CONFLICT OF INTERESTS POLICY

Transcription

1 CONFLICT OF INTERESTS POLICY 1. Intrductin A Cnflict f Interest is a situatin that has the ptential t undermine the impartiality f anindividual because f the pssibility f a clash between the persn'sselfinterest and prfessinalr public interest. In terms f the Financial Advisry and Intermediary Services Act, Act N 37 f 2002, Sevenstne Investments 115 (Pty) Ltd, thrugh their Executive Management, is required t ensure that steps are taken t manage cnflict f interests within the business t identify, mnitr and manage a ptential cnflict f interest. The General Cde f Cnduct cntains varius prvisins which need t be met with regard t cnflictf interests and the fair treatment f clients. 2. FAIS Definitins Cnflict f interest means any situatin in which a prvider r a representative has an actualr ptential interest that may, in rendering a financial service t a client: influence the bjective perfrmance f his, her r its bligatins t that client; r prevent a prvider r representative frm rendering an unbiased and fair financialservice t that client, r frm acting in the best interests f that client, including, but nt limited t: a financial interest; an wnership interest; any relatinship with a third party; Distributin channel means: any arrangement between a prduct supplier r any f its assciates and ne r mre prviders r any f its assciates in terms f which arrangement any supprt r service is prvided t the prvider r prviders in rendering a financial service t a client; any arrangement between tw r mre prviders r any f their assciates, which arrangement facilitates, supprt r enhances a relatinship between the prvider r prviders and a prduct supplier; any arrangement between tw r mre prduct suppliers r any f their assciates' which arrangement facilitates supprts r enhances a relatinship between a prvider r prviders and a prduct supplier; Fair value has the meaning assigned t it in the financial reprting standards

2 adpted r issued under the CmpaniesAct, 1973 (Act N. 61 f 1973) Financial interest means any cash, cash equivalent, vucher, gift, service, advantage,benefit, discunt, dmestic r freign travel, hspitality, accmmdatin, spnsrship, therincentive r valuable cnsideratin, ther than: an wnership interest; training, that is nt exclusively available t a selected grup f prviders r representatives, n: prducts and legal matters relating t thse prducts; general financial and industry infrmatin; specialised technlgical systems f a third party necessary fr the rendering f a financial service; but excluding travel and accmmdatin assciated with that training; Immaterial financial interest means any financial interest with a determinable mnetaryvalue, the aggregate f which des nt exceed R in any calendar year frm the samethird party by: a prvider wh is a sle prprietr; r a representative fr that representatives direct benefit; r a prvider, wh fr its benefit r that f sme r all f its representatives, aggregates the immaterial financial interest paid t its representatives. Ownership interest means: any equity r prprietary interest, fr which fair value was paid by the wner at the time f acquisitin, ther than equity r a prprietary interest held as an apprved nminee n behalf f anther persn; and includes any dividend, prfit share r similar benefit derived frm that equity r wnership interest. Third party means: a prduct supplier; anther prvider; an assciate f a prduct supplier r a prvider; adistributin channel; any ther persn wh in terms f an agreement prvides afinancial interest t a prvider r its representatives. 3. Management Plicy Statement Sevenstne Investments 115 (Pty) Ltd recgnises the imprtance f perating in an pen and transparent manner in all aspects f the peratins f the business, be they with ur clients, ur suppliers,ur service prviders r members f the greater business cmmunity within which we wrk, be they directly a part f the financial services industry r nt. Whilst the legislative requirements may be the fundatin fr ur plicy it is far mre practical in its applicatin and takes basic business ethics as itsverall primary standard and bjective. 4. T whm des this plicy apply? This plicy is deemed t apply t all emplyees, which includes: i) Directrs ii) Cntract and/r temprary staff,whether they be emplyed in the financial services sectr r nt. 5. What d we deem t be a Cnflict f Interest?

3 The Financial Advisry & Intermediary Services Act (FAIS) gives us the fundatin fr ur plicy. It defines a cnflict as: "any situatin in which a prvider r a representative has an actual r ptential interest that may,in rendering a financial service t a client i) influence the bjective perfrmance f his, her r its bligatins t that client; r ii) prevent a prvider r representative frm rendering an unbiased and fair financialservice t that client, r iii) frm acting in the interests f that client, including, but nt limited t: a financial interest; an wnership interest; any relatinship with a third party" 6. Where can these ptential cnflict situatins arise within ur business? i) With insurers with whm there is a business/wnership relatinship; ii) With ther Financial Service Prvider's with whm there is a business/wnership relatinship; iii) With Distributin channels with whm there is a business/wnership relatinship; iv) With any ther persns with whm there is a business/wnership relatinship; v) With any service prviders with whm there is a business/wnership relatinship Any f the abve culd be deemed Assciate cmpanies r 3rd party cmpanies with whm we may have an wnership interest in them r by them. These cmpanies, if applicable, are listed in separate annexure t this plicy. vi) With ur cmpany as a result f emplyment cntracts and remuneratin plices; vii) With any ther relevant relatinship that may exist within the cmpany. 7. Hw d we assess whether there are cnflict situatins within ur business?we have a management tl that assists in dcumenting the varius relatinships and arrangements that we currently have in place, whether r nt these create a cnflict r ptential cnflict. If they d then a decisin has been taken as t whether these are t be avided r mitigated and the decisin recrded accrdingly. These sectins are reviewed as part f the nging mnitring prcess fllwed by ur external cmpliance fficer and frms the basis f an nging reprting strategy t bth urselves and shuld the need arise t the Financial Services Bard, the ultimate authrity gverning the financial services sectr. T assess what cnflict situatins we had we firstly identified all the situatins that may have led t a cnflict. This was an initial nce ff exercise but ur cmpliance plicy is such that these key indicatrs are reviewed, at the very least annually and BEFORE any new relatinships are entered int because a new relatinship may well demand avidance, mitigatin steps r additinal disclsures.

4 The situatins that we scrutinised included; 7.1 What Assciate cmpany relatinships d we have? i.e. In simple terms cmpanies with whm there is a relatinship based n cmmn sharehlding, management cntrl r family(in its widest cntext) members are invlved and subsidiary r hlding cmpany status 7.2 What Third party relatinships did we have? These included: Prduct suppliers (insurers) including any f their assciates; Other FSP's, including any f their assciates; Distributin channels; Any ther persn wh in terms f an agreement r arrangement with any f these prvides a financial interest is due t us r ne f ur representatives; Suppliers utside the insurance envirnment, fr example: Statinary IT Accunting 7.3Was there any wnership interest within these relatinships? 7.4 And wuld this create a cnflict f interest? 7.5 Was there any financial interest paid frm r t the entities within these relatinships? 7.6 And wuld this create a cnflict f interest? 7.7 Was there any immaterial financial interest paid frm r t the entities within these relatinships? 8. If s are we mnitring the frequency and extent? The prcess allws us t assess all f ur relatinships, including thse f ur staff and including financial aspects, and t dcument these fully. The data cllected is then reviewed t see, if a ptential cnflict has been identified, and then we determine hw best t deal with this. The ptins pen t us include: 8.1 Avidance i.e. Take Away the situatin that creates the cnflict ; r 8.2 Mitigate i.e. Put measures in place that acknwledge the cnflict situatin but implement measures t reduce its ptential impact; and/r 8.3 Disclsure i.e. frmally prvide details f the situatins that are there and what has been dne, if anything, abut these t reduce r eliminate the situatin itself Any slutin we have established culd be a cmbinatin f all three e.g. avids sme, mitigate thers and disclsewhat we have dne and will cntinue t d. Our general strategy is, where pssible, t avid such cnflicts i.e. prevent them by physically remving the cnflict situatin.

5 Where we are unable t avid the cnflict situatin, actual r ptential, we need t mitigate i.e. we have t put cntrls in place t reduce the likelihd f a cnflict arising again. Where disclsure f cnflicts, which includes ptential nes, invlves clients the standard adpted, demands a higher level f frmality. It demands frmal disclsure "at the earliest reasnable pprtunity ", which is deemed t be when prviding a client with initial advice r a qute. Our disclsures are clear, cncise and effective, in ur pinin, althugh we cnstantly strive t ensure we are achieving this ideal. Our disclsures include: What cnflicts we have What measures we have in place t avid r mitigate these Ownership interests that we may have - this includes sharehlding, dividends, prfit share and similar payments, as well as wnership f and payments frm assciated cmpanies that may include underwriting managers, administratrs, cell captives cmpanies, insurer s and credit prviders. Financial interests (these are things we actually pay fr that are made available by ther FSP's r insurers as part f the relatinships that exist) that may becme due. These include vuchers, benefits, travel, hspitality, accmmdatin, spnsrships and ther incentives. Details f relatinships and/r arrangements that exist that may create a (ptential) cnflict. Hw t btain a cpy f ur Cnflict f Interest management plicy. 9. What are the results f this prcess and its nging mnitring? We summarise the results in 3 specific annexures, namely: 9.1 A Management plicy summary f ur cnflict situatins and actins taken 9.2 Assciates cmpanies - a listf all such cmpanies 9.3 3rd Party cmpanies with whm there is an wnership interest by us and/r staff 10. Hw d we ensure this plicy is understd and adhered t by all rle players? 10.1 This plicy has been develped in cnjunctin with and frmally apprved by ur cmpliance fficers. The adherence t and breaches f it are a standing item n all meeting Agenda s This plicy is published within the cmpany and is readily available t all clients

6 and ther interested parties Cmpliance with this plicy is an integral part f ur emplyment cntract and subject t review n at least an annual basis. This includes a clause regarding breaches, which are seen t be subject t the cmpanies disciplinary prcedures On appintment, all staff will cmplete and annually update a Cnflict f Interest questinnaire All management and staff are required t sign a frmal declaratin relating t the understanding f, and agreement t, adhere t this plicy 10.6 Our cmpliance prgram ensures a cnstant review f ur standards which includes an bligatin t reprt nn-cmpliance t the authrities if crrective actin is nt taken.