Updated on: 20 August 2025
INTRODUCTION
1.1 This Best Execution Policy (“Policy”) sets out information relating to how Lexim Trading DMCC (“Lexim”) seeks to provide the best execution as required by the Virtual Assets Regulatory Authority (“VARA”) when executing Orders on behalf of clients.
1.2 “Best Execution” is the term used to denote the duty that Lexim has to take all sufficient steps and exercise reasonable diligence to obtain the best possible result under the relevant circumstances when executing transactions on behalf of Lexim’s clients.
1.3 Lexim owes its clients a duty to seek best execution when it executes trades on clients’ behalf in the types of virtual asset set out in this Policy.
SCOPE
2.1 This Policy covers trading by Lexim in any of the virtual assets listed on Lexim’s platform as per its Virtual Asset Standards and Listing Policy.
2.2 This Policy does not apply to situations where Lexim is providing another virtual asset service provider (“VASP”), or a Qualified Investor or an Institutional Investor with a quote to execute at Lexim’s discretion, whether Lexim is executing the Order on behalf of a client or on its own account.
APPLICATION OF EXECUTION FACTORS
3.1 When executing an order on behalf of its client, Lexim will take all reasonable steps to achieve the best possible result for the client. While the best possible results usually could be regarded as equal to the best possible monetary outcome (i.e., price and cost), the result for the client is also impacted by other factors, with the relative importance of these factors likely to vary on a case-by-case basis. The following factors are in general understood to have an impact on the best possible result for a client (“Execution Factors”), specifically in the context of orders relating to virtual assets:
(a) Price of the virtual asset (excluding costs);
(b) costs of the order (i.e., all expenses incurred by the client which are directly related to the transmission of the order);
(c) execution speed;
(d) size of the order;
(e) likelihood of execution and settlement (i.e., completion);
(f) execution venues available; and
(g) nature of the order;
(h) any other consideration relevant to the execution of orders, which may include, but are not limited to, low liquidity and/or high volatility.
3.2 The relative importance of the Execution Factors will vary on a case-by-case basis and may be determined by reference to:
(a) the characteristics of the client;
(b) the characteristics of the client order;
(c) the characteristics of the virtual assets that are the subject of that order; and
(d) the characteristics of the execution venues to which the order can be directed and their trading status, referred to as the "Execution Criteria". Given the nature of the market for virtual assets, Lexim considers 'price', 'costs' and 'speed' as the main Execution Factors that it should fulfil in order to ensure best execution.
3.3 In circumstances where market disruption impairs the reliability of Lexim's execution quality assessment, Lexim will use its commercial judgement and experience in the light of available market information and market conditions at the relevant time in order to achieve the best balance across the Execution Factors.
3.4 Lexim will maintain comprehensive documentation of its compliance with this Policy for how client Orders are executed in conformance with the Best Execution standards.
3.5 Lexim will maintain an adequately resourced Trading department assigned to execute client Orders and ensure continuous compliance with Best Execution requirements under Part II of the Broker-Dealer Services Rulebook. The absence of such a department or insufficient resourcing shall not be considered a justification for failing to comply with execution requirements.
3.6 Selection of the Best Market & Execution in the Absence of Pricing Information
(a) Selection of the Best Market: In the absence of specific instructions from a client, Lexim shall take the steps outlined at Clauses 6.1-6.4 to select an execution venue for the relevant order.
(b) Execution in the Absence of Pricing Information: Where there is an absence of pricing information, market drivers, or clear valuation factors for a particular Virtual Asset, Lexim will:
i. Use a reasonable and documented methodology to determine fair pricing based on available market data, order book depth, and historical price trends.
ii. Conduct an internal review to assess execution viability and avoid potential price manipulation risks.
iii. Ensure full transparency with clients regarding pricing limitations and the methodology used.
(c) Execution Where Multiple Quotations Exist: Where multiple pricing sources provide quotations for a Virtual Asset, Lexim will:
i. Evaluate quotations based on liquidity, market depth, and counterparty reliability.
ii. Prioritise execution on the Market that offers the best price-quality combination, considering factors such as speed, likelihood of execution, and settlement risks.
iii. Maintain records of all available quotations and the rationale behind the final execution decision.
(d) Execution During Market Disruptions:
(e) In the event of a sudden market disruption where liquidity is significantly impaired or pricing becomes erratic, Lexim shall:
i. Immediately assess whether the impacted Market continues to support reliable execution;
ii. Suspend or reroute execution from Markets deemed to be unstable, until normal operations resume;
iii. Notify clients where material impact to order execution is expected; and
iv. Document all incidents of market disruption and Lexim’s response actions as part of its compliance record, subject to audit and regulatory review.
(f) Documentation and Compliance: Lexim will maintain comprehensive documentation of its selection of the best Market, execution process, and handling of pricing uncertainties. These records will be subject to periodic review and internal audits to ensure ongoing compliance with this Policy and VARA's Best Execution requirements.
CLIENT SPECIFIC INSTRUCTIONS
4.1 If the client provides Lexim with a Specific Instruction in relation to an Order, Lexim will follow that instruction so far as is reasonably possible when executing the trade. By following the client’s Specific Instruction, Lexim will have satisfied the obligation to provide the client with Best Execution in relation to that transaction or in relation to the part or aspect of the Order to which the client’s instructions relate.
4.2 If Lexim receives an unsolicited Specific Instruction to route that client’s Order to a particular Market or counterparty, Lexim does not have the obligation to make a determination of Best Execution beyond the client’s Specific Instruction, provided Lexim has processed the client’s Order promptly in accordance with the Specific Instructions.
4.3 Where a client provides Lexim with a specific instruction in relation to the execution of an Order, Lexim will, insofar as reasonably possible, execute the Order in accordance with those instructions. Clients should note that any such instruction may prevent Lexim from taking the steps set out in this Policy to obtain the best possible result in respect of the elements covered by that instruction. Lexim will not accept or act upon any client instruction that would result in, or could reasonably be considered to result in, market abuse, price collusion, or any conduct that contravenes Applicable Law. Any direct matching of Orders will occur only through permitted trading venues or third-party service providers operating under transparent execution rules, and not through pre-arranged bilateral dealing. For any elements of an Order not covered by specific instructions, Lexim will continue to apply this Policy and act in accordance with its obligation to achieve the best possible result for clients.
ORDER HANDLING
5.1 Client Orders will be handled promptly, fairly, and expeditiously. Orders will be executed in the sequence they are received unless the characteristics of the Order or prevailing market conditions make this impractical. Lexim will ensure that competing Orders do not improperly influence client Orders.
5.2 When executing client Orders, Lexim will disclose to clients, both before execution and in the trade confirmation, the portion of the amount payable by the client that the firm retains as fees or commission for the trade.
5.3 Lexim shall not pay or receive any monetary or non-monetary benefits, including any form of reciprocation for services or business, to or from any third party in connection with its execution services provided to clients, except for necessary service fees required to execute the client’s Order.
5.4 Lexim shall not:
(a) receive any remuneration, discount, or non-monetary benefit for routing client Orders to a particular trading venue or another entity; or
(b) engage in any practice that may incentivise Lexim to prioritise its own interest or the interests of a third party over the Best Execution of the client’s Order.
5.5 Any fees payable to or by another VASP or third party shall be structured to avoid conflicts of interest in executing client Orders. Lexim will ensure that these arrangements do not compromise its duty to act in the best interests of its clients and will implement adequate controls to manage potential conflicts of interest.
5.6 Lexim shall not use, pledge, transfer, or otherwise deal with client money or assets for its own account or the account of any other client, except as expressly permitted under Applicable Law or in accordance with the client’s explicit instructions. Client money and assets will be handled strictly in line with Lexim’s regulatory obligations, safeguarding arrangements, and custody requirements.
ORDER ROUTING
6.1 Currently, Lexim acts as the sole execution venue for all virtual assets traded on its platform (specifically, DAU and KBAR) as these assets are only available for trading through Lexim. As a result, all client orders are executed internally.
6.2 While not currently envisaged, Lexim may in future route client orders to an external execution venue included on a list maintained by Lexim of eligible venues. All entities included on Lexim's list of eligible venues will be subject to a structured due diligence process to ensure that the venue enables Lexim to comply fully with its obligations under this Policy and all applicable laws and regulations when transmitting orders for execution.
(a) As part of this due diligence process, Lexim will consider and assess factors such as the venue’s regulatory status, compliance history, execution quality, and operational and technical capabilities.
(b) The extent of the due diligence process will be determined by a risk assessment of the execution venue, and both enhanced due diligence measures and a process of escalation and sign off by senior management may be utilised where venues are assessed as higher risk.
(c) The verification and monitoring procedures specific to the trading venue will be informed by the risk assessment and adapted accordingly. If Lexim becomes aware that at any stage that a venue on its list has failed to meet Best Execution obligations, Lexim shall immediately escalate the matter to the Compliance Officer and suspend further routing of client orders to that venue pending investigation. Where material breaches are confirmed, Lexim will notify the client and provide alternative routing options.
(d) The due diligence process will also be used to identify risks or potential execution quality differences additional to, or specific to, execution on that venue which require disclosure to the client in advance of any execution of that client's orders being performed on that venue.
6.3 Execution venues assessed and approved for use by Lexim may include appropriately authorised:
(a) Centralised exchanges;
(b) OTC trading desks;
(c) Market makers; and
(d) other liquidity providers.
6.4 When selecting from its list of eligible venues, Lexim will, taking account of the Execution Criteria, select the Execution Venue expected by Lexim to provide the best possible result for the client for that particular order.
6.5 In the future, Lexim may initiate a mechanism of routing client Orders to other entities for execution on an automated, non-discretionary basis. If Lexim routes its Order flows to another entity, which has agreed to handle the Order flow as an agent for the client, Lexim may rely on that entity’s regular and rigorous review of execution quality, provided that:
(a) The executing entity provides full disclosure of the rationale and methodology behind its execution quality review; and
(b) Lexim determines that the entity’s review meets the required standards of Best Execution and supports the entity’s ability to act in the best interest of the client.
6.6 Where Lexim routes client orders to other entities for execution on an automated, non-discretionary basis or internalises client order flows, it shall conduct a quarterly review of the execution quality received by its clients. This review shall:
(a) assess how the execution quality compares with the execution quality Lexim may have obtained from other available markets or sources of liquidity; and
(b) identify any material differences in execution quality across Virtual Assets traded.
All quarterly execution quality review results shall be made available to VARA upon request.
6.7 For the purposes of Clause 6.6:
(a) execution quality will be determined by reference to the Execution Criteria set out at Clause Error! Reference source not found. above; and
(b) the 'internalisation' of client orders means the execution of client orders by Lexim either by matching such orders against its own internal inventory or by matching them against other client orders within Lexim, rather than routing the orders to external execution venues. Lexim will only internalise a client order where doing so would achieve the best possible result for the client. While Lexim may consider a range of factors in determining the best possible result, this will typically mean that orders are only internalised where the price and costs (or absence of costs) are equal to or better than those available to the client on alternative execution venues.
6.8 Client-Directed Order Routing: Where a client specifically requests that their order be routed to a particular execution venue or VASP, Lexim will:
(a) clearly inform the client, by means of a notification made visible to the client on Lexim’s online platform, of the relevant execution quality risks associated with their request, including the possibility that Lexim may be unable to apply the procedures and safeguards described in this Policy that are designed to achieve the best possible results for the client; and
(b) only proceed with routing the order in accordance with the client’s instructions if, after receiving this risk disclosure, the client provides Lexim with confirmation that they wish to proceed despite the identified risks. Such confirmation will be provided by the client clicking an acknowledgement button or similar prompt on Lexim’s online platform. Upon receipt of such confirmation, Lexim will process the order promptly and in line with the client’s instructions.
For the avoidance of doubt, Lexim is not required to make a best execution determination in the circumstances outlined in this Clause 6.8.
6.9 Order Routing Transparency and Disclosure: Lexim shall ensure full transparency in its order routing practices by:
(a) Providing clear disclosures to clients regarding its execution methodology and order routing criteria.
(b) Maintaining records of all order routing decisions, including justifications for selecting a particular execution venue.
(c) Ensuring that all execution data is available for regulatory review upon request.
6.10 Prohibited Arrangements: Lexim shall not enter into any arrangement with another VASP where it is aware that the initiating VASP has failed to comply with Part II of the Broker-Dealer Services Rulebook.
6.11 Evolving Regulatory Landscape and Market Practices: Lexim recognises that market structure and regulatory norms in the crypto asset space are still evolving. Therefore, the firm will remain adaptive in refining its venue selection and execution protocols, based on new guidance from VARA and global best practices. Material updates will be documented and incorporated into this Policy accordingly.
6.12 Where Lexim routes client Orders to another entity for execution, Lexim shall remain responsible for ensuring compliance with its Best Execution obligations under this Policy and the Broker-Dealer Services Rulebook, except where the client has provided a Specific Instruction under Clause 3.1. In such cases, Lexim’s responsibility shall be limited to executing the client’s Specific Instruction promptly and in accordance with the client’s direction.
PLACING AND DISTRIBUTING VIRTUAL ASSETS
7.1 Lexim, when providing services to an issuer or in connection with the placing of virtual assets with investors, shall establish and maintain written controls to prevent, monitor, manage, and disclose any conflicts of interest that may arise during the placement process. For the purposes of this Clause 7, the "placing" of Virtual Assets shall include any marketing conducted by Lexim for or on behalf of the Issuer of the Virtual Assets, as well as the actual sale or placement of those assets to investors.
7.2 These controls shall include specific procedures to address potential conflicts when placing virtual assets with Lexim’s own clients, particularly regarding:
(a) Pricing of the initial placement – Ensuring that pricing methodologies are transparent, consistent, and free from manipulation or preferential treatment.
(b) Allocation of virtual assets – Preventing unfair allocations or preferential treatment for certain clients or investors.
(c) Internal review and oversight – Implementing a governance process to assess and mitigate any potential conflicts before finalising a placement.
(d) Disclosure requirements – Providing full transparency to investors and relevant stakeholders regarding potential conflicts in the placement process.
7.3 Prior to agreeing to the sale of newly issued virtual assets to any client or investor, Lexim shall disclose the following to the counterparty and, where required, obtain consent from the issuer allowing Lexim to make such disclosures:
(a) The basis on which Lexim is acting for the issuer, including whether Lexim will receive any fees, incentives, or non-monetary benefits from the issuer or any third party in connection with the placement or distribution of the virtual assets;
(b) The timing of the issuance and settlement of the virtual assets, including any conditions that may affect liquidity or tradability; and
(c) Information on the intended target Market for the virtual assets, including relevant risk disclosures.
7.4 Conflict Management Procedures
To further prevent, monitor, and manage conflicts of interest, Lexim shall implement the following procedures:
(a) Segregation of roles – Ensuring that teams responsible for pricing, allocation, and distribution of virtual assets operate independently from Lexim’s proprietary trading or investment activities.
(b) Independent pricing validation – Conducting independent pricing reviews to verify that virtual asset placements are conducted at fair market value and do not disadvantage any investor or counterparty.
(c) Internal reporting – Requiring any potential conflicts of interest to be reported to the Compliance Department and Senior Management for assessment and mitigation.
(d) Ongoing monitoring and review – Regularly reviewing placement processes and execution outcomes to identify and correct any deficiencies in conflict management.
(e) All such conflict management controls and procedures shall be formally documented in writing, maintained in Lexim’s compliance records, and reviewed on a periodic basis to ensure effectiveness.
REVIEW OF EXECUTION QUALITY
8.1 Lexim will review the execution quality received by its clients every quarter.
8.2 If the review identifies significant differences in execution quality, Lexim will take corrective actions, such as modifying its Order routing arrangements. If Lexim chooses not to modify its routing arrangements, it will provide a documented justification explaining why the current arrangements remain in the best interest of its clients.
OFF-MARKET EXECUTION
9.1 Where Lexim executes a client Order off-Market by trading with another VASP, or a third party, Lexim will ensure that all sufficient steps are taken under this Policy to achieve the best possible results for the client.
9.2 The burden of demonstrating compliance with the Best Execution standards remains with Lexim. In such cases, Lexim will document and retain records detailing:
(a) The rationale for executing the Order off-market;
(b) The steps taken to ensure that the execution provides the best possible result for the client, considering price, costs, speed, and other relevant factors; and
(c) Any relevant information about the counterparty, including their execution standards and trading practices.
IMPLEMENTATION, MONITORING AND REVIEW
10.1 Lexim’s senior management has oversight for Best Execution by ensuring that all matters related to Best Execution brought to their attention are reviewed on a timely basis.
10.2 As a second line of defence, Lexim’s Compliance Department performs independent reviews on the executions in addition to the review carried out by the business. The Compliance Department also makes enquiries to the business where necessary to ensure compliance with Best Execution standards. They are also responsible for arranging training on Best Execution to relevant staff.
10.3 Lexim shall ensure that any department responsible for executing client orders is adequately resourced and maintained to fully comply with the execution requirements as set out in this Policy. The firm must provide sufficient staffing, technology, and other resources necessary to meet Best Execution standards and always fulfil its duties to clients.
10.4 Lexim will implement and maintain systems to ensure their capacity and capability to execute client Orders effectively. These systems will be designed to handle Orders received through Lexim’s platform or any other agreed means, ensuring consistent and reliable execution of client Orders. These systems will further:
(a) Undergo regular testing, stress assessments, and upgrades to ensure system integrity, scalability, and reliability in various market conditions.
(b) Incorporate safeguards and monitoring tools to detect, prevent, and address any technical failures or delays that could impact execution performance.
(c) Be subject to continuous oversight and evaluation by Lexim’s Compliance and Technology teams to ensure compliance with Part II of the Broker-Dealer Services Rulebook and Lexim’s Best Execution obligations.
10.5 Lexim will continuously monitor the effectiveness of its execution arrangements and of this Policy to identify and, where necessary, correct deficiencies.
10.6 This Policy will be reviewed at least annually and whenever a material change occurs that affects Lexim’s ability to continue to obtain the best possible result for clients. Senior management shall provide an annual attestation to VARA confirming that Lexim’s execution arrangements remain effective and in compliance with Part II of the Broker-Dealer Services Rulebook.
CLIENT DISCLOSURE
11.1 Lexim will provide clients with whom they have an ongoing relationship with appropriate information about this Policy and any material changes to it. Lexim shall notify clients in advance of any material changes to this Policy, or where immediate changes are required, promptly after implementation.
11.2 Lexim will also disclose the execution venues used and summarise the execution factors considered, ensuring that the clients are notified of the order execution arrangements and any material changes to them.
APPENDIX – A
Term
Definition
Institutional Investor
means—
(a) any entity regulated by a competent financial services regulator in the jurisdiction in which it is located [including but not limited to CBUAE, the UAE Securities and Commodities Authority, the Dubai Financial Services Authority and the Financial Services Regulatory Authority of the Abu Dhabi Global Market];
(b) any VASP;
(c) any government with relevant knowledge in respect of virtual assets for the nature of the virtual asset activities to be provided, the manner of demonstration of which shall be defined by Lexim prior to offering any products or services and shall be demonstrated to VARA on request;
(d) any institution which performs the functions of a central bank; or
(e) any multilateral agency with relevant knowledge in respect of virtual assets for the nature of the virtual asset activities to be provided, the manner of demonstration of which shall be defined by Lexim prior to offering any products or services and shall be demonstrated to VARA on request.
Market
means a variety of different venues, including but not limited to, market centres that are trading a particular virtual asset.
Order
means an instruction to buy or sell a virtual asset which is accepted by us for execution or transmission to a third party.
Qualified Investor
(a) An individual who has relevant knowledge in respect of Virtual Assets, or complex structured products, for the nature of the Virtual Asset Activities to be provided to the individual (the manner of demonstration of which shall be defined by Lexim prior to offering any products or services and shall be demonstrated to VARA on request) and such individual—
i. maintains net assets (comprising fiat currency, financial instruments, Virtual Assets and/or equity in tangible real estate assets, or any combination thereof) of at least AED 3,500,000 in equivalent value, supported by documentary proof of funds (e.g. account statements) that illustrate the relevant assets have remained, and will remain, liquid for a reasonable period of time and which shall be checked periodically, provided that—
the following assets shall be excluded from the calculation of an individual's net assets—
● the value of property that is the individual's primary residence, including any equity held by the individual net of any obligation against that residence;
● any rights of the individual under a qualifying contract of insurance; and
● any benefits (in the form of pensions or otherwise) which are payable on the termination of the individual's service, or on death or retirement, and to which the individual or the individual's dependents are, or may be, entitled; andfor the calculation of net assets, only 50% of the market value of Virtual Assets belonging to the individual may be included; or
ii. has an annual income of AED 700,000 or more;
(b) A legal entity validly incorporated in the jurisdiction in which it is located—
i. maintaining net assets (comprising fiat currency, financial instruments, Virtual Assets and/or equity in tangible real estate assets, or any combination thereof) of at least AED 3,500,000 in equivalent value, supported by documentary proof of funds (e.g. account statements) that illustrate the relevant assets have remained, and will remain, liquid for a reasonable period of time and which shall be checked periodically, provided that, for the calculation of net assets, only 50% of the market value of Virtual Assets belonging to the legal entity may be included; and
ii. whose directors have relevant knowledge in respect of Virtual Assets for the nature of the Virtual Asset Activities to be provided to the legal entity, the manner of demonstration of which shall be defined by Lexim prior to offering any products or services and shall be demonstrated to VARA on request.
Specific Instruction
means instructions provided to Lexim by a client when placing an Order for execution. Examples of such instructions may contain, but are not limited to, the selection of a limit price, a period of time the Order may remain valid or request to execute the Order on a specific venue;
