Board Manager Meeting of 26th of January, 2015 Minutes No. 02

Transcription

1 ENDORSED BY APPROVED BY Rigensis Bank AS Rigensis Bank AS Council Board Manager Meeting of 26th of January, 2015 Minutes No. 02 Nikita Monakhov Minutes No.03 of Board Meeting of 23 rd of January, 2015 POLICY OF PREVENTING CONFLICTS OF INTERESTS WHILE PROVIDING INVESTMENT SERVICES AND ANCILLARY INVESTMENT SERVICES The document has been endorsed by: Business Unit Head First name, surname Date Signature Lawyer of Legal Department Jana Šmerlinga (signature) Head of Risk Department Aleksandrs Grigorjevs (signature) Specialist of Compliance and Methodology Department Irēna Berežkova (signature) Head of Treasury Division Mihails Aniščenko (signature) Head of Financial Instruments Department Maksims Uvarovs (signature) Edition history: Date Approved by Brief description First edition Bank s Council New document New edition Bank s Council Actualized in accordance with amendments in other Bank s normative documents Riga, 2015

2 Contents GENERAL PROVISIONS... 3 SITUATIONS OF CONFLICTS OF INTEREST AND THEIR IDENTIFICATION... 5 MEASURES FOR THE PREVENTION OF CONFLICTS OF INTEREST... 6 CLOSING PROVISIONS

3 GENERAL PROVISIONS 1.1 SCOPE OF THE POLICY This Policy regulates Bank s procedure of monitoring of risk of conflicts of interest occurrence at the Bank during provision of investment services and ancillary investment services to the Customers and measures that are taken to prevent such situations of conflicts of interest The provisions of this Policy only apply to the situations of conflicts of interest that may arise in provision of investment services and ancillary investment services by the Bank to its Customers This Policy is binding upon all the Bank s business units and employees which/who are involved in the process of providing the investment services and ancillary investment services and upon the Associated Persons specified in this Policy This Policy has been developed in accordance with the requirements of the Financial Instrument Market Law of the Republic of Latvia and other legislation of the Republic of Latvia and the European Union PURPOSE OF THE POLICY The aim of this Policy is to determine the key basic principles and elements that may help identify situations and circumstances that might result in situations of conflicts of interest This Policy has been developed with the purpose to prevent situations of conflicts of interest that may threaten the interests of the Customer in receiving investment services and ancillary investment services from the Bank and to minimise the negative consequences of conflicts of interest on the Customers TERMS AND ABBREVIATIONS The following terms used in this Policy shall have the following meaning: Bank Rigensis Bank AS; Financial Instruments (FI) an agreement that simultaneously creates financial assets for one person and financial liabilities or capital securities for another person and that are stipulated in the Financial Instrument Market Law of the Republic of Latvia; Associated Person: - the Manager or Members of the Bank s Board and the Chairperson or Members of the Bank s Council, a tied agent or another person representing the Bank; - the Manager or Members of a tied agent s Board and the Chairperson or Members of the tied agent s Council or another person acting in the name of the tied agent; - an employee of the Bank or its tied agent and any other natural person who is involved in the provision of investment services performed by the Bank and whose activity is controlled by the Bank; - a natural person who is directly involved in the provision of an outsourced service to the Bank or its tied agent in providing investment services; Investment services and ancillary investment services the services referred to in the Financial Instrument Market Law of the Republic of Latvia and that are provided by the Bank; 3

4 Customer a Customer of the Bank who receives investment services and ancillary investment services from the Bank; Personal Transaction a trade transaction in Financial Instruments that has been performed by the Associated Person at the Bank or outside the Bank if it falls at least under one of the following criteria: - the transaction has not been executed within the scope of the job or professional duties of the Associated Person; - the transaction has been executed on the account of the Associated Person; - the transaction has been performed on the account of the Associated Person's spouse, child, stepchild (a child of the spouse that is not their child) or any other relative who has had common household with the Associated Person for at least one year prior to performing the transaction; - the transaction has been performed on the account of another person who is associated with this person in a way that the latter may have direct or indirect interest in the outcome of the transaction other than the fee for the execution of the transaction; Policy this Policy of Preventing Conflicts of Interest in the Provision of Investment Services and Ancillary Investment Services to the Customers; Register a list that consists of the List of Associated Persons, the List of Personal Transactions and the List of Acknowledgments. Acknowledgment an acknowledgment given by member of the Board of Directors or of the Council, confirming that the person is familiar with restrictions in respect of the Personal Transactions The terms not defined herein shall be interpreted in accordance with the definitions provided in the Financial Instrument Market Law of the Republic of Latvia BASIC PRINCIPLES The Bank shall continuously monitor the actions of the employees involved in the process of providing investment services and ancillary investment services in the market of Financial Instruments For the monitoring of the Personal Transactions, the Register is created and maintained A direct link between the remuneration of the employees involved in the provision of investment services and ancillary investment services and the fee paid by the Customer for those services shall be eliminated, as it may reduce the objectivity of the employees and threaten the interests of the Customers if a conflict of interest may arise in relation to the actions taken in the process of providing investment services In determining measures for the prevention of conflicts of interest and developing the relevant procedures, the Bank shall ensure commensurateness between their complexity and the materiality of the threats to the interests of the Customer where a particular conflict of interest situation exists If the organisational or administrative measures established by the Bank for the management of conflicts of interest are not sufficient to ensure, with appropriate certainty, that the risk of harm to the interests of Customers will be prevented, the Bank shall clearly disclose the essence and sources of the conflicts of interest to the Customer prior to commencing the provision of the relevant investment service to the Customer The Bank sets up an organisational structure that enables efficient prevention of situations of conflicts of interest and the capabilities to control the process. 4

5 The Bank sets up individual business units for the provision of investment services and ancillary investment services and ensures the management and internal supervision of the business units. To prevent conflicts of interest, the Bank has structurally separate business units the tasks of which comprise the following: the management of the Financial Instruments owned by the Bank; the acceptance and execution or transferring for execution of the Customers Orders for transactions in Financial Instruments; the management of the individual investment portfolios owned by the Customers and the provision of trust services; the recording of transactions in Financial Instruments and the performance of the settlements for transactions in Financial Instruments The Bank shall continuously monitor the efficiency and updating of Bank's procedures and this Policy and make amendments if such are necessary to better protect the interests of the Customers. SITUATIONS OF CONFLICTS OF INTEREST AND THEIR IDENTIFICATION 2.1. The Bank, in implementing the measures to achieve the aims specified in this Policy, takes into account that a conflict of interest may occur in the following situations: when executing the Customer s orders and simultaneously performing transactions at own expense; when simultaneously executing the orders of two different Customers in transactions in Financial Instruments; when the Bank offers the Customer Financial Instruments for the distribution of which the Bank has entered into a distribution agreement and receives fees for that The Bank understands that a conflict of interest may occur between: the Bank s employee and Customer; the Bank s tied agent and Customer; a person who directly or indirectly controls the Bank and a Customer; different Customers of the Bank; an Associated Person and a Customer The Bank shall pay particular attention to the occurrence of circumstances that may cause a conflict of interest, including cases where: the Associated Person: might earn profit or prevent financial losses on the account of the Customer, is interested in the outcome of the service provided to the Customer or the transaction performed in the name of the Customer, if the outcome does not match the interests of the Customer, is interested in acting in favour of another Customer or a group of Customers, performs the same professional activity that the Customer, receives or will receive remuneration for the services provided to the Customer from another person in the form of cash, goods or services that is not the standard fee for the services; the Customer is offered or the Customer owns: Financial Instruments that the Bank has issued individually, for which the Bank has provided an investment or another type of recommendation or research, Financial Instruments for the distribution and offering of which the Bank has entered into an agreement with third parties, in particular if the Bank receives a fee for that, 5

6 Financial Instruments the issuing or placement of which, including outside the regulated market, the Bank has performed, organised or helped to perform to a third party. MEASURES FOR THE PREVENTION OF CONFLICTS OF INTEREST 3.1. GENERAL PROVISIONS The Bank sets up the internal organisational structure of the Bank that reduces the possibility of the occurrence of situations of conflicts of interest in providing investment services and ancillary investment services. To this end, the Bank shall have separate business units the tasks of which include the following: the management of the Bank s portfolio; the acceptance and execution or transferring for execution of the Customers Orders for transactions in the Financial Instruments; the management of the individual investment portfolios owned by the Customers and the provision of trust services; the recording of transactions in Financial Instruments and the performance of the settlements for transactions in Financial Instruments The Bank intensively monitors the employees whose main job tasks are the provision of investment services and ancillary investment services to the Customers if there is a possibility that they also represent the interests of other persons that might conflict with the interest of the Customers The Bank s employees are obliged to inform the Bank s Board on any established situations of conflict of interest, and the Board shall decide on the prevention of the situations of conflict of interest in accordance with the procedures provided in the internal documents of the Bank The Bank shall be guided by the information provided by the Associated Persons on the performing or refraining from performing of the Personal Transactions as well as on the parameters and volumes of the Personal Transactions RESTRICTIONS AND MONITORING OF PERSONAL TRANSACTIONS The Associated Persons are forbidden: to perform a Personal Transaction on the basis of insider information that is available to the person in connection with performing their job or professional tasks at the Bank; to perform a Personal Transaction using or inappropriately disclosing information that contains a transaction secret; or to perform a Personal Transaction that is in a contradiction with the requirements under the Law; to recommend to a third person performing a transaction in Financial Instruments that, for the person who recommended the transaction, would be qualified as a Personal Transaction, except if the transaction is recommended when performing job or professional tasks; to disclose insider information or express an opinion to a third person if the Associated Person knows or should have known that in the result of disclosing the information the third person will or could perform or recommend to another person a transaction in Financial Instruments that, for the Associated Person who disclosed the information, would be qualified as a Personal Transaction, except if the information is disclosed or the opinion is expressed in performing job or professional tasks; 6

7 to perform Personal Transactions without receiving a previous accept from the Bank The Associated Persons are obliged to comply with the restrictions in respect of the Personal transactions, to receive accept from the Bank prior to performing a Personal Transaction and notify the Bank on the Personal Transactions performed. The Bank maintains the Register and continuously updates the lists of Associated Persons and the Personal Transactions performed by them The Bank is entitled to prohibit the Associated Persons from performing the Personal Transactions if it considers that the interests of Customers might be harmed with them The Bank is entitled to restrict the performance of the Personal Transactions or to only allow the performance of a certain type of Personal Transactions if such restrictions or conditions are necessary to protect the interests of Customers when the Bank provides investment services and ancillary investment services. CLOSING PROVISIONS 4.1. The Bank shall publish information on this Policy on its website and amend it on a regular basis at least once per year. Amendments shall be published on the website and enter into force as of publishing. 7