Conflicts of Interest Policy

FCA Principle 8 (conflicts of interest) requires a firm to manage conflicts of interest fairly. This policy aims to ensure that when Allia C&C (the “Firm”) has, or may have, a conflict of interest between itself and its customer, or between a customer and another client, the Firm pays due regard to the interests of each customer and manages the conflict of interest fairly, thereby treating customers fairly.

Conflicts policy

Requirement for policy

The Firm must establish, implement and maintain an effective conflicts of interest policy that is set out in writing and is appropriate to the size and organisation of the Firm and the nature, scale and complexity of its business.

Prevention of conflicts

The Firm must maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of its clients.

Groups

Where the Firm is a member of a group, the policy must also take into account any circumstances, of which the Firm is or should be aware, which may give rise to a conflict of interest arising as a result of the structure and business activities of other members of the group.

Reasonable steps

If the Firm has:

1. a material interest in a transaction to be entered into with or for a customer; or
2. a relationship that gives or may give rise to a conflict of interest in relation to a transaction in (1); or
3. an interest in a transaction that is, or may be, in conflict with the interest of any of the Firm’s customers; or
4. customers with conflicting interests in relation to a transaction;

we will not knowingly advise, or deal in the exercise of discretion, in relation to that transaction unless we take reasonable steps to ensure fair treatment for the customer. “Reasonable steps” may be taken in one or more of the following ways:

1. disclosing an interest to a customer; or
2. establishing arrangements for independence and Chinese Walls; or
3. declining to act for a customer.

Disclosure

The following are examples of material interests or conflicts of interest that should be disclosed in a durable medium and in sufficient detail for the client to make an informed decision in the context of:

1. the Firm holding a proprietary position in an investment that we advise or arrange for a client;
2. a fund controlled or managed by the Firm or an associate taking a position in an investment that we advise or arrange for a client;
3. a member of staff trading personally in or with a fund controlled, managed or advised to a client by the Firm or an associate;
4. an employee of the Firm holding a stake in an investment that we advise or arrange for a client.

Independence

Procedures to ensure the requisite degree of independence include:

1. prevention or control of the exchange of information between 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;
2. the separate supervision of 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 Firm;
3. the removal of any direct link between the remuneration of persons principally engaged in one activity and the remuneration of, or revenues generated by, different persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities;
4. preventing or limiting any person from exercising inappropriate influence over the way in which a relevant person carries out services or activities; and
5. measures to prevent or control the simultaneous or sequential involvement of a person in separate services or activities where such involvement may impair the proper management of conflicts of interest.

Chinese Wall Arrangements

A “Chinese Wall” is an arrangement that requires information held by a person in the course of carrying on one part of the business to be withheld from, or not to be used for, persons with or for whom it acts in the course of carrying on another part of its business. In maintaining a Chinese Wall, the Firm may:

• withhold or not use the information held; and
• for that purpose, permit persons employed in the first part of its business to withhold the information held from those employed in that other part of the business;

but only to the extent that the business of one of those parts involves the carrying on of regulated activities, ancillary activities or, in the case of MiFID business, the provision of ancillary services.

Where relevant, the Firm maintains Chinese Wall arrangements which may be described as an established and effective arrangement to prevent confidential information, particularly unpublished price-sensitive information, which is known to individuals in one part of the Firm, from being conveyed to individuals in another part where this might give rise to a conflict of interest.

The arrangement may include physical barriers and procedural requirements to ensure separation. It may exist not only between the employees of one company and those of another in a group but also between different employees within a single company.

There are two essential elements:

• restriction of the communication of confidential information to those who ‘need to know’; and
• recognition that decisions in one business area behind a Chinese Wall must be taken in the interests of clients within that area, even though they may conflict with the interests of the Firm itself or clients in another business area.

It is not possible to provide a comprehensive definition of ‘confidential information’ but it includes information in respect of profit projections, dividend intentions etc. It also includes information such as the intentions of fund managers, market-makers’ positions and pre-publication research recommendations.