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Best execution policy

One of the core principles of Manulife Investment Management (“Manulife IM” or the “Firm”) is to put its clients’ best interests at the heart of its businesses. It is the policy of the Firm to take all sufficient steps necessary to obtain, when executing orders1, the best possible result for clients, taking into account a range of execution factors. This policy applies to certain legal entities of Manulife IM, including Manulife Investment Management (Singapore) Pte. Ltd..

Potential conflicts of interest

Manulife IM has an obligation to manage conflicts of interest between its clients and between the Firm and/or employees and its clients. This means the Firm requires all employees to act in the best interests and for the benefit of its clients. The Firm is committed to avoiding either perceived, potential or actual conflicts of interest. Where a conflict cannot be avoided, the Firm will ensure that such conflicts are dealt with and managed appropriately. The Firm takes all reasonable steps to avoid situations where its interests and client interests’ conflict and institute reasonably designed operational safeguards to protect client interests with respect to its brokerage practices. Such operational safeguards include:

  • Act with undivided loyalty in accordance with local regulations; 
  • Deal fairly and act in the best interest of the client when obtaining soft dollar services and products, where permissible; 
  • Resolving trade errors timely and expeditiously and, if applicable, bear the cost of correcting any error caused by the Firm’s failure to place trades correctly;
  • Have an adequate and fair basis for approving counterparties for execution in the exclusive interest of clients; 
  • Make full and fair disclosure of its brokerage practices, including communicating material changes to such practices, that could reasonably be expected to impair the Firm’s independence and objectivity or interfere with its respective duties to the clients and prospective clients; and
  • Review and assess regularly whether its trading operations or circumstances may present potential conflicts of interest and ensure that any conflicts of interest that may be perceived as material are appropriately disclosed in a timely manner.

The Firm must execute transactions for clients such that the client’s total costs or proceeds are the most favorable under the circumstances of the trade within the context of the marketplace. Each trade is customized to the objectives of the portfolio manager, to achieve best execution and benefit the client. There is no standard method to employ for each trade in striving to achieve best execution. A trader will take multiple variables into consideration when executing a trade.  The Firm must consider the full range of a counterparty’s services, execution skills and inventory, and in placing brokerage consider the following:

  • Price
  • Size of the order
  • Trading characteristics of the security involved
  • Availability of accurate information affecting choices of the most favorable market in which to seek execution. 
  • Availability of technological aids
  • Cost and difficulty associated with achieving an execution in a named market exchange
  • Value of research (where allowable)
  • Commission rate 
  • Financial stability
  • Market dynamics including liquidity, volatility
  • Trading capabilities of that counterparty; 
  • Macro-economic factors
  • A portfolio manager’s objectives, which may also include client mandates

The Firm considers several criteria to determine the relative importance of the execution factors listed above: 

  • the characteristics of the client;
  • the characteristics of the client order;
  • the characteristics of the financial instrument; and;
  • the characteristics of the execution venues to which that order can be directed.

The best execution standards require Manulife IM to implement systems, processes, execution arrangements and a governance framework that is reasonable designed in seeking best execution. As part of this framework, best execution is monitored and action taken to remedy sub-optimal execution outcomes. The Firm shall also monitor for broad based market developments and technological advances as a means of assessing the overall adequacy of the best execution program.

Approach to brokerage selection

Manulife IM believes that the overriding consideration in selecting brokers for executing portfolio orders is to minimize total transaction costs and seek the most effective use of our brokers’ execution capabilities, which in turn best ensures good value for clients.

Client guidelines/restricted accounts

Where a client provides us with a specific instruction in relation to an entire order, or any particular aspect of an order, including selecting to execute on a particular venue or through a restricted broker list, we will execute that order in accordance with those instructions. In following client instructions, we will be deemed to have taken all sufficient steps to provide the best possible result in respect of the aspects of the order covered by the instructions. In some circumstances, such orders may be traded after unrestricted client orders.

Directed brokerage arrangements

Some of our clients may not be able to trade with certain counterparties. This will be because certain counterparties are prohibited in their investment management agreement or for some other legal or operational reason that prevents the client from trading with the counterparty. As a result of such restrictions when applicable, Manulife’s efforts to achieve best execution may be diminished. 

Depending on the size and purpose of the restricted order, that order may have to be traded after unrestricted client accounts.


1 Includes placing orders with or transmitting orders to other entities to execute