Execution Policy.pdf

EXECUTION POLICY

1. SCOPE

This policy sets out the procedures and principles that Tesseract Investment Ltd complies with when receiving orders for crypto assets from clients and when transmitting them for execution. With the help of these procedures and principles, Tesseract strives to ensure that orders are executed in the best possible way from the perspective of its clients. Tesseract may also execute orders for crypto assets on an OTC basis or on trading platforms. The same principles shall apply to the reception and transmission of orders when providing portfolio management.

2. KEY LEGISLATION

• Markets in Crypto-Assets Regulation of the European Union

3. EXECUTION OF TRANSACTIONS

3.1 Crypto assets

Tesseract Investment accepts orders for pre-determined list of crypto assets only. This list will be amended from time to time at Tesseract Investment’s discretion. Current list of available assets can be found at Tesseract Investments website at www.tesseract.fi

3.2 Brokers

The brokers used by Tesseract Investment are listed [in Appendix 1]. The brokers shall execute the orders in accordance with their own best execution policy. The broker may transmit the order for other broker, market makers and other liquidity providers in addition to the main marketplaces.

3.3 OTC trading

If Tesseract Investment executes a client's order as a bilateral trade (OTC) outside regulated marketplaces, Tesseract shall consider the following factors in order of priority when executing the order and when selecting the execution method and OTC counterparty:

1. the price
2. the costs
3. the speed of execution of the order
4. the probability of execution and settlement of the order
5. the size and nature of the mandate
6. the conditions of custody
7. the characteristics of the crypto assets.

Tesseract Investment may conduct OTC transactions with its affiliate group companies in cases where it is beneficial for the client and in accordance with its avoidance of conflict of interest policy.

3.4 Trading Platforms

Tesseract Investment may also use trading platforms to execute an order.

Trading platforms include

• Crypto asset exchanges which operate under a license and are centrally managed, similar to traditional stock exchanges.

• Decentralized finance protocols which operate as non-regulated decentralized financial applications, with protocol specific rules and governance arrangements.

Current list of trading platforms is available to Tesseract Investment clients on request.

3.5 Specific instructions

If the client gives specific instructions regarding the order, Tesseract will primarily follow the instructions given by the client and forward the order as such for execution in accordance with the client's instructions. Specific instructions given by the client may prevent or restrict the broker from complying with their best execution policy and thus from achieving best possible result for the client.

When the client gives specific instructions, the client is deemed to be aware, for example, of a higher counterparty risk. Also in OTC trading, specific instructions given by the client may prevent the achievement of the best possible result for the client.

Tesseract may give specific instructions to brokers regarding execution of portfolio management related transactions. Such specific instructions may prevent or restrict the broker from complying with the best execution policy and thereby achieving the best possible result for the client. As a rule, specific instructions issued by Tesseract are expressly aimed at achieving the best result for the client.

3.6 Aggregation of orders

The brokers used by Tesseract may execute the order in tranches using one or more trading venues or execution methods. Brokers may aggregate the order either with orders from other clients or with their own transactions. Aggregation is only possible when the broker considers it unlikely that the aggregation would be detrimental to the client. However, in some cases, aggregation may be disadvantageous to the individual mandate or to the client's interest. Tesseract may also aggregate client orders before forwarding them for execution. Such aggregation is only possible when Tesseract considers it unlikely that the aggregation would be detrimental to the customer.

3.7 Exceptional circumstances

In exceptional circumstances, such as the failure of trading platforms or trading systems, the brokers used by Tesseract may deviate from their best execution policy or orders will be difficult or impossible to execute. In such cases, Tesseract will take reasonable efforts such as using another broker to allow for execution of the order. In cases, where the order can not be executed with reasonable effort, Tesseract may, at its discretion, also cancel the order.

4. BROKER SELECTION

Tesseract considers the following factors when selecting the brokers:

1. The brokerage firm is a crypto asset service provider that has implemented an execution policy that aims to achieve the best possible result for the client determined by the total consideration.

2. The brokerage firm has access to several regulated marketplaces.

3. The brokerage firm has ranked the factors relevant to the total consideration in such a way that Tesseract considers that the brokerage firm is likely to achieve the best possible result for the client.

The following factors have also been considered:

1. Tesseract has previous experience of the brokerage firm as reliable executors of orders.

2. The orders have been executed without delay and there have been no problems with the settlement of the transactions.

3. The costs associated with the execution and settlement of the transactions have been in line with Tesseract’s expectations.

5. TRADING PLATFORM SELECTION

Tesseract considers the following factors when selecting the trading platforms:

1. Liquidity and operational history

2. And in the case decentralised finance protocols the probability of a technical fault or other unavailability (jointly “Fork”)

6. EVALUATION OF THE QUALITY OF EXECUTION

Tesseract shall access the quality of the execution on regular basis.

7. REVIEW

This Policy is approved by the company's Board of Directors. The appropriateness of the policy will be reviewed on annual basis.