We have put in place a range of procedures in order to identify, monitor, manage and where applicable disclose conflicts of interest that may arise from time to time. The effectiveness of all these controls is monitored on an ongoing basis and forms part of our Compliance monitoring programme.
We place a great emphasis on maintaining a strong compliance culture. This culture is continually reinforced with all staff, and the need always to act in clients' best interest is the cornerstone of our philosophy.
What is a conflict of interest?
A conflict of interest may arise where our interests or those of a member of our staff could conflict with a duty we have to a client.
It is not desirable to enumerate a definitive lists of circumstances in which conflicts could arise; part of staff training in this area is to recognise and remediate or escalate potential conflicts in the course of business. However, to help identify potential conflicts of interest, we have considered a number of areas, including:
- circumstances where we could make a financial gain, or avoid a financial loss, at the expense of a client;
- where a financial or other incentive to favour the interest of one client or group of clients over the interests of another client or group of clients might arise;
- where we may or will receive from a third party an inducement in relation to a service provided to the client or us, in the form of monies, goods or services, other than the standard commission or fee for that service.
Managing and monitoring conflicts
We have a number of mechanisms in place to manage potential and actual conflicts, which are summarised below.
1.1. Policies and procedures.
Policies and procedures are embedded throughout the business to ensure conflicts are identified, considered and mitigated. Our employees undergo regular training and receive guidance where conflict situations arise. The management team are responsible for ensuring that their teams have robust controls in place to identify and manage risks which arise. We also have a conflicts register on which details of conflict situations are recorded as well as details of the controls which were put in place to mitigate potential issues.
Where the interests of one team and its clients may conflict with the interests of another team and its clients, the management structure has been separated.
We have a remuneration policy which is updated annually. Our staff are remunerated by a combination of:
- Basic salary and related benefits;
- Discretionary annual bonus.
These take into account individual, team and company performance. No employee will directly benefit from any single trade a client may make.
1.4. Gifts & inducements.
We have procedures in place about the giving and receiving of gifts or hospitality. Employees must neither solicit nor accept any inducements which may conflict with our obligations to clients, nor offer inducements which could conflict with the recipient’s obligations to its own clients.
1.5. Outside business interests.
All employees are required to disclose outside business interests and directorships. All such outside interests must be approved by management.
1.6. Personal account dealing.
Our employees are subject to restrictions regarding their own, personal-account, dealing. All dealing or investment accounts must be approved by the management and copies of contract notes are automatically sent to the Compliance department.
1.7. Dealing & allocation.
In order to ensure that deals cannot be allocated in favour of one group of clients or staff, we operate dealing and allocation procedures which cover dealing fairly and in due turn.
1.8. Policy of independence.
Our staff procedures require employees to disregard any material interest or conflict of interest when acting on clients’ behalf.
In practice, the conflict of interest arrangements summarised above have been designed to reduce the risk of a conflict of interest being detrimental to a client and in most situations we consider that these will be sufficient to ensure clients’ interests are protected. However, there may be rare occasions where we consider these arrangements are insufficient. In such circumstances it may be possible to disclose the conflict of interest to the client(s) in writing directly or, in the event of a severe conflict of interest, we may need to cease or decline to act on a client’s behalf.