Mariana UFP LLP

SUPPLEMENT TO TERMS OF BUSINESS: OTF RULES

These provisions relate to the operation of our OTF and form the rules of our OTF (the Rules).

In addition to these provisions, the following provisions in our Terms of Business apply to our operation of the OTF and are incorporated by reference into them.

Mariana UFP LLP (“MUFP”) is incorporated in England (Company number OC363748) and is authorised and regulated by the Financial Conduct Authority (firm reference number 551170). Our registered office is at 100 Cannon Street, London EC4N 6EU.

MUFP prides itself on providing a competitive market-leading broking and deal execution service in a wide range of exchange-traded derivatives and equities.

1. Scope of the OTF

• This Organised Trading Facility (‘OTF’) Policy only applies to Clients of MUFP’s OTF who place orders and generate actionable expressions of interest in financial instruments which are eligible for transacting on the OTF which MUFP operates – the OTF The securities that are eligible OTF Investments are set out on MUFP’s website (to which reference should be made for a current definitive list). At the date of issue of this policy they are:

1. 1. 1. Fixed Income (bond) securities;
      2. options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash but which are not listed on a regulated market or other trading venue (OTC);

(the OTF investments).

• The only asset classes that can be entered into through our OTF are the OTF investments. We will decide which investments can be executed through the OTF based on a number of criteria:

1. 1. our ability to enter into such transactions and our clients’ desire to do so;
   2. whether, in our view, there is sufficient liquidity to execute them through our OTF;
   3. whether there is sufficient information in the public domain about
      1. the terms of the OTF investments;
      2. how to value them and, where applicable, their underlying asset
      3. how to determine their price; and
   4. where they are derivatives, the fact that they are not required to be cleared through a central counterparty. [Art 18(2) of MiFID II]

• You can find information about the OTF investments on our website. [Art 18(2) M2] Please also note the risk warnings on our website (a copy of which we have provided to you with our ToB) in relation to OTF investments. [Art 16(4)(b) MiFID II].

2. Eligibility 

• To be eligible to use our OTF you must have been accepted by us as a client and you must not be a natural person or a retail client (as defined in Article 4(1)(12) of MiFID II), and you must satisfy us that you have met and will continue to meet the following requirements:

1. 1. Either:

1. 1. 1. you are an EEA‐regulated investment firm or credit institution (each as defined in MiFID II); or
      2. you have satisfied and will continue to satisfy us, as required, that you are fit and proper to use the OTF, with adequate organisational arrangements in place and a sufficient level of trading ability and competence; and

1. 1. you have agreed to comply, and will continue to comply, with the Rules, the Terms of Business and Applicable Law when using our OTF and otherwise in connection with it;
   2. you have the legal capacity to trade in OTF Investments on the OTF;
   3. you have appropriate arrangements for the orderly settlement of transactions in OTF Investments;
   4. you have all registrations, authorisations, approvals and/or consents required by Applicable Law in connection with trading in OTF Investments on the OTF;
   5. you have designated to us one or more Responsible Persons;
   6. you and your Responsible Persons have adequate experience, knowledge and competence to transact in OTF Investments;
   7. you have adequate internal controls that are reasonably designed to promote fair and orderly trading on the OTF, minimise trading errors, preserve the integrity and stability of the OTF and prevent breaches of the Rules and of Applicable Law; and
   8. you agree to meet such other criteria as we may reasonably specify from time to [Art 18(3) MIFID II]

3. Suspension or Termination

• We may, in our sole and absolute discretion, suspend, impose conditions on or terminate your ability to access the OTF in the following circumstances:

1. 1. you and/or any of your Responsible Persons is in breach of the Rules, the Terms of Business, or Applicable Law;
   2. you have failed to pay any dues, assessments or fees due to us within thirty (30) calendar days of the date of the applicable invoice;
   3. your Insolvency;
   4. you no longer meet the eligibility criteria for admission as a Client;
   5. in the event of an Emergency;
   6. such action is, in our reasonable opinion, necessary to preserve the security or integrity of the OTF and/or to protect its users; or
   7. for any other reason specified in these Rules

• You may cease to be a client of the OTF by giving us not less than 5 business days’ notice in writing that you no longer wish your orders in OTF Investments to be executed through the OTF. Unless you tell us otherwise, we will execute orders for OTF Investments received after the date we specify as being the effective date for such purposes otherwise than through the OTF. If you terminate your Terms of Business, these Rules will cease to apply at the same time and you will no longer be a client of the OTF.
• From the time that your suspension or termination is effective:

1. 1. all rights and privileges terminate, including the ability of your Responsible Persons to access the OTF;
   2. you must immediately withdraw all unmatched orders submitted by you and your Responsible Persons, failing which we shall promptly cancel such unmatched orders;
   3. you will remain liable for:
      1. any contractual obligations relating to any OTF Investments entered into by you and your Responsible Persons;
      2. your and your Responsible Persons’ acts done, and omissions made, before the effective date of suspension or termination; and
      3. you and your Responsible Persons must comply with any reasonable requests for information from us in relation to your period as a client of the OTF; and
   4. any other consequences specified in these Rules may

4. Operation of the OTF

• When you give us an order to buy or sell an OTF investment, we will exercise our discretion as to whether to execute some or all of it through our OTF or by other means (Order Discretion). We may submit some or all of your order to more than one execution venue including our OTF. However, if you have specified that you want us to execute some or all of the order through the OTF, we will treat that as a specific instruction and do so. These Rules apply where the order is executed through the OTF, from the point at which your order is submitted to us as the operator of the OTF. Otherwise, the Terms of Business apply.

• Where we execute your order through the OTF, we will exercise discretion by deciding whether, when and how much of your Actionable Indication of Interest (AIOI) to match with another IOI and on what terms at a given time (Execution Discretion). We exercise this discretion on a case by case basis taking into account a number of factors that are set out in Annex I, including any other AIOI’s in the system and the different execution mechanisms that are available. The execution mechanisms could include voice trading and/or use of an electronic system to enable us to match orders. If you give us a specific instruction about how to execute the order, we will follow it if we can to the extent of the instruction, but we will exercise our discretion as to any parameters of the order that you have not You agree to us exercising our discretion at both the order level and the execution level.

• We will also exercise our discretion by deciding whether to retract some or all of your order from the We may do this where, for example, your order has been executed on another execution venue to which we submitted it or we believe a more favourable outcome would be achieved by executing some or all of your order on another execution venue. If we do this, these Rules will cease to apply once the order has been withdrawn from the OTF and our Terms of Business will apply instead.

• Once we have matched your order and/or indication of interest, we, acting in our capacity as the operator of the OTF, will enter into a transaction with both the buyer and the seller on a matched principal basis. We will not disclose your identity to the other client or liquidity provider, nor their identity to you. There is no need to do so since we will act as counterparty to both the buyer and the seller. You agree that we may enter into transactions in this way.

• Alternatively, once we have matched your order, we may effect a transaction between you and the other client or liquidity provider so that each of you is party to the transaction and has obligations to the In this case, we may act as agent for one or both of you in binding you to one another, but will not ourselves be party to the transaction. In this case, we will have to disclose your details to one another. You agree that we may also enter into transactions in this way.

• You are responsible for satisfying your own regulatory obligations under each transaction you enter into with us. Our arrangements for settlement are as set out in the Terms of Business. In relation to derivatives, this may include an obligation to exchange margin with one another in accordance with applicable law, in which case, the terms will be agreed in separate documentation. We will not submit transactions that we enter into with you to a central counterparty for clearing. You are responsible for compliance with all applicable laws in relation to transactions entered into through the OTF. [Art 18(6)] You will only transfer cash or OTF investments to us that are due and payable to us and we will not therefore hold any cash or investments in accordance with the Financial Conduct Authority’s Client Assets or Custody Where you enter into a transaction directly with another client of our OTF or liquidity provider, you will transfer cash or OTC investments directly to them or the bank or custody account which they specify.

5. Systems and controls

• We will accept orders from you by phone or electronically, in accordance with our Terms of Business, and we will negotiate between with you and others by phone or electronically, as you prefer.

• As a Voice Brokered OTF we do not accept orders generated by Algorithmic Trading.

• If you pursue a market making strategy (as defined in MiFID II) on the OTF, you may be required to enter into a Market Making Agreement with

• You will not enable (directly or indirectly) any third party to have DEA (as defined in MiFID II (2014/65/EC)) to our OTF.

• We may impose limits on the volume of or OTF investments you can enter into through the OTF, and/or price at which you can do so, and we will reject orders that exceed such thresholds and/or which are clearly erroneous. [Art 48(4)]

• We may halt or constrain trading in an OTF investment if there is a significant price movement in that investment on the OTF during a short period. We may also cancel, vary or correct a transaction that has been formed on the OTF in exceptional circumstances. [Art 48(5)]

• We may take any action we reasonably consider appropriate in relation to any issues we identify in our trading system and we may adjust, wind down or shut down the trading system if we reasonably consider it to be necessary to do so. [RTS 7 art 13(2)]

• As a voice brokered OTF, per MiFID II Art 50 and further specified in RTS 25 Art 2(2) and Art 4, the business clocks used on the OTF will be synchronised to UCT with a maximum divergence of one (1) second, and will record granularity of time to at least one (1) second. You will synchronise the business clocks you use to record the date and time of any reportable event in accordance with MiFID II and as specified in Art 50 and accompanying RTS documentation.

• You agree to comply with any procedures we may impose for physical and electronic security of our system, access to it and the data that passes through it and will take all reasonable steps to ensure that others acting on your behalf do so. In particular, you will notify us of the individuals who are authorised to act on your behalf and any changes from time to time and they will use any passwords and other user IDs that we may provide. You will be responsible for any activity that occurs pursuant to a password or user ID that relates to you. [RTS 7 art 23]

6. Monitoring

• We will monitor orders, cancellations and transactions to identify infringements, disorderly trading and conduct that may indicate market abuse or systems disruptions, including by the following means: notifications, ad hoc requests for information, audit rights, investigations, real time and ex-post monitoring

• We have arrangements in place to prevent disorderly trading and breaches of capacity limits including limits on the number of orders you may send to the OTF, mechanisms to manage volatility and pre- and post-trade controls. You agree that we may:

1. 1. request information about your organisational requirements and trading controls;
   2. suspend your access to the trading system at our or your request or the request of a competent authority;
   3. cancel unexecuted orders you have submitted on your request, where there appears to be an error or following a suspension of the financial instrument being traded;
   4. cancel or revoke a transaction in case of malfunction of the OTF’s mechanisms to manage volatility or the operational functions of the trading system;
   5. balance entrance of orders among different gateways in order to avoid collapses.

Our policies and arrangements in respect of these matters and others are available on our website [RTS 7 art 18(2)-(4)].

• If we consider that you have failed to comply with any of our Rules, we may undertake an investigation to determine whether our concern is well You will cooperate with any such investigation and provide such information as we may request. If we conclude that you have failed to comply with the rules of the OTF, we may suspend your access to the OTF and terminate your status as a client of the OTF. [RTS 7 art 7(5)]

• We are required to notify the FCA of any significant breaches of our Rules or disorderly trading conditions or conduct that may indicate market abuse, to supply them and any other relevant authority with information and to assist them in investigating and prosecuting the You agree to cooperate with us for such purpose.

• We may suspend or cease trading of a particular OTF investment through the OTF if it no longer complies with the Rules and any derivative that relates to or is referenced to it, unless such suspension or cessation would be likely to cause significant damage to the interests of our clients or the orderly functioning of the market. We will make public any decision to suspend or cease trading on our website, as well as notifying the

• We may also, in certain circumstances, be required by the FCA to suspend or remove trading of a particular OTF investment or any derivative that relates to or is referenced to it, to halt or constrain trading or to take other action that might affect your normal activity on the OTF. [Arts 17(9), 32(1) and (2) and 48(5) and RTS 18(1)]

7. Conduct obligations

• If we have categorised you as a Professional Client, we have a duty to take all sufficient steps to obtain the best possible result for you. In this case, when we exercise Order Discretion, we will act in accordance with our Execution Policy, for which the OTF will be an execution Where we exercise our Execution Discretion, Annex I will supplement our Execution Policy such that, if there is a conflict between them, we will exercise our discretion in accordance with the policy set out in Annex I, which has also been designed to achieve the best possible result. We will publish information about the quality of execution of transactions on our website in accordance with our obligations under MiFID II. [Art 27(3) MiFID II and RTS 27]

• We may combine your order with our own orders, orders of persons connected with us and orders of other clients. Such aggregation may on some occasions operate to your advantage and on other occasions to your disadvantage. [Art 28(1) MiFID II/Art 68 DR]

• For the avoidance of doubt, we execute transactions on an execution only basis and do not provide advice on OTF investments. We do not assess whether the orders you give us would result in transactions that are suitable. Given that you are not a retail client, nor do we assess whether the transactions are appropriate for Therefore, you do not benefit from the protection of FCA Rules on these issues. [Art 25 MiFID II]

• The provisions on conflicts of interest in our Terms of Business apply to the operation of the Our Conflicts Policy sets out how we identify and manage potential adverse consequences for you and others using the OTF, and for the OTF itself, of potential conflicts of interest. In particular, you should note that additional conflicts may arise when we execute your order through the OTF for the following reasons:

1. 1. we are the operator of the OTF and we charge our clients for execution of transactions through it – we could therefore be incentivised to use our OTF over another execution venue, although we will follow the terms in Annex I in making this decision;
   2. we treat each of the other users of our OTF as a client and we may owe them the same or similar obligations as we owe to you – we may therefore be limited as to how favourable a transaction we can achieve for each of you and this is why we will exercise our discretion whether or not to retract an order from the OTF;
   3. by exercising discretion as to whether to submit an order to, or retract it from, the OTF, and how to match an order within the OTF, we are necessarily making a subjective judgement about what the best transaction looks like for you – and this is why we will follow the processes set out in Annex I, as well as our overriding duty to act in your best interests. [Art 16(3) and 18(4) MiFID II]

• The costs and charges of using the OTF are as set out on the website. When we execute a transaction on the OTF with or for you, we charge both parties to the transaction in accordance with this information. [Art 48(9) MiFID II and Art 66(7) DR]. The OTF service can be provided without any other services we provide or alongside such other services as you prefer, and the costs and charges in each case are set out on the website. [Art 24(11) MiFID II)]

• You agree that all telephone and other conversations which we may have with you and electronic communications between you and us may be recorded and such recordings may be monitored. A copy of a recording can be made available to you on your request for up to five years, and on the FCA’s request for up to seven years, in each case from the date of the conversation. The recordings may also be used as evidence in the event of a dispute and such recordings will be accepted by you as conclusive evidence of instructions received from you. [Art 16(7) and Art 76 DR]

• We will provide you reports confirming details of transactions executed through the OTF in accordance with our Terms of Business. [art 25(6)M2/ Art 59 DR].

• You will provide us with such information as we may reasonably require in order to comply with our obligations under applicable law in relation to the transactions we execute with you on our OTF. You agree that we may provide any information you provide to us or we generate in connection with your use of the OTF to the FCA or any other regulator to which we are required to provide it in accordance with applicable law.

8. Transparency and transaction reporting

• We are required to publish pre-trade transparency information about orders submitted to the OTF by certain clients subject to any waivers for which we may have authorisation. Details of the waivers that we have been granted are set out on the website.

• Indicative pre-trade prices shall be determined [In line with RTS 2 Art 5.2] based upon the best available price at the time of Indicative pre-trade prices shall be disseminated to clients upon request via an voice or electronic communication system at our sole discretion.

• We are also required to publish post-trade transparency information about transactions entered into on the OTF subject to any rights to defer or limit publication. Details of the deferral waivers we have been granted are set out on our website.

• However, we may publish pre- and post-trade transparency information about orders even where we are not obliged to do so.

• Transparency information is published through the website and is free of charge 15 minutes after publication. We may disaggregate it on request.

• We will report transactions we enter into with or for you to the FCA if you are not subject to the obligation to report transactions under In order for us to do this, we require you to provide certain information to us before midday on the working day following execution. The information we need is set out on our website. If we identify that we have made an error or omission in a transaction report or we have failed to make a transaction report, we may notify the relevant competent authority and submit or re-submit it without consulting you further.

• We will not report transactions for you for any other reason so investment firms that are required to report will need to report themselves or use an Authorised Reporting Mechanism (ARM). You must notify us if you require any information to enable you to make your transaction reports. [Art 26(7) MiFIR and RTS 22 Art 15(1)(e) and (f) and Art 15(2))]

• We may not be permitted to execute a transaction for you unless we have your Legal Entity Identifier (LEI) code and this remains valid. [RTS 22 Art 13(2)]

• We may enter into contractual relationships with third party service providers to transmit transaction reporting and transparency information to the relevant competent authority and the market and may transmit such information through an ARM or Approved Publication Arrangements (APAs) or Consolidated Tape Providers (CTPs) or another provider.

Appendix I 

A1. Duty of Best Execution

MUFP will execute Client Orders either as agent or acting on a matched principal basis.

MUFP shall take all sufficient steps to obtain, when executing orders, the best possible result for its clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.

Nevertheless, where there is a specific instruction from the client MUFP shall execute the order following their specific instruction.

This means that MUFP will aim to provide best execution subject to, and taking into account, the nature of your Client Order; the prices available to MUFP in its OTF and other relevant regulated markets and trading venues; the nature of the other relevant venues; and an assessment of the Execution Factors (see section A2 below).

MUFP will, as far as possible, exercise consistent standards and operate the same process across its OTF and all relevant trading venues, clients and OTF Investments in which MUFP operates.

MUFP will execute Client Orders promptly, fairly, and expeditiously relative to other Client Orders in line with Article 27 of MiFID 2. Comparable Client Orders will be executed sequentially in accordance with the time of their reception unless the characteristics of a Client Order, the market in question or prevailing market conditions make this impossible or impractical.

A2. Execution Factors

In the absence of specific instructions from you, MUFP will exercise its own discretion in determining the factors that it needs to take into account for the purpose of providing you with the best possible result. This will include exercising its discretion (Order Discretion) as to whether to route some or all of a Client Order to MUFP’s OTF or to some other venue and exercising its discretion (Execution Discretion) as to how much of an order is matched with another order on the Mariana OTF and on what terms and at what time it will be matched.

For the purposes of delivering the best possible result where there is more than one trading venue offering to execute an order for an OTF Investment (Order Discretion), in order to assess and compare the results for the client that would be achieved by executing the order on each of the Trading venues listed in MUFP’s OTF Policy that is capable of executing that order, MUFP will take into account in its assessment both its own commissions and the costs for executing the order on the other eligible trading venues.

The Execution Factors to be taken into account by MUFP when executing Client Orders on its OTF will include but are not limited to:

• price of execution;
• costs of execution;
• speed of execution;
• likelihood of execution;
• likelihood of settlement;
• size of the Client Order;
• nature of the Client Order;
• characteristic of the Client Order;
• categorisation of the client;
• market impact; and
• any other consideration relevant to the execution of the Client Order.

These Execution Factors will be considered in relation not only to MUFP’s OTF but also in relation to other eligible trading venues. Execution and Order Discretion will be exercised on a case by case basis.

Price will ordinarily merit a high importance in obtaining the best possible result however in some circumstances we may appropriately determine that other Execution Factors are more important than price in obtaining the best possible execution result.

A3. Execution Criteria

When MUFP executes a Client Order on behalf of its clients on its OTF, MUFP will determine the relative importance of the best Execution Factors listed based on its experience and judgement with respect to available market information at the time and taking into account the following best execution criteria:

• the characteristics of the client (including its categorisation);
• the characteristics of the Client Order;
• the characteristics of the OTF investments which are the subject of the Client Order;
• the characteristics of the other eligible trading venues to which the Client Order could be directed.

A4. Trading Venues

The list of Trading venues on which we may execute a Client Order is set out below, but it is not exhaustive and will be subject to change. It includes those venues on which we place significant reliance in our aim to obtain on a consistent basis the best possible result for the execution of Client Orders. We may use one or more of the following venue types when executing a Client Order on your behalf:

• Execution across MUFP’s
• Broker execution – placing the Client Order with a third party with whom we have entered into an agreement for handling Client Orders.
• On another Trading Venue – directly with a competing Multilateral Trading Facility (MTF) or OTF (listed at A9 below)

A5. Trading Venue Selection 

Subject to any specific client instructions (see section A6 below), the selection of an Trading venue for the execution of a Client Order will be based solely upon the Execution Criteria and Execution Factors referred to above.

However, the decision to use any of the venues set out in section A4 may also be influenced by other additional criteria, although this is always conditional upon obtaining the best possible result for our clients.

These additional criteria include:

• financial screening;
• suitability of counterpart;
• liquidity concentration;
• competitiveness of commission rates and spreads;
• promptness of execution;
• quality of service; and
• creditworthiness and reputation.

Notwithstanding the above, MUFP reserves the right to execute a Client Order using a method or venue other than the methods or venues that we have indicated, where we consider this to be in the best interests of our client.

A6. Trading Venue Selection

Where you give MUFP a specific instruction for the execution of a Client Order (including an instruction for your trade to be executed on a particular venue) then the Client Order will be executed in accordance with your instructions. You should be aware that providing that instruction may prevent us from taking some of the steps set out above to obtain the best possible result for the execution of that Client Order (to the extent of the instructions). MUFP will be deemed to have taken all sufficient steps to provide the best possible result for you in respect of the Client Order, or aspect of the Client Order covered by your specific instructions.

Note that when you place a Client Order directly into a Trading venue via a direct brokerage system your Client Order will be classified as a specific instruction and the best execution provisions will not apply.

A7. Order Handling

Client Orders in OTF Investments may be aggregated with other Client Orders, if:

• the characteristics of the Client Orders make them suitable for aggregation; and
• in our opinion the aggregation of Client Orders will not work to the disadvantage of any client and we comply with our order allocation procedures.

Execution quality of Client Orders will be monitored internally by MUFP in accordance with standards required in applicable regulation.

A8. Transparency, Monitoring and Review 

We will publish pre-trade transparency information about orders submitted to our OTF, subject to any waivers we might have.

We will publish post-trade transparency information about transactions entered into on our OTF subject to any rights to defer or limit publication. Details of the deferrals we have been granted are set out on our website.

Transparency information will be published through our website 15 minutes after publication and is free of charge. We may disaggregate it on request.

We will publish information about the quality of execution of transactions on our website in accordance with MiFID II, Article 27(3) and RTS 27.

We will monitor the effectiveness of our order execution policy and execution arrangements to identify and where appropriate correct any deficiencies and we will review this OTF policy at least annually and whenever a material change occurs that affects our ability to continue to obtain the best results for clients of our OTF. Any material changes will be posted on our website.

A9. Trading Venues

MUFP may execute trades on other venues rather than on its OTF in order to achieve the best possible result for its clients. The other eligible venues are:

TBC once other venues have received approval.

Appendix II

Glossary of Terms

Client Orders – an instruction to buy or sell an OTF investment.

FCA – Financial Conduct Authority.

OTF – Organised Trading Facility; a multilateral system which is not a regulated market or MTF in which multiple third party buying and selling interests in bonds, structured finance product, emissions allowances or derivatives are able to interact in the system in a way which results in a contract.

OTF Investments – Financial instruments admitted to trading on the OTF, as listed in section 1 and on MUFP’s website.

MiFID II – the directive 2014/65/EU – the Markets in Financial Instruments Directive 2.

RTS – Regulatory Technical Standards, supplements to MiFID II directives.

Professional Clients – as per Annex II of MiFID.

Matched Principal Trading – a transaction where the facilitator interposes itself between the buyer and the seller to the transaction in such a way that it is never exposed to market risk throughout the execution of the transaction, with both sides executed simultaneously, and where the transaction is concluded.

OTC Investment – Over the Counter Investment

Pre- and Post-Trade Transparency Reporting – near real-time broadcasts of trade data for price formation and operation of best execution obligations. These are reported via trade reporting venues from where they are disseminated to the market.

Transaction Reporting – T+1 reporting of transactions via an Approved Reporting Mechanism (ARM) with information primarily to assist regulating authorities to detect market abuse.