GENERAL
AS Redgate Capital has approved a Conflict of Interest Policy (hereinafter the “Policy”) which sets out the principles to be followed by AS Redgate Capital and its subsidiaries (hereinafter jointly the “Company” or “Redgate Group”), which govern the Company’s ethical standards and the identification and prevention of potential conflicts of interests. The Policy additionally regulates the basic conditions of employment with the employees in the Company as set out in the employment contracts.
The Policy provides the following:
• the Company’s general principles for the mitigation of a conflict of interests;
• the obligations of the employees in the event of a conflict of interests;
• policies for the execution of personal transactions by employees.
The Policy applies to all the employees of the Company and to the cooperation partners in a contractual relationship with the Company unless respective agreements concluded with them provide otherwise. The Company’s employees must familiarise themselves with the Policy and carefully comply with the provided terms and conditions. Failure to comply with the Policy may result in the employee’s liability, including the termination of the employment contract with the employee. Furthermore, non-compliance with the principles of conflicts of interests may result in proceedings by supervisory bodies or clients against the Company and its employee, and the filing of financial claims.
DEFINITIONS
“Conflict of Interest“ is a clash of conflicting interests, that is, a situation in which different persons have different personal or economic interests and, in addition, are bound by due diligence or trust. Conflicts of interests may arise, for example:
• between the Company and the client;
• between an employee of the Company and the client;
• between a third party representative of the Company and the client;
• between the Company and the employee;
• between clients with different interests of the Company, where the Company is in the centre of the relationship;
• between different departments and/or employees of the Company;
• between the different roles of an employee;
• between the Company and its shareholder;
• between the Company and its service provider/supplier.
„Clients” are the clients of any service provided by the Company.
MANAGING CONFLICTS OF INTEREST IN PROVISION OF INVESTMENT SERVICES
The Company’s managers and employees must act in the best interests of the Company’s clients, while acting with sufficient expertise, honesty, accuracy, and diligence in their activities at the same time. To fulfil its due diligence and loyalty obligations, the Company takes measures to identify, mitigate, prevent, and/or disclose conflicts of interests within its organisation, with its clients, and between its clients, to prevent conflicts of interests from adversely affecting the interests of its clients.
Conflict of interest between business lines
A conflict of interests may arise between Wealth Management and Capital Raising units in relation to the different interests of the units and their clients, e.g., on the one hand the issuer is a client of the Capital Raising unit for underwriting an issue; on the other hand, the Wealth Management unit is offering securities to investors, etc. To mitigate the Conflict of Interests, information about clients and ongoing projects is not shared between the units. The units have non-overlapping employees, and work files are kept under separate access rights.
Financial interests
The Company may own a low number of financial instruments of the issuer whose financial instruments are distributed to Clients. The Company generally invests in at least one note of each issuer on whose bond issuance the Company has led. The purpose of strategic investments is to achieve a similar treatment to investors, including similar access to issuer’s information.
Inducements
A conflict of interests may arise if the Company grants monetary or non-monetary remuneration to a third party or receives monetary or non-monetary remuneration from a third party in connection with the provision of an investment service or an ancillary service to a client (e.g., by distributing securities to investors in execution-only sales and receiving a fee from the issuers).
In case of receiving and/or paying remuneration to/from third parties, it will be disclosed to the client prior to the provision of the respective service, including the nature of the remuneration and the amount or calculation methodology.
Divergent interest between clients
A conflict of interests may arise between clients of the Wealth Management unit, e.g., if both clients wish to acquire or transfer the same security. The Company has a Best Execution Policy, which establishes measures to ensure that the order of the receipt and transmission of orders is taken into account, as well as rules on the principles of distribution of securities.
Remuneration
A conflict of interests may arise if the remuneration policies of a manager or an employee of the Company are such that the interests of a client or a client group may be adversely affected when executing transactions on behalf of the client or the client group. The remuneration policies of the Company are generally based on the principle that the results of a longer period (quarter, year) are recognised, not individual transactions.
Inside information
A conflict of interests may arise if the Company’s employees execute personal transactions, e.g., in securities, using information obtained from the services provided to a client or otherwise damaging the client. According to the internal regulations of the Company, managers, and employees, as well as persons connected to them, are prohibited from the execution of securities transactions on the basis of inside information. Moreover, it is forbidden to execute other transactions based on information obtained in the course of providing services to a client if such transactions damage the clients, set the employees interests above client’s interests, or could be consider trading based on inside information.
Investment research
AS Redgate Capital does not currently prepare investment research, which directly or indirectly offers or recommends an investment strategy relating to one or several financial instruments or their issuers, including expressed opinions on the current or future value or price of such financial instruments, (offering or recommending an investment strategy relating to a specific industry or market in a way that it offers a relevant view on the financial instruments or classes of assets typical of a particular sector).
REPORTING
All employees are obliged to report to the Compliance Officer about any circumstances that cause or may cause a Conflict of Interest. The Compliance Officer will register the situation, analyse it and assign the task at hand to another employee or if necessary, conducts an additional review. In addition, all employees must annually submit and update their declaration of economic interests.
In case a Client or a third party would like to report any circumstances that may cause a Conflict of Interest, please find the contact information of our Compliance and Risk Manager from the Team page.
If a Conflict of Interest has been identified that may impact the independence of mind of a member of the Management Board of Supervisory Council, the Compliance Officer informs the Financial Supervisory Authority about the situation and provides an overview of the mitigating measures taken.
