BofA Securities

Information on Singapore Best Execution for Fixed Income, Currencies and Commodities


This document provides a summary of the principles and practices adopted by BofA Securities (“BofA”) when executing an order for the purchase or sale of any FICC Capital Markets Product on behalf of a Singapore Customer where the order is either (a) executed by a  sales or trading employee of a BofA Singapore Entity or (b) where the order is booked to a BofA Singapore Entity.


For the purposes of this document:

  • “FICC Capital Markets Products” means capital markets products that fall within the definition of securities (including structured notes, repos and reverse repos), derivatives contracts and units in a collective investment scheme (including ETFs) under the Act. For the avoidance of doubt, equities, loans, deposits and FX spot transactions are not “FICC Capital Markets Products” and are not covered by this document.
  • “Singapore Customer” means a customer of a BofA Singapore Entity which has been classified by BofA as either an accredited investor or an expert investor.
  • A “BofA Singapore Entity” means any of Merrill Lynch (Singapore) Pte. Ltd., Bank of America Singapore Limited or Bank of America, N.A. (Singapore Branch).
  • “Accredited investor” has the same meaning as in section 4A of the Securites and Futures Act of Singapore (the “Act”).
  • “Expert investor” has the same meaning as in section 4A of the Act.


Pursuant to the “Notice on Execution of Customers’ Orders” (the “Notice”) issued by the Monetary Authority of Singapore (“MAS”) and related guidelines, “capital markets intermediaries” (as defined in the Notice) which (either directly or through its agent) places, executes, or both, as the case may be, customers’ orders for the purchase or sale of any capital markets products must establish and implement written policies and procedures that are commensurate with the nature, scale and complexity of its business:

  • to place and execute customers’ orders on the best available terms; and
  • to place or execute, or both, as the case may be, comparable customers’ orders in accordance with the time of receipt of such orders.

Scope & Application

Unless otherwise specified, the principles and practices relating to best execution outlined in this document apply where BofA executes an order in a FICC Capital Markets Product facing Singapore Customer where (a) the order has been executed by a  sales or trading employee of a BofA Singapore Entity; or (b) the order is booked to a BofA Singapore Entity.


BofA will be deemed to be executing a customer’s orders in a FICC Capital Markets Product:


  • when it is acting on behalf of a customer;
  • when it carries out an order for a customer on a back-to-back principal basis (i.e. when BofA buys a FICC Capital Markets Product from a third party (or the customer) and then sells the same FICC Capital Markets Product to the customer (or a third party) without taking any market risk); or
  • generally, when it is acting as principal in transaction and where the customer is relying on BofA to protect its interests (taking into account the criteria outlined in section 4(c) below) in relation to the pricing or other elements of the transaction (which may include the hedging of such transaction).


Where a BofA desk is required to pass the order to a different BofA desk, the BofA desk which ultimately executes the trade is required to take sufficient steps to achieve the best possible outcome for the customer. The BofA desk passing the order must ensure that the executing desk receives such information as is necessary in order for the executing desk to be able to provide best execution if required.

When does best execution not apply (or apply only on a limited basis)?

Best execution obligations do not apply (or apply only on a limited basis) in the following situations:

  • Executing orders on behalf of customers other than a Singapore Customer:

    The principles and practices relating to best execution outlined in this document do not apply in either of the following scenarios:

    1. BofA executes an order with a customer other than a Singapore Customer; or
    2. the order is neither booked to a BofA Singapore Entity nor executed or placed by a sales or trading employee of a BofA Singapore Entity.
  • Specific instructions:

    Where a customer provides specific instructions in respect of all aspects of the execution of an order and BofA follows such specific instructions in executing the order, best execution will be deemed to have been satisfied.

    Where not all aspects of execution are covered by the instruction, the best execution obligation will apply to any other parts or aspects of the order that are not covered by such instruction. BofA will execute the order to obtain the best possible result in light of the instruction, although any specific instruction may lead or necessitate BofA to reconsider the degree of importance attached to the Execution Factors and the execution venues (where applicable), each as described below in sections 6 and 7. In such situations, BofA may be prevented from taking the steps it has designed and implemented to obtain best execution in respect of the elements covered by those instructions.

  • Non-reliance by counterparty

    BofA will not provide best execution in respect of transactions entered into on a principal basis where the counterparty is not relying on BofA to protect their interests. BofA will determine whether there is reliance by taking into account the following criteria:

    • Does customer initiate the transaction?
    • Is it a market convention for customers to “shop around”?
    • Is it a relatively transparent market?
    • Is disclosure made to customer that no best execution is provided?

    The above criteria will be taken into account collectively on a weighted basis by BofA when determining whether the customer is legitimately relying on BofA to provide best execution. Generally, where the answers to first three criteria are “yes”, best execution will not be provided and this letter shall be deemed as notification that best execution is not provided in such circumstances.


    Inter-affiliate transactions which are not related to executing customer orders are also considered out-of-scope for the purposes of best execution.

  • Portfolio compression

    When executing transactions as part of a portfolio compression exercise, which involves the termination and replacement of the component derivatives, BofA will not be subject to best execution.

  • How does BofA satisfy the best execution obligation?

    This document summarizes BofA’s practices in satisfying the requirement to obtain the best possible result for its customers.


    In practical terms, this means that the various Execution Factors outlined in section 7 below will be considered by BofA when selecting execution venues, trading strategies or trading parameters in order to deliver best execution. In the event that BofA is executing a complex product (i.e. the instrument is made up of more than one component) on behalf of a customer, best execution would be assessed by reference to the overall product rather than by reference to each constituent part or component individually.

What are the execution venues?

Where best execution applies, customer orders may be executed, routed or placed via the following different types of venues available to BofA:

  • regulated public exchanges;
  • swap execution facilities (“SEFs”) that operate under the regulatory oversight of the United Stated  Commodity Futures Trading Commission, or global equivalents; or
  • broker dealers, third party brokers and market makers (which may be affiliates of BofA or third parties).


The venues used by specific businesses will be determined by the requirements of the business and the specific FICC Capital Markets Product being traded.


Except in situations identified in section 7 (where Execution Factors other than price will be taken into consideration), BofA will select an execution venue based primarily on the availability of best pricing for a particular FICC Capital Markets Product and the amount of accessible liquidity offered by the execution venue. BofA will consider the overall technical and operational offering of a venue – including connectivity, speed of execution, reliability, rule set and membership and clearing requirements. For certain instruments there may only be one execution venue available – in executing a trade in such circumstances BofA will assume that the selection of that venue where applicable satisfies the best execution consideration dealing with venue selection.


In handling customer instructions, BofA will take all reasonable steps to monitor execution outcomes and, where applicable, to obtain multiple quotes. In the absence of multiple quotes, BofA will obtain sufficient pricing information on a best efforts basis, however, this may not be possible; e.g. when pricing illiquid products (including distressed assets).


BofA will not receive any remuneration, discount or non-monetary benefit for routing customer orders to a particular trading venue or execution venue which would ultimately be to the detriment of the customer.


BofA will, on a regular basis, review the execution venues of which BofA is a member of or has access to/sends orders to (including third party brokers and its affiliates) to ensure that the use of such venue, broker or affiliate and the manner in which they are accessed continues to deliver the best possible result for BofA’s customers.

Execution factors

In general, BofA takes all reasonable steps to obtain the best possible result for its customers when handling and executing customer orders. Factors which BofA takes into consideration when executing customer orders with the aim of achieving the best possible result for customers on a consistent basis include:


  • price;
  • likelihood of execution;
  • size of the transaction;
  • costs (implicit and explicit);
  • speed of execution;
  • nature of the order; and
  • any other considerations relevant to the execution of an order, e.g. prevailing market conditions in the instrument,


             (each, an “Execution Factor” and together, the “Execution Factors”).


The importance of each Execution Factor in the execution process will vary relatively depending on the FICC Capital Markets Product being traded, the type of customer, the characteristics of the customer order, the expressed preferences or instructions from the customer, the customer’s objectives and the nature of the markets or execution venues available to BofA. Generally, in respect of liquid FICC Capital Markets Products traded under normal market conditions and in an average size or volume, “price” will be prioritized as an Execution Factor.


The relative importance assigned to the various Execution Factors may vary for illiquid instruments, or where market conditions are not normal, or for specificities applying to a particular trade for the market concerned including factors beyond those listed above. For example, where BofA executes orders in illiquid products (including distressed assets), Execution Factors other than price (such as “likelihood of execution”) may be prioritized.


The receipt of specific instructions may also affect the relative importance assigned to the various Execution Factors. 

Use of brokers (including BofA affiliates and third party brokers)

BofA may execute customer orders via another broker, including an affiliate of BofA or a third party broker, for a number of reasons, including but not limited to the following:


  • the customer may want to place an order in a market where BofA is not a member; or
  • a system error or limitation exists which may prevent the BofA trader from going to the venue directly.


The obligation to provide best execution applies to all types of FICC Capital Markets Products. Therefore, BofA will require its affiliates and other third party brokers to evidence that they are providing BofA with best execution on a consistent basis in line with any requirements under the BofA best execution framework and considering the protections offered by equivalent regulations in relevant jurisdictions.

Is there a requirement to demonstrate best execution?

At a customer’s request, BofA will demonstrate that it has executed the customer’s orders in accordance with this document. Customers should note that, as described in this document, best execution will not be provided in respect of all transactions or orders. Where best execution is provided, “price” may not be the Execution Factor prioritized. In addition, pricing information may not always be available in respect of a particular FICC Capital Markets Product or in certain market conditions. 

Governance and review process

BofA maintains a FICC-specific governance forum to review, on an ongoing basis, BofA’s governance framework and order execution arrangements in Singapore, covering relevant policies, procedures, systems, reporting and the scope of the best execution obligation.