Conflict of Interest Policy
The purpose of this Policy is for the Company to design, maintain and operate effective organisation and administrative procedures to identify and responsibly manage and control conflict of interests arising in relation to its business and reduce the adverse effect such conflicts may have on the interest of its clients.
Identification of Conflict of Interest
All employees of the Company are responsible for identifying possible conflict of interest that may arise during the course of the Company’s business activity in providing investment or ancillary services or investment activities under the specified law without damaging the interest of its clients. In particular, situations where either the Company or the relevant person (directly or indirectly linked by control to the Company) is in a position of such conflict of interests that may occur, which can include, but not limited to the following:
a. The Company or a relevant person, or a person directly or indirectly linked by control to the Company, is likely to make a financial gain or avoid a financial loss, at the expense of the client.
b. The Company or a relevant person, or a person directly or indirectly linked by control to the Company, has an interest in the outcome of a service provided to the client, or of the transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome.
c. The Company or a relevant person, or a person directly or indirectly linked by control to the Company, has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client.
d. The Company or a relevant person, or a person directly or indirectly linked by control to the Company, carries on the same business as the client.
e. The Company or a relevant person, or a person directly or indirectly linked by control to the Company, 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 money, goods or services, other than the standard commission or fee for that service.
A relevant person is defined as follows:
a. a director, partner or equivalent, manager or tied agent of the firm;
b. a director, partner or equivalent, or manager of any tied agent of the firm;
c. an employee of the firm or of a tied agent of the firm, as well as any other natural person whose services are placed at the disposal and under the control of the firm or a tied agent of the firm and who is involved in the provision by the firm of investment services and activities;
d. a natural person who is directly involved in the provision of services to the investment firm or to its tied agent under an outsourcing arrangement for the purpose of the provision by the firm of investment services and activities.
Conflict of interest may arise between the following parties:
a. Between the client and the Company;
b. Between two clients of the Company;
c. Between the Company and its employees;
d. Between a client of the Company and an employee/manager of the Company;
e. Between Company’s Departments.
ST Services and its senior management team have defined and implemented internal procedures that are suitable and adequate in minimising and managing any potential conflict of interest throughout the Company’s organisational structure. The company’s has established independent units of Compliance and Internal Audit.
Management of Conflicts of Interest
Departments, independently used to monitor and manage potential conflict of interests on an on-going basis; in particular, and not limited to, by:
i. establishing the Policy in relation to conflicts of interest;
ii. providing training oversight and aid;
iii. monitoring compliance with arrangements;
iv. the oversight of conflicts management;
v. maintaining records in relation to conflicts of interest;
vi. Mapping exercise to identify potential conflicts of interest is conducted periodically by the Company, the results of which are used to create a Conflicts Register which is maintained by Company. This Register contains details of actual or potential conflicts that may arise between ST Services and its clients (or between clients of ST Services) and is an essential tool for the management of actual or potential conflicts of interest.; and
vii. Providing appropriate internal reporting to the Board of Directors.
The following procedures and measures have been adopted by the Company under this Policy that are essential for ST Services to ensure requisite degree of independence:
Measures to prevent or control the exchange of information between relevant persons engaged in activities involving a risk of a conflict of interest (i.e. by establishing a Chinese wall).
i. 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;
ii. Removal of any direct link between the remuneration of relevant persons principally engaged with 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;
iii. 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. Additionally, the person who decides or influences an individual’s bonus may exert undue influence over that individual’s integrity of judgment;
iv. Measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate investment or ancillary services or activities such as reception and transmission of clients’ orders and execution of clients’ orders.
Some of the suitable and adequate procedures implemented in the Company to prevent potential conflict of interest are as follows:
i. “Chinese Walls”, Chinese walls are essentially information barriers which are used to prevent inside or highly confidential information possessed by one part of the business from being inappropriately passed to, or obtained by, another part of the business. It is used as a way of managing conflicts of interests, individuals on the other side of the wall will not be regarded as being in possession of knowledge denied to them as a result of the Chinese wall. For example, where arrangements have been put in place to ensure that entities belonging to the same group operate independently of each other with effective Chinese walls, the entities shall not be deemed to have knowledge of each other for conflicts of interest purposes.
ii. “Disclosure of conflict of interest”, measures taken by the Company to manage conflicts of interest are not sufficient to ensure, with reasonable confidence that risks of damage to clients’ interest will be prevented, the Company proceeds with the disclosure of conflicts of interest to the client. Prior to carry out a transaction or provide an investment or an ancillary service to a client, the Company must disclose any actual or potential conflict of interest to the client. The disclosure will be made in sufficient time and in a durable mean and shall include sufficient detail, taking into account the nature of the client, to enable him/her to take an informed decision with respect to the investment or ancillary service in the context of which the conflict of interest arises. Clients will be given the opportunity to decide on whether or not to continue their relationship with us with no unreasonable obstacles.
iii. “Marketing Communication”, the Company shall 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 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.
iv. “Record keeping”, the Company keeps and regularly updates a record of the kinds of investment and ancillary service or investment activity carried out by or on behalf of the Company in which a conflict of interest entailing a material risk of damage to the interests of one or more clients has arisen or, in the case of an on-going service or activity, may arise. The following documentation shall be maintained for a minimum period of five years:
- this Policy, any functional variations if applicable;
- the Conflicts Log and the Conflicts Identification and Management Map;
- rules, procedures and processes;
- training material and training records;
- Conflicts of Interest Notification Forms;
- details of any review work carried out (including any decisions made on conflicts management); and
- any other documentation used to demonstrate the management of conflicts of interest.
v. Personal account dealing restrictions are in place for minimising the relevant person’s own transactions.
vi. Where organisational or administrative arrangements made by the Company to manage conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to client interests will be prevented, it shall clearly disclose the general nature and/or sources of conflicts of interest to the client before undertaking business on its behalf.
The Company has the right to amend the current Policy at its discretion and at any time it considers is suitable and appropriate; the Company shall review and amend the current Policy at least on an annual basis. The Policy is available for review by clients upon request and it is uploaded on the Company’s website.
If there is anything in this Policy you do not understand or have any further queries, contact us at firstname.lastname@example.org.