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.
1. What is a conflict of interest?
A conflict of interest may arise where our interests or those of a member of our staff could and tied agents, including persons directly or indirectly linked to the aforesaid by control conflict with a duty we have to a client.
It is not desirable to enumerate a definitive list 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 financial or other incentives 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;
- where we or a relevant person has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of the client, which is distinct from the client's interest in that outcome
2. Managing and monitoring conflicts
We have a number of mechanisms in place to manage potential and actual conflicts, which are summarised below.
2.1. 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 in place measures designed to prevent or limit any person exercising inappropriate influence over the way in which services or activities are carried out.
We have a remuneration policy which is updated annually and any direct link between the remuneration of relevant persons principally engaged in one activity and the remuneration of, or revenues generated by, different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities has been removed. 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.
2.4. 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.
2.5. Outside business interests.
All employees are required to disclose outside business interests and directorships. All such outside interests must be approved by management. We undertake pre-employment screening exercises in order to ensure that Staff are fit and proper and appropriately qualified.
2.6. 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.
2.7. 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.
2.8. Policy of independence.
Our staff procedures require employees to disregard any material interest or conflict of interest when acting on clients’ behalf.
Our strict client confidentiality policy ensures that all information relating to clients is retained with the firm and treated as confidential information. Confidential information is only disclosed to those entitled to receive it. Staff are prohibited from using any such confidential information for their own interests.
3. Potential Conflicts
In the context of the wide array of investment and/or ancillary services offered by the Company, ‘Conflicts of Interest’ may, by way of example, occur within the context of:
3.1. the investment services and/or ancillary services, or any combination thereof, provided by the Company to, for and/or on behalf of its Clients; in particular, the investment services and/or ancillary services that are provided by the Company and in the context of which possible ‘Conflicts of Interest’ may arise, are the following:
- - Reception and transmission of Client Orders in relation to one or more financial instruments.
- - Execution of Orders on behalf of Clients
- - Dealing on own account
- - Investment Advice
- - Safekeeping and administration of financial instruments on behalf of clients;
- - Foreign exchange transactions associated with investment services;
- - Investment research and financial analysis or other forms
3.2. inducements (e.g. sales commission, trailer fees or other rewards with a monetary value) received or granted by or to third parties (e.g. selling commissions) received from or paid to third parties) in connection with investment services and/or ancillary services, or any combination thereof, provided by the Company to, for and/or on behalf of its Clients;
3.3. performance-related remuneration paid to the Company’s staff and intermediaries in connection with investment services and/or ancillary services, or any combination thereof, provided by the Company to, for and/or on behalf of its Clients;
3.4. inducements granted to the Company’s staff and intermediaries in connection with investment services and/or ancillary services, or any combination thereof, provided by the Company to, for and/or on behalf of its Clients;
3.5. commission trading in connection with services and/or ancillary services, or any combination thereof, provided by the Company to, for and/or on behalf of its Clients Client business;
3.6. the Company’s relationship with the issuers of financial instruments, e.g. financial relationship, joint issues and cooperation;
3.7. the preparation of financial analyses on securities offered for sale to the Company’s Clients;
3.8. access and use of information obtained by the Company or the Company’s staff and/or senior management, which is not in the public domain, i.e. the Company or the Company’s staff and/or senior management obtaining information, which has not been published;
3.9. personal relationships of the Company’s staff and/or senior management, or of any persons associated with them, or the participation of these persons, in supervisory or advisory bodies.
4. Record Keeping
The Compliance Department will arrange for the recording of any ‘Conflict of Interest’ in an appropriate and separate ‘Conflicts of Interest’ register, and will inform the Risk Management, senior management and Board of Directors of the Company of the matter and of any action taken.
The register shall also include an updated version of this Policy. The information contained within the register facilitates the effective identification and management of any potential ‘Conflicts of Interest’.
The information contained within the register will be kept for a minimum of five (5) years, with any changes made in it will also be kept for the same period of time.
Stage three in mitigating potential ‘Conflicts of Interest’ is to be transparent towards the Clients with regard to the identified conflicts that might arise, or are about to arise when conducting business. Possible measurements will be implemented in order to act in the best interest of the Client.
Where a conflict arises and the Company becomes aware of it, it shall take all reasonable steps to address that conflict and, if not possible, the Company shall disclose the conflict to the client prior to undertaking investment business for that client or, if it does not believe that disclosure is appropriate to manage the conflict, it may choose not to proceed with the transaction or matter giving rise to the conflict.
The Company reserves the right to assess and periodically review, at least annually, and, if necessary, amend this Policy and arrangements, at its sole discretion, whenever it deems fit or appropriate, in order to address any deficiencies.
Our ‘Conflicts of Interest Management Policy’ is a policy only, it is not part of our Terms and Conditions of Business and does not seek to impose any obligations on us which we would not otherwise have, but for the Cyprus Investment Services and Activities and Regulated Markets Law of 2007 (Law 87(I)/2017), Markets in Financial Instruments Directive (recast) – Directive 2014/65/EU of the European Parliament and of the Council and/or the Markets in Financial Instruments Regulation – Regulation 600/2014 of the European Parliament and of the Council.
This ‘Conflicts of Interest Management Policy’ is not intended to, and does not, create third party rights or duties that would not already exist if the ‘Conflicts of Interest Management Policy’ had not been made available.
Should you have a question about Conflicts of Interest’ at the Company, please direct your questions to our Legal Department: firstname.lastname@example.org.