Best Execution Policy | Ofza - Delivering Optimal Trading Outcomes

BEST EXECUTION & EXCHANGE TRADING POLICY

1. INTRODUCTION

1.1 ABOUT OFZA
1.1.1 OFZA Fintech Virtual Asset Exchange Services LLC (the “Firm”, “the Company”, “OFZA”) is licensed and regulated by the Dubai Virtual Assets Regulatory Authority (VARA) as a Virtual Asset Service Provider (VASP Reference: VL/24/12/002) for the following Virtual Asset Activities:

a) Exchange Services,

b) Broker-Dealer Services,

c) VA Management and Investment Services.

1.1.2 OFZA has its registered office 21C13, i-Rise Tower, Al Thanyah First, Al Barsha Heights, Dubai, United Arab Emirates

1.2 PURPOSE

1.2.1 The purpose of this policy is to define the standards, systems, and procedures through which OFZA achieves the best execution for its clients. It aims to establish transparent rules governing order handling, trade execution, system controls, and client communications ensuring that all trading activity complies with VARA regulatory requirements and reflects the best market practices.

1.2.2 OFZA will ensure that, the most updated version of best execution policy will be published on the website that will comply the best execution obligation and take all sufficient steps to obtain the best possible result when executing orders or transmitting orders for execution on behalf of clients, taking into account execution factors, which include but not limited to price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. The Policy will be reviewed at least annually and whenever a material change occurs that may affect OFZA’s ability to consistently achieve the best possible results for its clients

1.3 OBJECTIVES

1.3.1 This Order Execution and Trading Policy outline the framework adopted by OFZA to ensure that all client orders for virtual assets are executed in a manner that consistently delivers the best possible results. The policy is applicable to all trading activities conducted through OFZA’s broker-dealer platform, including centralized exchanges, OTC desks, and liquidity provider. It serves as a foundational reference for all internal and external stakeholders involved in the trading and execution process.
1.3.2 Where OFZA executes an Order on your behalf or receives and transmits an Order for execution, it will take all sufficient steps to provide you with the best possible result in accordance with its Best Execution Policy.
1.3.3 The objectives of this policy are to:

a) Ensure consistent and fair execution of client orders in alignment with VARA regulatory expectations and internal standards.

b) Protect clients from adverse execution outcomes by implementing robust pre- and post-trade controls.

c) Enhance transparency in pricing, execution quality, and associated trading costs.

d) Define clear procedures, system controls for order validation, rejection, modification, and cancellation.

e) Prevent and detect abusive, manipulative, or otherwise unfair trading practices including but not limited to insider trading, market abuse practices such wash trading, pump and dump etc.

f) Maintain comprehensive records and enable continuous monitoring and assessment of execution quality.

g) Automated and manual trade-surveillance tools will be used under the oversight of the Market Surveillance Manager and Compliance Officer to ensure continuous monitoring of trading activity.

h) Communicating material changes to clients in a timely and clear manner.

1.3.4 It must be noted that OFZA will ensure that it takes all reasonable steps to act honestly, fairly, and professionally in accordance with the best interests of its clients at all times. Even in circumstances where best execution requirements do not apply, OFZA will ensure that Clients are treated fairly, that any conflicts of interest are properly identified, managed, and disclosed, and that all business is conducted with integrity.

1.3.5 OFZA maintains clear internal standards and procedures designed to achieve fair, transparent, and consistent outcomes for all Clients.

1.4 POLICY REVIEW AND MAINTENANCE
1.4.1 The Trading team led by Head of Trading will ensure that Policies, procedures, systems and controls are assessed annually for effectiveness.

1.4.2 Continuous improvements are made to execution infrastructure, surveillance systems, and risk controls.

1.4.3 All system changes are logged, auditable, and implemented without disrupting client operations.
2. BEST EXECUTION FRAMEWORK

2.1 BEST EXECUTION ASSURANCE
2.1.1 OFZA is committed to delivering the best possible outcomes for client orders, considering execution price, transaction costs, execution speed, and likelihood of execution and settlement.

2.1.2 This policy applies to all clients and all types of virtual asset transactions facilitated through the broker-dealer platform. The execution framework is designed to be dynamic and continuously evaluated to reflect market structure changes and technological advancements

2.1.3 Pre- and Post-Trade Disclosures

OFZA shall disclose to each client, both prior to execution and in the post-trade confirmation,

a) The portion of any amount payable by the client that is retained by OFZA as fees or commissions; and

b) Whether twenty percent (20%) or more of client orders are routed to any single liquidity source. If such concentration exists, OFZA shall identify the relevant liquidity source(s).

2.2 BEST EXECUTION FACTORS
2.2.1 Market Conditions
a) Market conditions include factors such as price, spreads, volatility, market sentiment, relative liquidity and pressure of communications, all of which play a critical role in determining the best execution. These factors can significantly impact the quality of execution.

2.2.2 Transaction Size
a) The size of transactions significantly influences execution quality. Large market orders may cause adverse price movements due to their impact on the liquidity of the crypto asset. To mitigate this risk and ensure orderly execution, OFZA has implemented predefined minimum and maximum quantity limits per order. Any order that exceeds or falls short of these thresholds will be automatically rejected by the system, and the client will receive a corresponding notification message explaining the reason.

2.2.3 Sources Of Liquidity
a) Orders may be routed through centralised exchanges, OTC desks, and liquidity providers. The platform utilises a structured liquidity hierarchy to determine the optimal execution venue for client orders. This hierarchy prioritises liquidity sources based on key factors such as best available price, depth of liquidity, and execution latency.
2.2.4 accessibility of quotes to trade in the Virtual Asset(s) in question under the market conditions prevailing at the relevant time, noting that, even in the event that certain sources of liquidity are not available, OFZA are not relieved from taking reasonable steps and employing their market expertise in seeking to achieve the best Execution of client orders; and the terms and conditions of the order which result in the transaction, as communicated to OFZA.
2.2.6 To support this process, the system continuously stores and analyses real-time pricing data from multiple liquidity sources. Based on these data points, client orders are dynamically routed to the most favourable external liquidity provider to ensure best execution.
2.2.7 All orders are executed externally at the liquidity provider’s side; no internal execution takes place. Additionally, the platform maintains the capability to track and report the percentage distribution of total order flow routed to each liquidity source. This ensures ongoing monitoring, transparency, and evaluation of execution performance across all connected venues.
2.2.8 The relative importance of the execution factors—price, costs, speed, likelihood of execution and settlement, size, nature, or any other relevant consideration—is dynamic and depends on several variables such as market conditions, order type, and liquidity availability.
2.2.9 Subject to any specific Client instructions, OFZA generally considers price as the most significant execution factor in achieving the best possible result for its Clients. Other factors are assessed and applied with equal weighting unless, in OFZA’s reasonable judgment and considering prevailing market conditions, another factor becomes more critical to achieve an overall better result for the Client.
2.2.10 OFZA will not compare the results achieved for Clients under this Policy with results that may be achieved by another VASP or firm, as each operates under distinct execution arrangements and fee structures.
2.2.11 OFZA maintains a transparent and consistent fee structure, ensuring that all applicable fees, commissions, and implicit costs are fully disclosed to Clients. OFZA does not apply discriminatory pricing or vary fees depending on the execution venue used.
2.2.12 OFZA onboards Liquidity Providers only after conducting a comprehensive due-diligence and suitability assessment, evaluating:

a) Legal presence, regulatory standing, and reputation

b) Compliance screening, sanctions, and adverse-media checks.

c) Competitive and transparent pricing and market depth

d) Financial soundness and operational resilience

e) Technology infrastructure and connectivity

f) Risk management, trade surveillance, and market-abuse prevention measures

2.3 DOCUMENTATION AND RECORD KEEPING
2.3.1 OFZA shall maintain comprehensive, auditable records evidencing how each client order met the best execution criteria (price, cost, speed, likelihood of execution/settlement, and size). All supporting documentation, including liquidity-source selection data, order timestamps, and trade confirmations, shall be retained for a minimum of eight (8) years

3. ORDER MANAGEMENT

3.1 SUPPORTED ORDER TYPES

3.1.1 Request for Quote (RFQ) Orders: Clients submit a quantity for a specific asset, and the system provides a quoted price based on the requested size. Once the quote is accepted by the client within the validity window, the order is executed at the quoted price. This method ensures price transparency and execution certainly, especially for larger or less liquid orders.
3.2 ORDER VALIDATION & REJECTIONS

3.2.1 Insufficient Liquidity

a) An order may be rejected if there is not enough available volume at the desired price level to execute it. This typically occurs in illiquid market conditions, where fulfilling the order could lead to significant slippage. To prevent such outcomes, OFZA’s system performs real-time liquidity checks and rejects orders that cannot be executed at a fair market price. Clients are immediately notified of the reason for rejection.

3.2.2 Invalid Parameters

a) Any orders submitted with parameters that fall outside the allowed limits—such as order sizes smaller or larger than the permitted thresholds—are automatically rejected. This helps maintain orderly trading by preventing erroneous or potentially harmful orders from entering the system.

3.2.3 Insufficient Funds

a) An order will be blocked from execution if the trader’s available wallet balance does not meet the required amount to cover the transaction. This check ensures that clients cannot buy or sell beyond their available balances.

3.2.4 Order Modification & Cancellation
Market orders cannot be cancelled once submitted due to their immediate execution nature. The Company reserves the right to cancel or adjust orders in the event of:
I. Technical malfunction
II. Abnormal market conditions

4. ORDER EXECUTION PROCEDURES & CONTROLS

4.1 PRE-TRADE RISK CONTROLS
4.1.1 Minimum/Maximum Order Size

a) OFZA sets specific minimum and maximum order size limits for each asset, considering the asset's typical liquidity, market depth, and trading characteristics. These thresholds help ensure orderly execution, prevent system abuse, and manage market impact. Orders that fall outside the configured size range are automatically rejected to maintain fair and efficient trading operations.

4.1.2 Price Integrity Check

a) OFZA utilises external price feeds from reputable market data providers to monitor real-time asset prices and detect deviations from fair market value. If a submitted order price significantly deviates from the reference price beyond a predefined threshold, the system flags or blocks the order to prevent erroneous execution. This mechanism helps maintain market integrity, protect clients from price manipulation or data errors, and ensure alignment with prevailing market conditions.

4.1.3 Confirmation Window

a) Before an order is dispatched to the market, the platform provides a confirmation window that allows the user to review all order details—such as asset, price, quantity, and order type. This pause gives users the opportunity to verify and confirm the accuracy of their inputs, helping to prevent accidental or erroneous orders. The confirmation step enhances user control, reduces input errors, and supports responsible trading behaviours.

4.2 SPECIFIC INSTRUCTIONS & REJECTION SCENARIOS

4.2.1 Size Rejection

a) Orders that fall outside the predefined acceptable size limits, either too small or too large, are automatically flagged and rejected by the system. These limits are set based on factors such as market liquidity, risk management policies, and system capacity. Rejecting anomalous order sizes helps prevent potential abuse, mitigates operational and market risk, and ensures consistent and fair-trading practices across all users.

4.2.2 Price Deviation

a) Orders that attempt to execute at prices significantly different from the current market reference price are subject to price deviation checks. If the order price breaches predefined variance thresholds—set to detect outliers or potentially erroneous pricing—the order is automatically rejected. These thresholds are designed to protect clients from executing trades at abnormal prices due to latency, input errors, or market volatility. This mechanism helps ensure trade occurs within a fair and controlled pricing environment.

4.2.3 Insufficient Funds

a) An order will be blocked from execution if the trader’s available wallet balance does not meet the required amount to cover the transaction. This check ensures that clients cannot buy or sell beyond their available balances.

4.2.4 Technical Failures

a) Orders may be automatically rejected or delayed in the event of system downtime, connectivity disruptions, or issues with market data feeds. These technical failures can impact order routing, execution accuracy, or price validation. To ensure market integrity and protect clients from unintended outcomes, the platform may temporarily halt or restrict trading activity until normal operations are restored. All such incidents are monitored and logged in accordance with incident management protocols.

4.2.5 Market Conduct & Risk Flags
a) Orders that are suspected of market manipulation, abuse, or potential breaches of regulatory requirements may be automatically blocked or subjected to further scrutiny. OFZA monitors all client trade transactions to detect any unusual trade practices or market abuse practices.

4.2.6 OFZA’s market surveillance monitoring system continuously monitors trading activity and may trigger alerts or flags based on predefined risk indicators. When such flags are raised, the associated orders or accounts may be suspended and subjected to manual review, require additional information from client to process order and may subject to enhanced scrutiny including rejection of orders. This is to ensure compliance with internal policies and applicable regulations, prohibition of market abuse and unlawful trading practices within OFZA platform. This process helps uphold market integrity.

4.3 POST-TRADE CONTROLS & CLIENT NOTIFICATION

4.3.1 Confirmation Email
a) Upon successful execution of a trade, a confirmation email is automatically sent to the client. This email includes a time-stamped summary of the transaction, detailing key information such as the asset traded, order type, quantity, execution price, fees, and execution time. This confirmation serves as an official record of the trade and enhances transparency and accountability in the trading process.

4.3.2 Audit Logs & Reconciliation
a) The system maintains comprehensive audit logs that record all user actions, order submissions, modifications, executions, and system events in a time-stamped and tamper-evident manner. Additionally, reconciliation reports are regularly generated to ensure consistency between internal records and external data sources, such as liquidity providers or custodians. These measures support regulatory compliance, internal oversight, and operational transparency.

4.4 EXECUTION QUALITY ASSESSMENT

4.4.1 OFZA will ensure the Trade Execution Department has sufficient personnel, technology, and training to execute client orders efficiently and in line with the best execution standards.

4.4.2 The Exchange and Operation department is responsible for timely assessment of order executions and highlights any material differences relative to the prevailing market conditions.

4.4.3 Periodic risk analysis, compliance monitoring and internal audit assessment will be conducted to ensure the effectiveness of execution process. Regular monitoring will ensure compliance with this policy, with corrective action taken if any issues arise. In accordance with the VARA Broker-Dealer Services Rulebook, OFZA will perform continuous monitoring and at least annual reviews of its execution procedures, including quarterly assessments of execution quality where orders are routed to multiple liquidity providers or venues. The assessment will be conducted internally by Compliance, Risk and/or internal audit department and externally by Independent audit firm.

4.4.4 These activities are designed to maintain effective, transparent, and compliant execution practices while ensuring that OFZA consistently meets its regulatory obligations and delivers fair and optimal outcomes for its clients. Execution quality shall be monitored through a quarterly review assessing execution prices against aggregated market benchmarks. The Trading Team shall maintain logs, documenting results and remedial actions. This log must be reviewed by Compliance and retained for audit purposes.

4.5 DEVELOPMENT & MAINTAINANCE OF EXECUTION SYSTEM

4.5.1 The DevOps team is responsible for the development, maintenance, and continuous improvement of the execution infrastructure by taking recommendations and enhancements from relevant internal stakeholders. The key principles guiding this function include:

a) Scalability and Security: Infrastructure is designed to be scalable and secure, capable of handling increased load without compromising performance or data integrity.
b) Audited Infrastructure: All systems are maintained with proper logging and audit trails to ensure accountability and traceability.
c) Continuous Delivery Model: A continuous integration and delivery (CI/CD) approach is employed to facilitate timely updates, bug fixes, and feature enhancements without disrupting ongoing operations.

4.6 TRANSPARENCY IN TRADING

4.6.1 OFZA’s Order Execution Policy is published on the platform and is reviewed and updated periodically to reflect current practices, market conditions, and regulatory requirements. This ensures clients are fully informed about how their orders are handled and executed.

4.6.2 All applicable trading fees are clearly disclosed to clients prior to order placement, ensuring informed decision-making.

4.6.3 Withdrawal and deposit fees are transparently displayed on the client dashboard, allowing clients to view and understand any charges associated with funding or withdrawing from their accounts. This approach promotes fairness, trust, and regulatory compliance.

4.7. EQUITABLE TRADING PRACTICES

4.7.1 OFZA is committed to maintaining fair and equitable trading conditions for all clients. This includes providing consistent access to pricing, execution services, and market data without favouritism or discrimination.

4.7.2 All orders are handled impartially, and conflicts of interest—such as internal dealing or preferential treatment—are identified, managed, and disclosed where necessary. OFZA also enforces policies to prevent front-running, price manipulation, pump and dump, wash trading or any practices that may disadvantage clients.

4.8 PROHIBITION OF UNFAIR TRADING PRACTICES

4.8.1 OFZA strictly prohibits all forms of unfair trading practices, including but not limited to market manipulation, front-running, spoofing, layering, and the misuse of confidential or insider information.
4.8.2 OFZA and its personnel are prohibited from receiving or granting any monetary or non-monetary benefit, rebate, inducement, or reciprocal arrangement that may result in unfair treatment of Clients or distortion of market conditions. Execution routing and trading decisions must always be based on the Client’s best interest and Best Execution standards, not on commercial or referral incentives
Any attempt to exploit system inefficiencies or gain an unfair 4.8.3 advantage over other market participants is considered a serious violation of the OFZA’s policies and may result in account suspension, regulatory reporting, or legal action. These measures are in place to uphold market integrity, protect clients, and ensure compliance.

4.9 CLIENT NOTIFICATION OF MATERIAL CHANGES

4.9.1 OFZA will ensure that clients are notified of any material changes to services, policies, or execution arrangements in a timely and transparent manner. Material changes include alterations to fees, trading hours, or downtime in platforms that could impact client experience.
4.9.2 Notifications will be sent in advance through appropriate channels, including email or the client portal, and will clearly describe the change, its impact, and the effective date. In emergency situations, notifications may be sent after the change. Such as System outages or technology failures, Cybersecurity incidents or data breaches, Unexpected regulatory or legal directives, Extreme market volatility or liquidity disruptions, Operational or counterparty risks

4.10 PROHIBITION ON CONFLICT BASED INCENTIVES

4.10.1 OFZA prohibits offering or receiving any monetary or non-monetary benefits that could create conflicts of interest in the execution of client orders. This includes not providing incentives to staff or third parties for routing client orders to specific venues or counterparties.

4.10.2 The goal is to ensure that all actions taken by OFZA, including order execution, are aligned with the best interests of the clients and free from undue influence or bias caused by potential conflicts of interest.

4.11 DIRECTED ORDERS

4.11.1 Where a client provides OFZA with specific instructions to route or execute an Order through a particular market, liquidity provider, or counterparty (“Directed Order”), OFZA will execute the Order strictly in accordance with the Client’s instructions, to the extent reasonably practicable.

4.11.2 The Client acknowledges and agrees in writing that providing such direction may limit OFZA’s ability to obtain the best possible result under its Best Execution Policy. In these cases, OFZA’s Best Execution obligation applies only to the aspects of the Order not covered by the Client’s specific instruction.

4.11.3 OFZA will maintain records of all Directed Orders and the associated Client acknowledgements, in accordance with the VARA Broker-Dealer Services Rulebook and internal record-keeping procedures.

4.12 RECORD EVIDENCE

4.12.1 OFZA is committed to maintaining accurate and comprehensive records of all client orders and execution activities. This includes documenting all actions taken during the execution process, ensuring transparency and compliance with regulatory requirements.
4.12.2 Records will be kept for a specified period and should be readily available for review, audits, or investigations.

5. WALLET SEGREGATION AND CLIENT LINKAGE

5.1 CLIENT WALLET MANAGEMENT

5.1.1 Each client’s wallet is managed through a dedicated vault structure within Fireblocks, our chosen virtual asset custody solution. Every vault is uniquely mapped to the client’s user record in our database, ensuring precise tracking and segregation of client assets.
5.1.2 The platform does not maintain a one-to-one on-chain verification system between blockchain balances and client ledger balances. Once funds are deposited, clients may trade or convert their assets, which changes their portfolio composition. Client balances are therefore maintained in the internal ledger, which accurately reflects all trading and conversion activity.

5.1.3 OFZA shall, at all times, maintain reserve assets equivalent to one hundred percent (100%) of the liabilities owed to clients with respect to all VA Activities. OFZA holds Reserve Assets on a one-to-one basis in the same Virtual Asset that liabilities are owed to its clients. Reserve Assets will be reconciled on daily basis and audited by an independent third-party auditor no less than every six (6) months in compliance with VARA regulations.

5.2 BUSINESS CONTINUITY AND DATA RECOVERY

5.2.1 In the event of a system failure, the platform’s data recovery protocols allow for full reconstruction of each client’s holdings and transaction history.

5.2.2 All trade and wallet data are securely stored and backed up to ensure integrity and recoverability.

5.3 CUSTODY AND THIRD-PARTY ASSET HOLDING

5.3.1 The platform utilizes Fireblock as the primary custodian for Virtual Assets and Zand Bank for fiat currency holdings. Both custodians provide secure storage and transaction management capabilities. Administrative users can view where each client’s assets are held via Fireblock vault structures, ensuring full traceability of funds.

5.4 SERVICES PROVIDED TO OTHER VASPS

5.4.1 In the platform VASPs or institutional brokers may be onboarded as Corporate Entities to access trading services. All such accounts are clearly segregated from retail/qualified and institutional client accounts within the system to ensure transparent record-keeping and regulatory compliance. The platform does not hold or maintain funds or Virtual Assets on behalf of other VASPs beyond the scope of normal client account operations.

5.4.2 OFZA performs client classification in accordance with market conduct rule book. All clients will be classified as a retail client or qualified investor (individual or entities), or an institutional client subject to appropriate criteria and suitability assessments. The requirements are embedded in the client onboarding process, all clients will be onboarded subject to KYC/KYB checks, risk assessment, due diligence checks and compliance approvals.

5.5 CLIENT ASSET PROTECTION

5.5.1 The platform maintains a clear segregation between client-owned assets and company assets. Client’s virtual assets are held in segregated Fireblock vaults, ensuring full ownership and traceability. The platform’s internal ledger system continuously records client holdings, providing a reliable record of ownership in accordance with applicable regulatory requirements.

5.6 REFERRAL AND INTRODUCER ARRANGEMENTS

5.6.1 Where appropriate, OFZA may refer or introduce clients to other licensed entities, including other VASPs, under formal referral or introducer arrangements. OFZA will ensure that all such arrangements are subject to prior Legal and Compliance approval, notification to VARA (where applicable), and are governed by written terms that define the scope of cooperation, applicable fees, or benefits. OFZA shall disclose to clients any monetary or non-monetary benefits that it receives under such arrangements, including any reciprocal commercial considerations, in accordance with the VARA Broker-Dealer Services Rulebook. OFZA will take all measures to ensure that these arrangements will not, under any circumstances, influence OFZA’s order-execution decisions or create conflicts inconsistent with the Firm’s duty to act in the best interests of its clients.

5.6.2 Corporate and institutional clients, including other brokers, may be onboarded as Corporate Entities. Such accounts are clearly segregated from Individual (retail) client accounts within the system to ensure transparent and distinct record-keeping.