Staff Accounts, Staff-Related Accounts, allocations and dealings

Transcription

1 P Managed Lonsec Funds Research Pty Ltd ABN AFSL

2 Contents 1. Introduction Definitions Reason for this policy Relevant Lonsec research policies Effective date January Scope Special requirements for research analysts What about staff or staff related personnel superannuation funds? What about investment clubs and syndicates, and discretionary accounts managed by someone else? Which financial products are covered? Are dealings in any financial product exempt? Rights or bonus issues, takeover offers Records of holdings 4 3. Market dealings on staff & staff related accounts New staff account procedures Broker/CHESS sponsorship Existing HIN Margin lending Options trading or CFDs Confirmations Prior written authorisation required Authorisation Restricted list Trading embargo release of research report Short selling Placing the order Front running prohibited Order are valid until cancelled Orders may be withdrawn at any time ANY amendments must be authorised Minimum holding period is 48 hours Use of Lonsec Stockbroking suspense accounts prohibited Dealings monitored, market activity may be limited or stopped 7 4. Allocation to staff & staff related accounts Allocation criteria for issues formally involving Lonsec Stockbroking Non public information New Issues not involving Lonsec Stockbroking 8 5. Settlement Secondary market dealings Primary market dealings 9 6. Reporting new staff & staff related accounts 9 7. Accounts/dealing at other firms Accounts & dealing at other firms 9 P 2-9

3 1. Introduction The definitions of Staff and Staff Related Account and related terminology are extremely important and must be common knowledge to all Lonsec Research Pty Ltd (Lonsec Research) staff. 1.1 Definitions Cleared funds means sufficient funds in the staff member s bank account by the date of settlement to cover the total purchase including brokerage and any other fees. Staff or Staff related account is defined as one: in the name of the staff member (including joint accounts of which the staff member is a party); or In the name of a staff member s: Immediate Family, means your spouse or children under 18 years old of your household (i.e. living with you at your place of residence). Family Company, being a corporation controlled by you or a member(s) of your Immediate Family, or a corporation in which you are beneficially entitled to more than 50% of the issued capital; Family Trust, being a Trust in which you or member(s) or your Immediate Family is the sole or majority beneficiary, or a Trust where you have the ability to remove and replace the Trustee with a person or entity nominated by you; or Controlled Trust, being a Trust in relation to which you, a member(s) of your Immediate Family or a corporation controlled by you: With the staff member is as a trustee or a director of a corporate trustee of a Self Managed Super Fund; Where the staff member is entitled to more than 50% of the whole beneficial interest; or Where the staff member controls the Trust. Example and expansions of terms used in this Policy are for description only and are not exclusive. Other securities not specifically noted are also included in the controls established by this Policy. 1.2 Reason for this policy This policy is to ensure that all staff are aware of their obligations in relation to the declaration, establishment and trading of Staff and Staff Related Accounts, and the significant impact of ASIC and ASX regulatory requirements on staff. It is compulsory for Lonsec Research staff to direct their personal and related listed security transactions through accounts established and maintained with the Lonsec Fiscal Holdings Pty Ltd (LFH) subsidiary business, stockbroker Lonsec Limited, trading as Lonsec Stockbroking, in accordance with this policy and Lonsec Limited`s. All Staff and Staff Related Accounts must be declared during your induction, or whenever subsequently opened, and identified accordingly in Lonsec Limited s system. 1.3 Relevant Lonsec research policies This policy is to be read in conjunction with: Conflicts of Interest Policy Ethical Dividers Policy; and any other policy or procedure which forms part of Lonsec Research and LFH Group Compliance program. 1.4 Effective date January This Policy shall be effective from January 2013 and is subject to regular review by the Lonsec Research Executive in conjunction with LFH Group Compliance to ensure its currency with Lonsec Research s statutory obligations. P 3-9

4 2. Scope A reference to Staff (i.e. a staff member) includes all full/part time and full time casual persons, whether they be director, employee, consultant, or authorised representative for as long as they are working within the premises of Lonsec Research. Consultants or Temporary Staff under contract for greater than three months are expected to comply fully with the procedures outlined in this chapter while those under contracts for less than three months are expected to comply with the spirit of this Policy. The Executive in consultation with LFH Group Compliance has the final discretion on sub contractors or agents. 2.1 Special requirements for Research Analysts A Research Analyst is not to deal in the financial products of the issuers which he or she covers (and their related issuers) during the preparation of a major Research Report. Exceptions to this condition must be obtained from the Executive. 2.2 What about staff or staff related personnel superannuation funds? This policy applies to Staff or any Staff related Self Managed Superannuation Fund or to any other complying superannuation fund where you have the ability to direct investments into specific financial products or fund managers. It does not apply to cash contributions or contributions into default options within your fund, i.e. balanced, growth, income etc. 2.3 What about investment clubs and syndicates, and discretionary accounts managed by someone else? Prior to Staff forming an internal investment syndicate or club they must obtain prior permission from LFH Group Compliance. LFH Group Compliance must be advised of the name and membership of the club, and of any changes to the membership or constitution thereafter. The club s rules and subsequent amendments to them must be provided to LFH Group Compliance for notation. It will be assumed that each transaction is undertaken for the equal benefit of all members unless advised otherwise. The account name should include staff syndicate or investment club. The usual order authorisation procedures apply (see Section 3) and requests must include the names of all members of the syndicate or club. Accounts held by Staff at other ASX Participating Organisations or through a financial service provider are to be closed unless authorised under Section 7 or agreed in accordance with LFH Group Compliance and Lonsec Stockbroking s Exceptions to Policies procedures. 2.4 Which financial products are covered? This Chapter covers all products, whether foreign or Australian, which includes: Financial Products, whether equity or debt, whether issued by a corporation or other entity (e.g. unit trust, Managed Funds, MIS), and whether or not the financial products are quoted (or expected to be quoted) on an Exchange (e.g. shares, company options, instalment receipts, convertible notes, forfeited contributing shares purchased at auction). This includes Securities or other Financial Products issued by government, local authorities, public authorities or international agencies. Equity Derivatives, whether quoted on an Exchange or not (e.g. CFDs, Exchange Traded Options, Warrants), including those having an underlying Market Index in addition to those having an underlying security. Futures, including Exchange Traded Options over Futures, on currencies, interest rates, commodities, indices or equities (but not spot foreign currency transactions). Over the Counter Products of any nature. 2.5 Are dealings in any financial product exempt? The procedures and restrictions detailed in this Chapter do not apply to Staff or Staff Related dealings in: Bank Bills, Certificates of Deposit and similar products negotiated directly with your Bank; or Cash Management Trust units (i.e. deposits and withdrawals from a Cash Management trust). Insurance products. 2.6 Rights or bonus issues, takeover offers From time to time, as a holder of financial products, your holding may be subject to a split or consolidation or you may become entitled to rights, bonus or other issue of financial products by the issuer or related issuer or takeover offer. In these circumstances no market dealings are involved. The acquisition of financial products by these means falls outside Sections 3 and 4 of this policy. Any market sale of an entitlement or the purchase of more to top up is subject to Section 3. If a topup is facilitated directly by the issuer, then neither Sections 3 nor 4 apply to the transaction. Subsequent market dealings involving those financial products acquired under this section must be transacted through Lonsec Stockbroking. 2.6 Records of holdings Staff are obliged to maintain a register of holdings, including both ASX listed Financial Products and Non ASX listed Financial Products. The Registers will be monitored and reviewed periodically, but LFH Group Compliance can at any time demand to see the register to ensure it conforms and meets ASIC requirements. P 4-9

5 This requirement will be met for ASX Listed Financial Products if staff are Broker Sponsored by Lonsec Stockbroking and all ASX listed securities are held under Lonsec Stockbroking sponsorship. For sponsored requirements (see Section 3). Staff who take up IPO/New Issues should do so with issued securities instructed to be held under Lonsec Stockbroking sponsorship. Where issued stock is Issuer Sponsored, Staff must initiate Lonsec Stockbroking sponsorship upon receipt of an Issuer Sponsorship notice. Where Staff intend to hold a specific Financial Product as Issuer, the circumstances must be advised to LFH Group Compliance and recorded on a register of Staff member s holdings e.g. one off shareholding in name of child or in different format to CHESS details. 3. Market dealings on staff & staff-related accounts All secondary market dealings by Staff and Staff related accounts must be executed by Lonsec Stockbroking unless exception is granted and will be subject to Client Order and Allocation Precedence requirements and settlement performance obligations (See Section 5). 3.1 New staff account procedures When a staff member wishes to open a new Staff or Staff related account, he or she must complete and sign off a Lonsec Stockbroking New Account Application Form. The completed forms must be forwarded to LFH Group Compliance before the new account is processed. 3.2 Broker/CHESS sponsorship Lonsec requires all Staff and Staff related accounts to be Broker Sponsored by Lonsec Stockbroking. Any exceptions to this requirement must be approved by the Executive and advised to LFH Group Compliance Being Broker Sponsored by Lonsec Stockbroking enables us to identify your holdings by a Holder Identification Number (HIN). Having a HIN improves settlement efficiency as the Settlements Division has computerised records of your holdings. 3.3 Existing HIN Any HIN from a former/existing Broker relationship can be transferred to Lonsec Stockbroking control to preserve present instructions. Staff establishing a new Lonsec Stockbroking account should indicate a HIN transfer and liaise with Lonsec Stockbroking middle office who will process HIN transfer. 3.4 Margin lending Staff who use a margin lending facility with their account must execute all orders through Lonsec Stockbroking. 3.5 Options trading or CFDs Lonsec Stockbroking does not facilitate option trading or CFD trading (derivatives). Staff and Staff related accounts are not prohibited from trading derivatives. However, Lonsec Research in conjunction with LFH Group Compliance reserves the right to restrict derivatives trading accounts and requires staff to advise LFH Group Compliance of any derivatives trading account they hold. Staff who trading derivatives should note that all Option and CFD transactions must be authorised in the same manner as securities transactions and are subject to hold periods. (see 3.7 below) 3.6 Confirmations Lonsec Research allows the operation of an account through another Broker for CFD or Option trading or any other accepted reason. Where a trading account is held with another entity LFH Group Compliance must receive an copy of each and every confirmation issued upon a transaction addressed to mailto:staffconfirmations@lonsec.com.au Lonsec Stockbroking s preference is to issue electronic confirmations and will use internal address details where an external address is not provided. 3.7 Prior written authorisation required A written Staff Order must be completed for each proposed transaction using dedicated Staff order pads (retained by Lonsec Stockbroking) for all securities transactions for Staff and Staff related Accounts. FOR ASX LISTED EQUITIES TRADED THROUGH LONSEC: FOR OTHER SECURITIES AND PRODUCTS OR ASX LISTED EQUITIES TRADED THROUGH OTHER ENTITY: BLUE FOR BUY AND PINK FOR SELL (INCLUDING EACH NEW ORDER, ORDER AMENDMENT OR CANCELLATION) WHITE ORDER BOOK (INCLUDING EACH NEW ORDER, ORDER AMENDMENT OR CANCELLATION) P 5-9 Note: All orders executed for Staff and Staff related accounts must be completed in paper form and duly authorised, along with signing the following clause In placing this order I acknowledge that I am not in possession of any information that is considered inside information and therefore not currently generally available. I am also fully aware of my obligations as described in the Lonsec Research Pty Ltd Ethical Dividers policy and Procedures and I will be subject to the Company s Disciplinary Policy that may result in the termination of my employment or termination of contract with the Company or its related entities if I fail to do so.

6 3.8 Authorisation Authorisation MUST: be given in writing by one of the Staff Order Authorisation Officers. If in the unlikely event that there are no Authorised Officers available then the delegated Authority Officers can perform this function; and be given PRIOR to placement of the order with a Lonsec Stockbroking Adviser, Dealer or DTR. Those able to authorise ASX listed equity orders ( Staff Order Authorisation Officers ) are: Paul Pavlidis RM Lonsec Research Amanda Gillespie RM Lonsec Research Michael Elsworth RM Lonsec Research Delegated Authority when Authoriser is not available Member of LFH Group Compliance Those able to authorise orders in Non ASX listed Securities and Products ( Staff Order Authorisation Officers ) are: Paul Pavlidis RM Lonsec Research Amanda Gillespie RM Lonsec Research Michael Elsworth RM Lonsec Research Delegated Authority when Authoriser is not available Member of LFH Group Compliance BEFORE giving authorisation, Staff Order Authorisation Officers MUST: ensure ALL necessary Order detail is recorded on the Staff Order; ensure the security information clause has been signed; take into account the circumstances of the proposed transaction (e.g. whether the Staff or Staff Related Person may have obtained inside/confidential information in the course of his/her duties) and anything which might materially affect the price of the financial product ( e.g. size of transaction, liquidity of stock, timing of order,); consider the Restricted List and trading embargoes (i.e. staff may not be permitted to sell or buy when they wish to); ask whether the staff member has sufficient cleared funds or holdings to cover settlement (see Section 5). Authorisation is to be given by writing the following on the Staff Order; Signature of Authorising Officer; together with Date and time of authorisation. Note: A person is not permitted to authorise his or her own dealings. All authorisations are to be in writing. 3.9 Restricted list The Restricted List forms part of Lonsec Research and LFH Group s embargo and Ethical Dividers procedures. The List is maintained by LFH Group Compliance from information provided when an Ethical Divider has been established and by advice from staff. Issuers and financial products will be placed on the List once it is publicly known that the LFH Group is involved in a corporate transaction which may give it access to price sensitive information not generally known to the market or where the LFH Group holds other information requiring a control over staff trading in that security to ensure the perception of insider trading does not arise. Accordingly, dealing in the financial products of the issuers listed will generally be PROHIBITED for Staff and Staff Related Accounts. If any exceptions to this rule are to be granted, this must be authorised. The Restricted List is not broadly known. When a security is placed on the Restricted List, LFH Group Compliance will advise Lonsec DTRs to refer all orders to Compliance before placement. LFH Group Compliance will advise authorisers for White Book orders to refer all approval requests. LFH Group Compliance will either approve the order or advise the Staff member that it cannot be approved at present. Affected Staff should treat such advice as Inside Information and discuss with no one Trading embargo release of research report Where Lonsec Research coverage is known or expected to influence the market behaviour of clients, trading by Staff and Staff Related Accounts in the financial products of the issuer(s)/company(ies) in question may be banned for a specified period before and after release (usually 48 hours either side) of a major Research Report which commences coverage or changes a current recommendation. Analysts and Research staff are not to deal on their Staff or Staff Related Accounts in financial products related to an issuer known to be the subject of material, unreleased research or portfolio reconfiguration Short selling Short selling of stock by Staff or Staff related accounts is strictly prohibited. Staff and Staff related accounts can gain exposure to shorts by trading derivatives or ASX listed put warrants. P 6-9

7 3.12 Placing the order Once the Staff ASX Listed Order is signed by Staff and authorised, the order is placed with a Lonsec Stockbroking Adviser, Dealer or DTR in the usual way. Orders for options and CFDs or ASX listed stock where executed by entity other than Lonsec can then be placed by the relevant staff member only, following Staff signing authorisation being provided. Orders must not be placed verbally, with the paper work to follow. The DTR must check that order details are completed in full and refuse incomplete orders. It must be clear that the Account is a Staff or Staff Related Account to ensure compliance with Client Order/Allocation Precedence obligations Front-running prohibited Orders are not to be timed to take advantage of possible market movements caused by client orders, including Lonsec Stockbroking clients, which have been received or are expected. Staff and Staff related accounts are not to buy or sell those or related securities, futures contracts or other financial products while in possession of knowledge of potential client orders Order are valid until cancelled The obligation to manage incomplete orders is the Staff member who placed the order. Unexecuted orders, due to order limits, market conditions or any other reason, will remain in the market until they are cancelled by the Staff member, Lonsec Stockbroking or purged by ASX Market Control Orders may be withdrawn at any time LFH Group Compliance reserves the right to cancel some or all unexecuted Staff orders, from ITS at any time. In certain circumstances Lonsec Stockbroking may allocate a part filled or completed Staff order to a client ANY amendments must be authorised All amendments to Staff order price or volume limits require PRIOR authorisation by the process applying to new orders Minimum holding period is 48 hours Purchases must be held for a MINIMUM of 48 hours from the time of execution. Weekends and Non Trading Days are NOT included in the calculation of the 48 hour period. Day Trading is strictly prohibited. Exceptions to this rule can only be granted by LFH Group Compliance, who will consider the circumstances of the trade Use of Lonsec Stockbroking suspense accounts prohibited Executions on behalf of Staff or Staff Related Accounts must be booked directly to the Staff account. Lonsec Stockbroking suspense and consolidation accounts must only be used for client business. Note: NO Staff or Staff related trades are to remain un booked overnight in accordance with Lonsec Stockbroking policy Dealings monitored, market activity may be limited or stopped LFH Group Compliance reserves the right to limit or stop some or all dealings on Staff and/or Staff related accounts. Any irregularities or unusual activity are investigated. If settlement requirements are not met or transaction activity (by time spent, value and/or number of transactions) on a Staff or Staff related account is considered excessive or likely to distract the staff member from his or her duties, then dealings by the staff member s own or related accounts may be limited (i.e. made subject to any conditions Executive Management imposes) or stopped for a specified period. P 7-9

8 4. Allocation to staff & staff related accounts Staff and Staff Related Accounts may receive allocations in underwritings, sub underwritings and placements of equity or other financial products by Lonsec Stockbroking if client demand can be met. 4.1 Allocation criteria for issues formally involving Lonsec Stockbroking Allocations to Staff and Staff Related Accounts will be coordinated by the Head of Desk and a Director. For each IPO, LFH Group Compliance must be notified of the limits and terms of participation and of the Staff and Staff Related Accounts participating. Allocations and holding periods will be determined by the Lonsec Limited Executive Committee for each issue. Lonsec Stockbroking will comply with restrictions imposed by the Issuer/Seller. Retraction of a Staff commitment to an allocation will only be permitted if unforeseen and exceptional circumstances arise. Any exemptions to this policy will be determined by LFH Group Compliance in consultation with the Executive. 4.2 Non-public information Staff may be subject to additional policies and restrictions by virtue of their positions and their recent access or proximity to commercially and market sensitive information. 4.3 New Issues not involving Lonsec Stockbroking Staff and Staff Related Accounts are permitted to apply or subscribe for financial products underwritten, sub underwritten or in general allocation managed by either an ASX Participating Organisation or an AFSL holder other than Lonsec Stockbroking. If staff participates in a firm allocation offered by an ASX Participating Organisation or an AFSL holder they must provide immediately to LFH Group Compliance, a copy of the completed documentation. Where an allocation is received, that is not sponsored by Lonsec Stockbroking, Staff must initiate sponsorship with Lonsec Stockbroking upon receipt of a holding statement. LFH Group Compliance must be informed immediately of any allocation. In accordance with Market Dealing Rules (refer Section 3), sale or other market dealings in the financial products allocated are subject to a minimum holding period of two days and must be transacted through Lonsec Stockbroking. 5. Settlement Settlement of dealings by Staff and Staff related accounts must: not involve any subsidiary of the LFH Group lending, making funds available or otherwise extending credit for purchases or allocations; and be facilitated by the account holder (i.e. staff to provide ALL the information Settlements requires) in a timely, efficient fashion as required by Lonsec Stockbroking settlement staff. 5.1 Secondary market dealings On-market/off-market purchases Sufficient Cleared Funds must be available in the settlement account by 10.00am on the 3rd business day following the date of the transaction (i.e. T+3) Where settlement is partly or totally reliant on settlement of a sale(s) of financial products, the sale must be executed on or before the date of purchase. If sale proceeds are insufficient to cover the purchase(s), additional funds must be available in the settlement account. It is mandatory for Staff and Staff Related Accounts to provide a direct debit/credit authority and to ensure at all times sufficient Cleared Funds are available in the settlement bank account On-market/off-market sales Sufficient holding must be available by the time and date specified on the contract note (i.e. T+3). Where Staff and Staff Related Accounts are selling holdings which are NOT Broker Sponsored by Lonsec Stockbroking, the Shareholder Reference Number (SRN) and/or delivery detail must be provided on the Staff Order. Sales must not be placed for stock sponsored by another entity, except for holding maintained with a margin lender. Under NO circumstances are sales to be made where, at the time of the sale, the relevant Staff or Staff Related Account does not own the security (See 3.11) Fail fees Even when settlement fails through no fault of the staff member or Lonsec Stockbroking (e.g. margin lender s fault), the Staff or Staff Related Account will bear any fail fees. P 8-9

9 5.1.4 Derivative products not traded on ITS Dealings in Exchange Traded Options, CFDs, LEPOs or Futures permitted by Section 2 must be settled as required (generally T+1) by the licensed executing intermediary. Settlement regulations do not permit them to extend credit Purchases or sales failure to settle as required Lonsec Stockbroking will act to ensure its compliance obligations are met, which may include exercise of its right to sellout or buy back sufficient securities or financial product on behalf of the Staff or Staff Related Account to cover the exposure, at the risk of the account holder. Any remaining deficiency would then be payable immediately. All failed settlements on a Staff account must be advised to LFH Group Compliance by back office staff managing failed settlements. 5.2 Primary market dealings Lonsec Stockbroking is prohibited from paying application, subscription or exercise (e.g. IPO, rights exercise, instalment receipt/company option) monies on behalf of Staff or Staff Related persons or entities unless sufficient cleared funds are first paid to Lonsec Stockbroking. 6. Reporting new staff & staff related accounts To ensure compliance with Client Order/Allocation Precedence, Order Authorisation and related regulatory requirements, all staff of Lonsec Research must declare/confirm: at induction, all Staff and Staff related persons or entities (refer to definitions) for which an account is to be opened; annually, all Staff and Staff Related persons or entities and their Accounts at the same time as completing the Annual Affiliation Reporting Statement Questionnaire; the opening of a new Staff or Staff Related Account by having the New Account Application Form checked by LFH Group Compliance as stipulated in section 3 New Staff Account Procedures. 7. Accounts/dealing at other firms 7.1 Accounts & dealing at other firms It is Lonsec Research Policy that all staff and staff related accounts (refer definitions) which facilitates trading in ASX listed products are to be held, and Broker Sponsored, by Lonsec Stockbroking. Upon commencement of employment with Lonsec Research accounts held at other ASX participating organisations must be closed and the HIN and all holdings are to be transferred. This policy is a vital component to Lonsec Research s Conflicts of Interest & Risk Policy as it allows LFH Group Compliance to closely monitor staff trading against the Group s corporate and research activities, and as such the LFH Group Management and Board will view breaches of this policy as a serious matter. Staff are strictly prohibited from operating an existing account, or establishing an account with another ASX participating organisation, unless an exception is approved Exceptions to this policy must be approved by LFH Group Compliance and a Director, examples which will be considered are as follows if Lonsec Stockbroking does not provide direct access to the market for a particular product (e.g. ASX Exchange Traded Options, LEPOs, CFDs), and a member of their Immediate Family (refer definitions) is employed by or conducts their trading with another ASX Participating Organisation (i.e. a Stockbroker) and they operate their account independently of Staff. To do so requires: For staff accounts relevant regulations to be met including the usual PRIOR order approval by Lonsec Research and dispatch of copies of contract notes by the executing party for all such transactions directly to LFH Group Compliance ; and providing in advance the detail of the type and number of all accounts held at the other firm. Following approval to open an account(s) and commence dealings elsewhere, all orders: must be authorised (including any amendments or cancellation) in accordance with the usual procedure described in Section 3. Authorisation may be denied; copy of all confirmations to be provided to LFH Group Compliance; and subject to the usual and relevant requirements of this policy. For staff related accounts LFH Group Compliance must receive a letter from the immediate family member requesting permission to operate an account with an entity other than Lonsec Stockbroking. Arrange for a copy of each confirmation issued by the executing party for all such transactions directly to be ed to LFH Group Compliance. Detail of holdings held elsewhere must be maintained by the staff member and be notified and made available for inspection to LFH Group Compliance. P 9-9