N

 

 

 

 

Top five execution venues ranked in terms of trading volumes (descending order)

Proportion of volume executed as a % of total in that class

Proportion of orders executed as % of total in that class

Percentage of passive orders

Percentage of aggressive orders

Percentage of directed orders

CFH (549300FSY1BKNGVUOR59)

37.19

18.67

0.00%

100%

0.00%

Swissquote (H6IQ3SWWWBLDBI06ZX04)

30.49

30.59

0.00%

100%

0.00%

Squared  (635400GNRY1S6JXJSV51)

22.12

9.21

0.00%

100%

0.00%

ADS (213800FPNEZWDW42FZ90)

8.87

26.50

0.00%

100%

0.00%

TMP (529900WZQBZ6KA701930)

1.33

15.04

0.00%

100%

0.00%

 

Table 4. Information regarding RETAIL clients as per Annex II of Commission Delegated Regulation (EU) 2017/575

Class of Instrument

Contracts for Difference

Notification if <1 average trade per business day in the previous year

N

 

 

 

 

Top five execution venues ranked in terms of trading volumes (descending order)

Proportion of volume executed as a % of total in that class

Proportion of orders executed as % of total in that class

Percentage of passive orders

Percentage of aggressive orders

Percentage of directed orders

TMP (529900WZQBZ6KA701930)

71.57

66.90

0.00%

100.00%

0.00%

Swissquote (H6IQ3SWWWBLDBI06ZX04)

9.79

13.09

0.00%

100.00%

0.00%

ADS (213800FPNEZWDW42FZ90)

6.89

6.28

0.00%

100.00%

0.00%

CFH (549300FSY1BKNGVUOR59)

5.92

6.28

0.00%

100.00%

0.00%

Squared (635400GNRY1S6JXJSV51)

5.84

7.45

0.00%

100.00%

0.00%

 

Close links, conflicts of interests, and common ownerships:

Among the Clearers, Tera Europe uses sister company Tera Yatýrým Menkul Degerler (TMP). However, TMP does not provide price feed. There is no close links with other LPs No conflict of interest was identified between Tera and TMP or other LPs.

 

Specific arrangements with execution venues: There is no specific arrangements or non-monetary benefit with any of the LPs Tera Europe is working with.

Change in the list of execution venues: Tera Europe has dropped one LP in 2017 and replaced it with another as business conditions/reject ratios were not satisfactory.

Execution differences according to client categorisation: TE Best Execution Policy is one and applies to both our Retail and Professional Client categories.

Data or tools relating to the quality of execution: Tera Europe monitors latency and slippage of LPs and change LPs (or add more LPs) based on the performance. In addition, product scope and margin requirements are another factor in including/excluding LPs.

 

 

 

More information on Tera Europe’s products and services

London                +44 20 7073 0494

Warsaw               +48 22 308 1406

customerservices@terafx.co.uk