Conflicts of interest management policy

SUMMARY

finnCap Group plc, through its regulated subsidiaries, finnCap Ltd and Cavendish Corporate Finance LLP (together “finnCap”) provides or carries out a diverse range of financial services and activities, including corporate finance and capital markets activities, securities issuing, securities distribution, research, sales, trading and other investment business relating thereto.

finnCap may as a result have a material interest, or there may be conflicts of interest, in relation to the services carried out for clients.

finnCap is however bound by the FSA Principles for Business, and in particular Principle 8 which provides that “a firm must manage conflicts of interests fairly, both between itself and its customers and between a customer and another client.”  The FSA Handbook also contains further detailed rules on managing conflicts of interest.

Accordingly, we have organisational and administrative arrangements in place to take all reasonable steps to manage conflicts of interest that arise between the finnCap and its clients, and between its different clients, with a view to preventing such conflicts from constituting or giving rise to a material risk of damaging clients’ interests. On occasion we may have to decline to act for a client if conflicts cannot otherwise be properly managed.

 

IDENTIFYING CONFLICTS OF INTEREST

To identify the types of conflicts of interest that may arise, and which may entail a material risk of damage to clients’ interests, we take into account whether we, or an associate or employee of ours:

  • are likely to make a profit or avoid a loss at the expense of the client;
  • have an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of a client, which is distinct from the client’s own interest in that outcome;
  • have a financial or other incentive to favour the interests of another client or group of clients over the interests of the client;
  • carry on the same business as the client;
  • receive 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 fee or commission for that service.

Conflicting interests or duties may arise because:

  • finnCap, or its employees, may be dealing as principal, or have a long or short position, in the investments which are the subject of an activity performed for a client;
  • finnCap may be a financial or other adviser to, or have other business arrangements with, the issuer of such investments or any other party in connection with an activity performed for a client;
  • finnCap may be sponsoring a new issue in relation to such investments;
  • finnCap may be conducting an agency cross by matching one client’s order with the order of another client of finnCap;
  • finnCap may be giving advice and providing other services to one client in relation to investments which are the subject of an activity performed for another client;
  • finnCap may pay fees or commissions to an intermediary who has introduced a client to the firm;

 

MANAGING CONFLICTS OF INTEREST

We take all reasonable steps to treat clients fairly, and we require all members of our firm to comply with an independence policy which obliges them to disregard any interest, relationship or arrangement that we may have in relation to the client’s transaction or investment.

Entities and departments within finnCap have rules and procedures pursuant to their conflicts management arrangements to ensure that they operate independently of each other with systems and controls to ensure that there is no flow of information between them which would harm the interests of one or more clients.

Conflicts are managed using the following measures:

  • procedures to prevent or control the exchange of information e.g. between staff responsible for advising corporate clients of finnCap and staff providing investment advisory or management services to investment clients;
  • separate supervision of staff whose principal functions involve carrying out activities for or providing services to clients whose interests may conflict;
  • avoiding direct links between the remuneration of staff principally engaged in one activity and the remuneration of different relevant persons engaged in another activity, where a conflict of interest may arise;
  • avoiding remuneration arrangements that reward behaviour that disadvantages the interests of clients in favour of the firm or other clients;
  • procedures to prevent or limit any person from exercising inappropriate influence;
  • procedures to prevent or control the simultaneous or sequential involvement of a member of staff in separate services where such involvement may impair the proper management of conflicts of interest;
  • allocation policies in relation to orders placed for more than one client;
  • staff personal account dealing policies;
  • policies which require staff not to solicit or accept inducements that could conflict with our obligations to our clients, nor offer or give inducements which could conflict with the recipient’s obligations to clients;
  • detailed policies and procedures in place on the giving and receiving of gifts and hospitality;
  • disclosure to the client – where all other reasonable steps to manage a particular conflict of interest have failed.

The firm’s Compliance department is responsible for monitoring finnCap policies and procedures for identifying and managing conflicts of interest, and for ensuring that any significant issues identified as a result of this monitoring are reported to senior management and handled appropriately.

 

SPECIFIC DISCLOSURES

In all the cases set out below, the firm has arrangements in place to ensure that the payments do not impair compliance with the firm’s duty to act in the best interests of the client.

 

COMMISSION TO INTERMEDIARIES WHO INTRODUCE CLIENTS TO THE FIRM

finnCap may pay a share of the dealing commission and fees charged to the client to the intermediary who introduced the client to the firm. Information about any commission and fee sharing arrangement relating to their business are provided to the relevant clients, and further details will be provided on request.

 

Prevention of the Criminal Facilitation of Tax Evasion

Cavendish Corporate Finance LLP is committed to the prevention, deterrence and detection of (a) criminal tax evasion and (b) criminal facilitation of tax evasion.  Accordingly, the Company has adopted a policy for preventing the criminal facilitation of tax evasion (the “Policy”).  Details of the Policy relevant to external Associates of the Company are available on request.

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