Atlas Capital Financial Services Limited (Regulated by the Cyprus Securities & Exchange Commission) Conflicts of Interest 10th of February 2015 1 P a g e
Contents 1. Introduction... 3 2. Scope of the policy... 3 3. Identification of possible conflict of interests... 3 4. Managing Conflicts of Interest... 4 5. Procedures and Measures... 5 6. Additional Measures... 6 6.1 Order Execution & Selection of Custodians... 6 6.2 Portfolio Management and Investment Advice... 7 6.3 Investment Research... 7 6.4 Personal Transactions... 8 6.5 Forbidden Transaction Practices... 8 7. Disclosure... 9 8. Amend/Review... 9 2 P a g e
1. Introduction Atlas Capital Financial Services Limited (hereinafter referred as ACFX or the Company ) is an investment Company that operates as an Online Forex and CFD Broker. ACFX is incorporated (Certificate of Incorporation No. 214806) in the Republic of Cyprus through the Department of Registrar of Companies and Official Receiver. ACFX is authorised and regulated by the Cyprus Securities and Exchange Commission ( CySec ) (License No. 085/07) and operates under the Markets in Financial Instruments Directive (EU Directive 2004/39/EC) ( MiFID ). 2. Scope of the policy ACFX has established a Conflicts of Interest Policy (hereinafter referred to as the Policy ) in an attempt to take all reasonable steps to identify and manage any conflict of interest between itself, including its managers, Directors, employees, tied agents, or any person directly or indirectly linked to Company (hereinafter called related persons ) and its clients or between one client and another which may arise during the course of its business activities. The aim of this Policy is to ensure that the Company or any of the personnel of the company act fairly, honestly, professionally and at the highest level of integrity in relation of its clients. 3. Identification of possible conflict of interests Conflict of interest may arise between: The company and a Client; A relevant person and a Client; A company of the Group and a Client; Two or more Clients of the Company in the course of providing investment or ancillary services For the purposes of identifying the types of conflict of interest that arise in the course of providing investment and non-core services or a combination thereof and whose existence may damage the interests of a client, the Company takes into account, whether the Company or any related person, or a person directly or indirectly linked to the Company, is in any of the following situations: 3 P a g e
The Company or that person is likely to make a financial gain, or avoid a financial loss, at the expense of the client; The Company or that 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; The Company or that person has a financial or other incentive to favor the interest of another client or group of clients over the interests of the client; The Company or that person carries on the same business as the client; The Company or that person receives or will receive from a person other than the client an inducement in relation to a service provided to the client, in the form of monies, goods or services, other than the standard commission or fee for that service. 4. Managing Conflicts of Interest The company has set up internal policies and has an in-house department that is responsible for identifying and managing potential conflicts of interests. In general, the procedures and controls that the company follows regarding conflicts of interest include the following measures: a) Effective procedures to prevent or control the exchange of information between relevant persons engaged in activities involving a risk of a conflict of interest where the exchange of that information may harm the interests of one or more clients. b) The separate supervision of relevant persons whose principal functions involve carrying out activities on behalf of or providing services to, clients whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the Company. c) The removal of 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. d) Measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out investment or ancillary services or activities. 4 P a g e
e) Measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate investment or ancillary services or activities where such involvement may impair the proper management of conflicts of interest. Further to the above, it is the duty of the Compliance Officer to abide by the following principles and act in such a way by continuously developing, designing and re-designing the appropriate procedures and measures, so as to prevent and resolve potential conflicts of interest. 5. Procedures and Measures The company maintains and operates effective organizational and administrative procedures to manage the identified conflicts of interest. For the management and prevention of conflicts of interest, the company s procedures and controls could include the following, as applicable and relevant: A need to know policy governing the dissemination of confidential or inside information within the Group The Company shall have in place Chinese Walls: No communicating of information and data between the various business units of the Company and especially, whether the Company s officers and employees have access to data in the possession of business units to which such access is not permitted. In particular, the necessary Chinese Walls shall be erected between the various organizational units of the Company, so that to prevent the flow of confidential information in a way that which adversely affect the interest of the Clients. In this respect, Chinese Walls will need to exist between the Own Account Department, Portfolio Management Department, the Advice to Undertakings Department and the Investment Research Department, as applicable. In addition, the following procedures and measures should be followed: 1. To ensure any reports on financial instruments which may affect their price are not made known to members of staff before being announced to the public. 2. The Compliance Officer shall ensure that the Executive Directors or other hierarchical officers do not exercise inappropriate influence over the way in which a relevant person carries out the provision of investment and ancillary services. This shall be verified by frequent personal interviews with all Heads of the Departments. 3. The Compliance Officer shall be responsible for maintaining such Chinese Walls, by means of regular checks and will be monitored by the Company s Internal Auditor. 5 P a g e
4. The Company shall establish user levels governing access to the Company s electronic data and information. 5. The employees of the Company shall refrain from discussing confidential information in public areas such as hallways, restrooms or social gatherings. 6. The employees of the Company shall ensure that documents containing confidential information will not be accessible by unauthorized persons. Segregation of duties that may give rise to conflicts of interest if carried on by the same individual Personal account dealing requirements applicable to relevant persons in relation to their own investments A gifts and inducements log registering the solicitation, offer or receipt of certain benefits The prohibition of external business interests conflicting with our interests as far as the Group s officers and employees are concerned, unless board approval is provided A policy designed to limit the conflict of interest arising from the giving and receiving of inducements Compliance Department to monitor and report on the above to the Company s Board of Directors The Internal Auditor shall supervise all the procedures and controls regarding the company s conflicts of interest policy, at least once a year and report to the company s Board of Directors Establishment of the four- eyes principle in supervising the Company s activities The Company shall consider the possibility of avoiding conflicts of interest by exclusion from projects or refusal of mandates. Pay and bonuses are linked to the profits of the Company or the business or department where an employee works. Pay and bonuses linked to the performance of another department, with possible conflicting interests, is avoided at all times. 6. Additional Measures 6.1 Order Execution & Selection of Custodians In the instance of the Execution department and Straight Through Processing (STP) models in the field of Forex business the Company has in place electronic systems which ensure that all orders are instantly transmitted for execution to the liquidity provider while there is no differentiation or discrimination on the speed of transmission of Client orders depending on the characteristics of the relevant Client or the order itself. 6 P a g e
6.2 Portfolio Management and Investment Advice The relevant Company departments shall ensure strict implementation of the Assessment of Suitability in order to ensure adequate monitoring of compatibility of the provision of portfolio management and investment advice services to Clients. For the allocation of investment opportunities which may be suitable to more than one (1) Portfolio Management Client, the written consent of the Senior Management will be required before allocating these opportunities. For transactions between Clients of the Company, the Senior Management personally shall decide whether to allow the transaction by notifying the relevant Clients, or not allow the transaction all together. In case whether a transaction may be in jeopardy of not being considered at an arm s length due to the involvement/participation of other Clients, the Company, relevant persons or members of the group as counterparty, agents or service providers, the Senior Management should consider the possibility of obtaining external advice from an expert third party. 6.3 Investment Research When investment research material produced by the Investment Research Department is not objective it is then labelled as marketing communication while the Company is required to ensure that any such recommendation contains a clear and prominent statement that (or, in the case of an oral recommendation, to the effect that) it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research. The disclaimers accompanying investment research material will disclose potential conflicts of interest. The undertaking of personal transactions or trading in financial instruments to which investment research relates, or in any related financial instruments by financial analysts and other relevant persons with knowledge of the likely timing or content of that investment research which is not publicly available or available to Clients will be prevented. 7 P a g e
In circumstances not covered by the point above, the undertaking of personal transactions by financial analysts and any other relevant persons involved in the production of investment research in financial instruments to which the investment research relates, or in any related financial instruments, contrary to the current recommendations, will be forbidden except in exceptional circumstances and with the prior approval of a member of the Company s Senior Management. The acceptance of inducements given by those with a material interest in the subjectmatter of the investment research to the Company itself, financial analysts, and other relevant persons involved in the production of the investment research will be prohibited. The promising to the issuers of favourable research coverage by the Company itself, financial analysts, and other relevant persons involved in the production of the investment research will be prohibited. 6.4 Personal Transactions The Company s personnel having access, because of their position and access in the Company to trading information of Clients of which may influence the prices of financial instruments, subject to the policy of the Company on Personal Transactions, as this is maintained and may be amended, by the Compliance Officer: a) Must inform the Company of their investment accounts b) Are prohibited from keeping accounts in other financial services firms without the Company s authorization and are prohibited from performing own account transactions without the permission of the Company c) Are obliged to authorize the Company to directly take delivery from the financial services company where they keep such accounts, of updates concerning the transactions performed. d) Reports for compliance with these provisions shall be submitted to the Executive Chairman and monitored by the Company s Internal Auditor. 6.5 Forbidden Transaction Practices All the employees must be aware of the following forbidden transaction practices, and shall be their responsibility to inform the Compliance Officer immediately in case any of these appear: a) The provision to the Client of investment and ancillary services with the purpose of influencing the price of financial instruments for the benefit of the Company or related persons, particularly with respect to transactions that the Company or related persons are about to effect before or after the provision of the said investment and ancillary services 8 P a g e
b) The use of Client transaction information by the Company for own benefit or the announcement to third persons of such information c) The preferential treatment of Company members of staff at the expense of its Clients, during the provision of the investment and ancillary services to a Client d) The effect of transactions by members of the Company s staff and directors for their own account, or for the account of persons related to them, on the basis of confidential information which they acquire during course of their employment with the Company 7. Disclosure Where a conflict is identified the Company will, if its aware of it, disclose it to a client in a durable medium and include sufficient detail (taking into account the nature of the client) to enable that client to take an informed decision with respect to the service that gives rise to the conflict, prior to undertaking investment business for that client. If the company does not believe that disclosure is appropriate to manage the conflict, may choose not to proceed with the transaction or matter giving rise to the conflict. 8. Amend/Review The Company Investment Committee has the right to amend and/or review the current Policy at its discretion and at any time it considers is suitable and appropriate. The Investment Committee shall review and amend the current policy at least annually. 9 P a g e
Atlas Capital Financial Services Limited Address: 19 Promachon Eleftherias, P.O.BOX 54293 Agios Athanasios, 4103 Limassol, Cyprus Telephone: +357 25 501000 Fax: +357 25 501050 http://www.acfx.com info@acfx.com Conflicts of Interest Policy February 2015 10 P a g e