CONFLICTS OF INTEREST POLICY SUMMARY
- Policy Statement
ChangeFund from time to time will have interests which conflict with the interests of its clients, customers and associated bodies. It is also possible that conflicts could arise between such parties. In accordance with both of ChangeFund’s goals and values and applicable laws, regulations and principles, ChangeFund is required to manage conflicts of interest fairly. ChangeFund has established a conflicts of interest policy setting out the procedures and controls which help us identify and appropriately deal with conflicts of interest – actual, apparent and potential.
The potential for conflicts of interest to arise is a key consideration for ChangeFund, and as such, our conflicts of interest policy applies to all employees, (full-time, part-time, fixed term and casual employees), contractors, appointed representatives, or any persons directly or indirectly linked to ChangeFund, regardless of location.
- What is Confidential Information
Confidential information includes any non-public information relating to:
- a client, including personal information relating to the client, the client’s business or personal affairs (e.g. financial information, transactions that the client has undertaken or plans to undertake)
Restrictions in relation to confidential information
Under the law there is a duty of confidentiality owed by ChangeFund to its clients. There are 4 exceptions to the duty:
- where disclosure is compelled by law
- where there is a duty to the public to disclose
- where ChangeFund’s interests require disclosure
- where disclosure is made with the express or implied consent of the customer.
As a general rule employees must not disclose confidential information to a third party. If you are requested to disclose confidential information relating to a client of ChangeFund, you must immediately contact the Compliance Manager. ChangeFund employees must use their best endeavours to prevent the publication or disclosure of any confidential information. Confidential information must not be used for personal gain or benefit or for the improper advantage of any employee
ChangeFund employees must disclose, and take reasonable steps to avoid any conflict of interest (real or apparent) in connection with their employment. This may include actual, perceived or potential conflicts of interest and includes circumstances such as:
- involvement in assessment panel or committee
- decision-making by a delegate
- outside employment
- assessment and decision-making of a loan
- Conflicts of Interest Identification
ChangeFund has systems and protocols in place to identify potential conflicts of interest. Once a conflict has been identified procedures are implemented to ensure it is appropriately managed. Situations of particular concern include where an employee:
- is likely to make a financial gain, or avoid a loss, at the expense of the client
- 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
- has a financial or other incentive to favour the interests of another client or group of clients over the interests of the client
- carries on the same business as the client
- 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
- Potential Conflicts of Interest
Procedures are in place to manage all potential conflicts, across ChangeFund nationally and internationally (Australia and New Zealand). The following are examples of potential conflicts that may arise as a result of the ChangeFund business.
Family or business associate transactions:
An employee must not be involved in the assessment, approval or declining of a transaction that involves a member of their family or their business associate. These transactions must be assessed by another staff member and approved or declined by a staff member who has no conflict of interest. A transaction includes:
- expressions of interest
- personal loan application
- loan variation
- delegated authorities ie issuing demand notice
Family means a person who:
- is related by blood or marriage
- stands in a bona fide domestic or household relationship with the employee without discrimination as to sexual preference
- is a child or an adopted child of the employee
- is a child or an adopted child of the person who stands in a bona fide domestic or household relationship with the employee
A business associate means:
A person or organisation having a business association with the staff member, usually through a legal contracts (e.g. someone who has business with a staff member outside work).
Declaration of conflicts of interest:
The declaration of any conflicts of interest and subsequent management of the transaction must be recorded.
- Conflicts Management
ChangeFund have established procedures which are designed to identify and manage conflicts of interests, nationally and internationally. These include a number of organisational and administrative arrangements to safeguard the interests of clients and minimise the potential for conflicts to arise. Examples of ChangeFund’s arrangements for managing conflicts include (but are not limited to):
- Segregation of duties and supervision for persons engaged in different business activities including procedures for ensuring appropriate communication between departments
- System restrictions for Personal account dealings applicable to all staff, and their associates, regardless of position
- Gifts and entertainment policy
- External directorship policy, including the requirement for all external directorships and outside business interests to be declared and approved
- Training to all ChangeFund employees including Directors on conflicts of interest management
- Conflicts Disclosure
Where ChangeFund does not consider that organisational arrangements of conflict management such as those outlined above are sufficient to manage a conflict, ChangeFund may choose to disclose specific conflicts to clients and to ask for their informed consent to continue to act, notwithstanding the existence of any such conflict.
- Evaluation Process
When a potential conflict of interest has been identified, it is evaluated to determine the appropriate assessment of and response to that conflict. This policy is a consequence based policy. This means that conflicts are evaluated on the basis of the consequences that could flow from a conflict.
Under this policy conflicts are rated into three categories as set out below. In order to determine which one of these ratings will apply to a conflict it is necessary to identify:
- the consequences that could follow from that conflict
- the probability of each consequence occurring
- Conflict Ratings
Conflicts are rated into one of three categories:
1 SC being Serious Conflict which is to be avoided. There is an actual, apparent or potential conflict of interest that in the reasonable opinion of the relevant Responsible Manager could (and is likely to) result in:
- an extreme consequence i.e. significant breach of the Corporations Act or legislation in any other jurisdiction, breach notification to FMA or any other regulator, FSP suspension, reputational damage to ChangeFund, termination of employment of the representative involved
- result in a breach of this policy
2 MC being Manageable Conflict. There is actual, apparent or potential conflict of interest that in the reasonable opinion of the relevant Responsible Manager:
- Could, but is unlikely to result in an extreme consequence
- could become a Serious Conflict without being managed
- is not a SC and should be MC having regard to the objectives of the policy and the potential consequences of the conflict
- would result in a minor or technical breach of the policy
3 LC being Low Conflict – no or insignificant conflict of interest exists as assessed by the Responsible Manager and/ or Line Manager
- General Requirement
All financial advice provided by ChangeFund (including reports and ratings publications) should contain or be accompanied by all information that a reasonable person might or should take into account in assessing that financial product advice.
The information should include details of any factors that could influence the client’s decision. The client should be placed in a position where they can objectively assess the value to them of the customer portfolio. Employees should consider the materiality of the impact of any conflict and ensure that any disclosure about conflicts of interest is:
- timely, prominent, specific and meaningful to the client
- occurs before or when the financial advice is provided, but in any case at a time that allows the client a reasonable time to assess its effect
- refers to the specific service to which the conflict relates
There are some situations where disclosing a particular conflict will be inappropriate. There may be situations in which conflicts of interest arise that are confidential, and even amount to inside information. In such situations representatives should discuss the matter with the Responsible Manager and/or ChangeFund’s Credit & Risk Committee.
- Breach of this policy
ChangeFund will regard any breach of this policy as serious and employees will face disciplinary action
Please click here to download our Conflicts of Interest.
Please feel free to contact us on [email protected] for further information.