Interactive Brokers UK, Ltd.: Top 5 Venue Annual Report for Year 2018

Annual Report on the Execution Quality Obtained on all the Execution Venues Used by Interactive Brokers (U.K.) Limited and the Top Five Venue and Entities for each Instrument Class

To enable our clients and the public to evaluate the quality of Interactive Brokers (U.K.) Limited (IBUK)'s execution quality and to identify the top five execution venues in terms of trading volumes where IBUK executed client orders in the preceding year, IBUK publishes information in relation to trading venues, market makers or other liquidity providers or any entity that performs a similar function outside the European Economic Area (EEA). The annual report is made available on our website on 30 April.

Summary on the Execution Quality Obtained on all the Execution Venues Used by Interactive Brokers (U.K.) Limited

IBUK provides to its clients self-directed execution-only electronic brokerage services. The orders clients submit to IBUK through the Interactive Brokers Group's ("IB Group") trading platforms are executed by IBUK on their behalf by electronically routing them to markets or dealers using IB Group's proprietary order routing technology ("SmartRouting").

Relative Importance of Execution Factors

SmartRouting takes into account the relative importance of each of the execution factors as depends on:

• the characteristics and nature of the order, including any specific instructions a client might have given;
• the characteristics of the financial instruments that are the subject of an order; and
• the characteristics of the execution venues (if there is more than one) to which the order can be directed.

IBUK's order execution arrangements do not differ according to client categorization. The execution factors are applied on a trade-by-trade basis taking into account whether the order is marketable or not. A marketable order is a buy order with a price at or above the lowest offer in the market or a sell order with a price at or below the highest bid in the market.

For marketable orders, the primary execution factor is either total consideration or price depending on your instruction. The total consideration represents the price of the financial instrument and the costs related to execution ("external cost"), which include all expenses incurred by the client which are directly related to the execution of the order, including execution fees, clearing and settlement fees and other fees paid to third parties involved in the execution of the order.

For non-marketable orders, the primary execution factor for clients on a fixed commission structure (which covers all external costs) is likelihood of execution. The primary execution factors for clients on a tiered commission structure (where clients pay for external costs) are typically a blend of cost and likelihood of execution.

Both in the case of marketable and non-marketable orders, the remaining execution factors - order size, nature of the order and any other consideration relevant to the efficient execution of you order - are generally secondary and applied where they may optimise the primary factors.

Close links

Our arrangements for best execution are designed to ensure that IBUK acts in its clients' best interests regardless of any other interests.

Where IBUK routes a client order and relies on a third party to access a venue, this is usually carried out through an IBUK affiliate. Any IBUK affiliate receiving a client order does not levy any additional charge on the client. IBUK's standard charges apply as disclosed without any additional mark-up imposed by IBUK. For certain execution venues, IBUK may rely on a broker outside of the IB Group. For the purposes of execution with respect to the client accounts carried by IBLLC, it is IBLLC which decides the order routing and directs the orders to IBUK, Timber Hill Europe ("THE") or another external broker that is a member of an exchange

IBUK and its affiliate, THE, have been the liquidity providers for forex contracts for difference (CFDs) and stock CFDs respectively. Our clients' forex CFD orders are filled at the spot forex rates IBUK obtained on the market and; similarly for the stock CFD orders, our clients' CFD orders are filled at price of the hedge order in the underlying stock. For Over-the-Counter products ("OTC") products, our clients may utilize the client interface to check the price of the underlying financial instrument. The CFD price shown to our client is the current market price for the underlying (i.e. market data for CFDs and stocks are identical) and CFD and stock orders are executed exactly the same way.

Venue Selection

IBUK places significant reliance on automated venues where our SmartRouting can constantly review the bids and offers at each of the available venues and execute at the greatest speed and with the highest level of accuracy and certainty of completion.

In the year 2018, IBUK started routing to CITADEL which fills client orders inside the bid/ask spread and at no execution cost chargeable by CITADEL to the client.

 

Assessment Summary

Equities - Shares & Depositary Receipts

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Debt Instruments: Bonds

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Debt Instruments: Money Markets Instruments

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Interest Rates Derivatives: Futures and Options Admitted to Trading on a Trading Venue

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Interest Rates Derivatives: Swaps, Forwards and Other Interest Rates Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Credit Derivatives: Futures and Options Admitted to Trading on a Trading Venue

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Credit Derivatives: Other Credit Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Currency Derivatives: Futures and Options Admitted to Trading on a Trading Venue

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Currency Derivatives: Swaps, Forwards and Other Currency Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Structured Finance Instruments

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Equity Derivatives: Options and Futures Admitted to Trading on a Trading Venue

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Equity Derivatives: Swaps and Other Equity Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Securitized Derivatives: Warrants and Certificate Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Securitized Derivatives: Other Securitized Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Commodities Derivatives and Emission Allowances Derivatives: Options and Futures Admitted to Trading on a Trading Venue

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Commodities Derivatives and Emission Allowances Derivatives: Other Commodities Derivatives and Emission Allowances Derivatives

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Contracts for Difference: Stock Underlying

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Contracts for Difference: Index Underlying

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Contracts for Difference: Cash Underlying

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Exchange Traded Products (Exchange Traded Funds, Exchange Traded Notes and Exchange Traded Commodities)

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Emission Allowances

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients

Other Instruments

The Top Five Execution Venues to which Client Orders were Routed

IBUK-Executed Orders, Retail Clients

IBUK-Executed Orders, Professional Clients

The Top Five Entities to which Client Orders were Routed

IBUK-Transmitted Orders, Retail Clients

IBUK-Transmitted Orders, Professional Clients