Conflicts of Interest Management Framework (Part 1) Policy

Transcription

1 Cnflicts f Interest Management Framewrk (Part 1) Plicy This Plicy applies t IOOF Hldings Limited, its subsidiaries and related bdies crprate (as defined in the Crpratins Act 2001) (IOOF) 29 August 2016

2 IOOF Cnflicts f Interest Management Plicy Cntents 1 Overview Intrductin Plicy statement Scpe and applicatin f this plicy The Cnflicts f Interest Management Framewrk 3 2 Key cncepts and definitins 4 3 Rles and respnsibilities Bard respnsibilities Yur rle Specific additinal respnsibilities fr directrs Gvernance Services team rles in management f cnflicts 7 4 IOOF s Legal Obligatins Obligatins as an AFS Licence hlder Duties f cmpany fficers and directrs Obligatins as a listed entity Obligatins as an RSE Licensee Other bligatins t priritise beneficiary interests Cnflicts relating t credit licensees Cnflicts affecting New Zealand schemes and financial services 10 5 Yur specific bligatins under this Plicy Obligatins affecting all persnnel Bard and directrs cnflicts f interest Related party transactins, crprate cnflicts and in-huse prducts Superannuatin Relevant Duties and Relevant Interests Research cnflicts Placement fees 13 6 Cnflict Management Prcess Identify the actual r ptential cnflict Reprt t Grup Cmpliance r the Cmpany Secretary Assess the cnflict Recrd the cnflict Treating, managing and mnitring cnflicts 14 7 Plicy Gvernance Training Review and apprval Further infrmatin 15 8 Dcument release infrmatin 16 2

3 IOOF Cnflicts f Interest Management Plicy 1 Overview 1.1 Intrductin The IOOF Cnflicts f Interest Management Framewrk is set ut in tw parts: Part 1: IOOF Cnflicts f Interest Management Plicy (the Plicy); and Part 2: IOOF Cnflicts f Interest Management Prcedures and Guidelines (the Prcedures). The Plicy sets ut the IOOF Grup apprach and rules in relatin t the identificatin and management f cnflicts f interest; the Prcedures set ut the prcesses we have implemented and the guidelines we fllw in rder t adhere t the Plicy requirements. This Plicy sets ut the Bard s expectatins f the type f cnduct and behaviur that is acceptable when cnflicts r ptential cnflicts are present. The Prcedures shuld be read in cnjunctin with the Plicy. 1.2 Plicy statement The requirement t prperly identify and manage cnflicts stems frm a cmbinatin f statutry and cmmn law requirements, prudential standards, regulatry guides, industry best practice and IOOF s Cde f Cnduct. IOOF delivers a high level f quality service t ur clients and rigrusly supprts ethical behaviur. As a cnditin f emplyment, emplyees are expected t cnduct their activities and respnsibilities with integrity and fair dealing. The IOOF Cde f Cnduct als cntains this requirement and is attested t n appintment and again annually by all staff. The Cde f Cnduct als emphasises IOOF s values (which include integrity) and are incrprated int the recruitment and perfrmance review prcess fr all staff. Cnflicts can ptentially interfere with the integrity f decisin making. If decisins r services are tainted by cnflicts, this culd damage IOOF s reputatin with clients, investrs, superannuatin members, stakehlders, regulatrs and the brader cmmunity by diminishing their cnfidence in ur ability t treat them fairly and hnestly. Fr these reasns, the Bard is cmmitted t ensuring that all directrs and persnnel cmply with this Plicy and that actual r ptential cnflicts f interest and/r duty are identified, recrded, assessed, managed and mnitred in accrdance with this Plicy and the Prcedures. When a cnflict cannt reasnably be managed it must be avided. 1.3 Scpe and applicatin f this plicy IOOF is referred t in this Plicy as IOOF, us, ur r we. All staff, directrs, agents, cntractrs, Representatives, actuaries and relevant auditrs - and fficers f IOOF are required t cmply with the Plicy (referred t in the Plicy as yu r yur ). IOOF refers t IOOF Hldings Limited and its whlly-wned subsidiaries including its Australian Financial Services (AFS) Licensees, Registrable Superannuatin Entity (RSE) Licensees and its registered Life Cmpany and Life Nn-Operating Hlding Cmpany (NOHC). In the event f any incnsistency between the Plicy and statutry r regulatry requirements, the latter prevails. The Plicy cnsiders cnflict management requirements applicable in Australia and t the extent applicable, t IOOF s New Zealand financial services and prducts. 1.4 The Cnflicts f Interest Management Framewrk The IOOF grup has a Cnflicts f Interest Management Framewrk (the Framewrk) in place t ensure we meet ur clients, investrs and members expectatins that we will deal with them fairly and put their interests ahead f ur wn. 3

4 IOOF Cnflicts f Interest Management Plicy The Framewrk is the ttality f systems, structures, plicies, prcesses and cntrls within IOOF s business peratins that identify, assess, mitigate, manage and mnitr cnflicts f interest. The Framewrk frms part f the brader Cmpliance Framewrk and is designed t prvide reasnable assurance that all cnflicts are being clearly identified, avided r prudently managed. The Framewrk is illustrated belw: 2 Key cncepts and definitins Alternative Remuneratin as referred t in this Plicy cvers nn-mnetary r sft dllar benefits prvided t r received by an AFS licensee, an authrised representative r ther representative that prvides advice t retail clients. APRA Regulated Entities as referred t in this Plicy cvers ur registered Life Cmpany (IOOF Ltd) and Nn- Operating Hlding Cmpany (IOOF Grup Ltd) and ur Registrable Superannuatin Entity (RSE) Licensees (IOOF Investment Management Limited and Australian Executr Trustees Limited). Beneficiaries are ur clients, t whm we we a duty t act in their best interests in the event f a cnflict f interest including: Investrs in a managed investment scheme r IDPS and IDPS-like prduct. 4

5 IOOF Cnflicts f Interest Management Plicy Persns with a beneficial interest in a superannuatin fund (which culd ptentially include current members, pensiners, reversinary beneficiaries, spuses r ex-spuses where there is a spuse accunt r family split, and ptential beneficiaries f a death r insurance benefit under the fund rules). Owners r prspective wners f Friendly Sciety benefit fund plicies. Clients f financial advice prviders (where the ptential cnflict relates t advice prvided). Beneficiaries f trusts where we prvide trustee r custdial services. Cnflict fr the purpse f this Plicy, means a Cnflict f Interest and/r a Cnflict f Duty. In a superannuatin cntext, a Cnflict exists where there is a cnflict: a) between the duties wed by an RSE licensee, r a respnsible persn f an RSE licensee, t Beneficiaries and the duties wed by them t any ther persn; b) between the interests f Beneficiaries and the duties wed by an RSE licensee, r a Respnsible Persn f the RSE licensee, t any ther persn; and c) between an interest f an RSE licensee, an assciate f an RSE licensee r a Respnsible Persn r an emplyee f an RSE licensee, and the RSE licensee s duties t Beneficiaries; and (d) between an interest f an RSE licensee, an assciate f an RSE licensee r a Respnsible Persn r an emplyee f an RSE licensee and the interests f Beneficiaries. 1 A Cnflict f Duty arises when a persn has cmpeting lyalties and a duty t ne entity may cnflict with r reduce their ability t perfrm their duty t anther entity. A Cnflict f Interest exists whenever a persn r cmpany has cmpeting persnal, financial, prfessinal r wnership interests that culd undermine their impartiality and ptentially influence their decisin making. The Cnflict Owner is the persn that Grup Cmpliance has determined will be respnsible fr implementing the treatment plan, ensuring that the identified Cnflict des nt materialise and impact n ur business, and prviding peridic attestatins t Grup Cmpliance in relatin t the nging treatment f the Cnflict. Cntrl Owners are IOOF staff that have been assigned respnsibilities fr prviding attestatins thrugh OneSum, IOOF s risk management and cmpliance tl. Inside Infrmatin is infrmatin which is nt generally available and if it had been annunced t the market, a reasnable persn wuld expect it t have a material effect n a listed share price. When we prvide research infrmatin n a security (excluding a managed investment scheme) we must disclse n ur website any material interest that IOOF and assciates (as defined in Div 2 f Pt 1.2 f the Crpratins Act 2001) have in the particular security. Material Interest is defined as a hlding f 5% r mre f the rdinary shares. In respect f directrs, a Material Persnal Interest is where there is a relatinship r interest held by the directr that is f real substance t a matter r arrangement being cnsidered, has the capacity t influence the directr and is f cnsiderable imprtance, size r wrth. A Related Party, as defined in s228 f the Crpratins Act 2001 and RG76, can be: An entity that cntrls a public cmpany. Persns wh are related parties f a public cmpany including: (i) (ii) (iii) (iv) Directrs f the public cmpany. Directrs f an entity that cntrls the public cmpany. Spuses and de fact spuses f the persns in (i) and (ii). The parents and children f the persns abve in (i), (ii), (iii). An entity cntrlled by a related party unless it is als cntrlled by the public cmpany. An entity can als be a related party f a public cmpany if it: was a Related Party f the cmpany at any time within the previus 6 mnths; r believes r has reasnable grunds t believe that it is likely t becme a Related Party f the cmpany at any time in the future; r acts in cncert with a Related 1 APRA Prudential Standard SPS

6 IOOF Cnflicts f Interest Management Plicy Party f the public cmpany n the understanding that the Related Party will receive a financial benefit if the public cmpany gives the entity a financial benefit. A trust r managed investment scheme fr which any IOOF entity acts in a Trustee r Respnsible Entity capacity and any entity cntrlled by this trust r scheme. A Related Party Transactin is any transactin entered in t by IOOF r a managed investment scheme where a financial benefit is prvided t a Related Party f IOOF. Related Party transactins ften invlve a Cnflict eg where the Related Party is in a psitin f influence ver a decisin r the terms n which a service r prduct is prvided. A Relevant Duty is any duty wed by an RSE Licensee r Respnsible Persn t Beneficiaries r any ther persn that the RSE Licensee cnsiders relevant because it might reasnably have the ptential t significantly impact n the RSE Licensee acting in the members best interests. A Relevant Interest is an interest f the RSE, an assciate f the RSE Licensee r a Respnsible Persn that the RSE Licensee cnsiders relevant because it might reasnably have the ptential t significantly impact n the RSE Licensee acting in the members best interests. Representatives are all emplyee representatives, authrised representatives, financial advisers and financial planners authrised t prvide financial advice, issue r arrange financial prducts. Representatives that are nt emplyees f IOOF are required t adhere t the cnflicts f interest and nn-mnetary (sft dllar) benefit requirements set ut in the applicable Representatives Manuals which frm part f the IOOF Cnflicts f Interest Management Framewrk. A Respnsible Persn is persnnel cnsidered by an APRA Regulated Entity t be a Respnsible Persn under APRA Prudential Standard CPS 520 r SPS 520 as dcumented in the Respnsible Persns Plicy. 3 Rles and respnsibilities 3.1 Bard respnsibilities The Bards f each f the cmpanies within the IOOF Grup are respnsible fr ensuring a strng culture exists arund identifying, disclsing and managing cnflicts f interest. They are respnsible fr ensuring that directrs and persnnel at all levels put the interests f clients, investrs, members and sharehlders ahead f their wn interests and at all times treat them fairly. The directrs f each cmpany cvered by this Plicy are respnsible fr the develpment and maintenance f the cnflicts framewrk within that cmpany. In additin, the directrs f each RSE Licensee must als review and apprve any updates t the Cnflicts f Interest Management Framewrk including this Plicy and must be able t demnstrate that: it remains apprpriate fr the size, business mix and cmplexity f the business; all ptential r actual cnflicts are identified; and all reasnably practicable actins are taken t avid, r prudently manage cnflicts. 2 The IOOF Bards are respnsible fr setting the tne at the tp by demnstrating cmpliance with this Plicy and fr embedding their expectatins arund cmpliance with the Plicy thrughut the IOOF Grup. The Bards must take reasnable steps t ensure that all persnnel understand the Plicy and Prcedures, the need t identify ptential cnflicts and the circumstances that might give rise t a ptential cnflict. 3 This is dne in practice by disseminatin f the Plicy t all staff, annual training and reprting by Grup Cmpliance t the Risk and Cmpliance Cmmittee and Bards. The Bards are respnsible fr peridically mnitring the cmpliance perfrmance f the business. This includes the prcesses in place t identify, reprt and manage cnflicts f interest and cnflicts f duties. 2 APRA Prudential Standard SPS APRA Prudential Standard SPS

7 IOOF Cnflicts f Interest Management Plicy 3.2 Yur rle Yu are required t identify and manage cnflicts f interest and cnflicts f duties in accrdance with this Plicy. This includes: Reprting ptential and actual cnflicts in the manner described in the Prcedures. Nt putting yurself in a psitin where yur persnal interests wuld result in a breach f this plicy r ur Cde f Cnduct. Wrking with Grup Cmpliance t develp treatment plans fr any identified cnflicts. Prviding peridic updates t Grup Cmpliance n adherence t any treatment plans fr managing identified cnflicts. 3.3 Specific additinal respnsibilities fr directrs Directrs have a duty t avid cnflicts f interest and shuld avid entering int transactins r vting n any matter where they have a Material Persnal Interest r are cnflicted. They must nt place themselves in a psitin where there is an actual, perceived r substantial pssibility f a cnflict between a persnal interest and a duty wed t beneficiaries r the IOOF Grup. It is recgnised that situatins may ccur that give rise t a Material Persnal Interest r a Cnflict f Interest r duties. Each directr is respnsible fr ensuring that any actual r perceived cnflicts f interest r duty r a Material Persnal Interest that he/she is unable t avid, r that may impact his/her ability t perfrm their fiduciary and statutry duties, are disclsed t the Bard s that apprpriate actin may be taken t address the cnflict. It is each directr s respnsibility t ensure that any perceived r actual Cnflict r Material Persnal Interest that is disclsed by their fellw directrs, is fully and cmpletely discussed s that they may make infrmed decisins abut hw it shuld be handled. A directr wh has a Material Persnal Interest in a matter must als abstain frm vting n the matter r attending any meetings whilst the matter is being cnsidered, unless apprval has been granted in line with regulatins in this regard. Cnflicts declared in IOOF Bard and Bard Cmmittee meetings must be dcumented in the minutes alng with the treatment plans and managed in accrdance with sectin 5.2 f this Plicy and the Prcedures. 3.4 Gvernance Services team rles in management f cnflicts The cnflicts management respnsibilities f teams within Gvernance Services are set ut belw: Grup Cmpliance: Ensuring effective management f cnflicts f interest by creating, implementing, maintaining and mnitring the Cnflicts f Interest Management Framewrk as required in this Plicy and the Prcedures. Dcumenting and assessing reprted cnflicts in cnsultatin with the Cnflict Owner. Dcumenting and assessing the adequacy f treatment plans. Cnducting an annual review and update f this Plicy. Mnitring cmpliance with this Plicy thrugh psitive assurance and ther methds as determined when the cnflicts are dcumented and assessed. Mnitring the implementatin f cnflict treatment plans and where cnsidered necessary, escalating r seeking alternative treatment plans. Prviding regular updates t the Risk and Cmpliance Cmmittee n cnflict management including reprting new cnflicts, the status f treatment plans, including delays in implementatin f treatment plans, and peridically prviding cpies f registers. Where cnsidered apprpriate, updates n cnflicts management shuld als be prvided t the Bard. 7

8 IOOF Cnflicts f Interest Management Plicy Implementing steps t return t, and imprve nging cmpliance f any nn-cmpliance identified thrugh either internal mnitring (including via OneSum) r thrugh issues reprted in RiskVisin. Cmpany Secretary: Legal: Ensuring Bard submissin templates require the highlighting f ptential cnflicts, and in which capacity the Bard is acting when cnsidering matters that present ptential cnflicts. Ensuring agenda items make it clear in which capacity the Bard must act when cnsidering the matters and ensuring apprpriate fcus n matters cnsidered in similar capacities. Ensuring in meetings f entities where there are multiple Beneficiaries and rles (fr example where the entity is ne r mre f an RSE Trustee, Respnsible Entity, Investment Manager, ASX market participant, Advice business, Investment Manager r custdian) a declaratin by the Chairman t demnstrate hw beneficiary interests were at the frefrnt f decisins made when matters presenting a ptential cnflict f interest were tabled. Ensuring there are prcedures in place t assist the Bard in defining when directrs shuld abstain frm vting and if a directr abstains, hw Bard effectiveness is prtected. Preparing Bard minutes including cnfirmatin f cnflicts declared, hw they were managed and fr each decisin nted in the minutes, in which capacity the decisin was made. Reprting t Grup Cmpliance any nn-cmmercially sensitive cnflicts and treatment plans after the minutes have been cmpleted and reviewed. Maintaining a register f cnfidential Cnflict disclsures relating t cmmercially sensitive matters. Prviding directrs with access t independent advice if requested t help ensure that they have declared and apprpriately managed r avided all relevant cnflicts f interest. Reviewing any Related Party cntracts befre they are executed t ensure they are n armslength cmmercial terms, and if any ptential cnflicts f interest are identified, reprting the arrangement and treatment plan t Grup Cmpliance. Maintaining the Related Party cntracts register. Prviding legal advice n the nature and extent f duties wed by entities within the IOOF grup (as required). Enterprise Risk and Chief Risk Officer APRA Regulated Entities: Facilitating business unit risk assessments, which includes the assessment f material risks and the risk management strategies in accrdance with the Grup Risk Management Plicy, reprting t the Bards RCC. Gvernance is defined as a material risk within the Grup Risk Management Plicy, and the risk and management f cnflicts f interest is included in the risk assessments, as applicable. Cmpliance and Prfessinal Standards (CAPS): Supervisin and mnitring f Representatives that are nt IOOF emplyees as set ut in the Prcedures and the applicable Representatives Manuals. 4 IOOF s Legal Obligatins IOOF is cmmitted t ensuring its persnnel and Representatives cmply with their legal bligatins in the prvisin f financial services t its clients, investrs and superannuatin members. This includes the fllwing legislatin that is relevant t the identificatin and management f cnflicts f interest. 8

9 IOOF Cnflicts f Interest Management Plicy 4.1 Obligatins as an AFS Licence hlder AFS Licensees must have adequate arrangements in place t manage cnflicts f interest that may arise in relatin t the activities undertaken by the AFS Licensee r its representatives when prviding financial services, and t prvide the financial services efficiently, hnestly and fairly under s912a f the Crpratins Act The fllwing ASIC Regulatry Guides als prvide further Cnflict f Interest management bligatins: RG 181: Licensing: Managing cnflicts f interest. RG 246: Cnflicted remuneratin prvide further guidance fr Licensees. RG 79: Research reprt prviders: Imprving the quality f investment research. RG 76: Related Party transactins. This des nt mean that an AFS Licensee can never prvide financial services where a Cnflict may exist, hwever the AFS Licensee must effectively manage all cnflicts. 4.2 Duties f cmpany fficers and directrs The duty t avid a Cnflict f Interest is als part f the fiduciary bligatins f the cmpany s fficers and directrs t: Exercise care, skill and diligence. Act in gd faith and fr a prper purpse. Disclse and prperly treat any Material Persnal Interest in matters being cnsidered. Priritise APRA Regulated Entity Beneficiaries interests ver ther interests if there are cnflicts. Nt gain an imprper advantage fr itself r smene else. The Crpratins Act 2001 cdifies the fiduciary duties in s and includes the requirement: Nt t have a Material Persnal Interest in a subject matter requiring their judgement. T discharge their duties in gd faith and in the best interests f the cmpany and fr prper purpse Nt t imprperly use their psitin, r infrmatin acquired because f their psitin, t gain an advantage fr themselves r smene else r cause detriment t the crpratin. T act in the best interest f the cmpany. 4.3 Obligatins as a listed entity IOOF is an Australian Securities Exchange (ASX) listed entity and is required under ASX Listing Rule t cmply with the ASX Crprate Gvernance Cuncil s Crprate Gvernance Principles and Recmmendatins. One f these is t act ethically and respnsibly and t prmte a culture that prmtes ethical and respnsible behaviur thrugh its Cde f Cnduct and Plicies. This Plicy aims t prmte such a culture. 4.4 Obligatins as an RSE Licensee RSE Licensees have additinal Cnflict f Interest management bligatins under s52(2)(d) f the Superannuatin Industry (Supervisin) Act 1993 and APRA Prudential Standard - SPS 521: Cnflicts f Interest (SPS 521). The RSE licensees are required under SPS 521 t develp, implement and review a cnflicts management plicy that is apprved by the Bard, identify all Relevant Duties and Relevant Interests, and develp registers f relevant duties and relevant interests. Interests f persns with a beneficial interest in a superannuatin fund must be priritised ver the interests f any ther persn r the trustee in the event f a Cnflict under s52(2)(d)(i) f the 9

10 IOOF Cnflicts f Interest Management Plicy Superannuatin Industry (Supervisin) Act (This culd ptentially include current members, pensiners, reversinary beneficiaries, spuses r ex-spuses where there is a spuse accunt r family law split, and ptential beneficiaries f a death r insurance benefit under the fund rules). 4.5 Other bligatins t priritise beneficiary interests A Respnsible Entity f a managed investment scheme is required under s601fc(1)(c) f the Crpratins Act 2001 t priritise member interests ver the interests f the Respnsible Entity. A Friendly Sciety must priritise the interests f wners r prspective wners f Friendly Sciety benefit fund plicies in the event f a Cnflict f Interest accrding t s32(1)(b) f the Life Insurance Act Advisers must act in the best interests f clients accrding t s961b(1) f the Crpratins Act Cnflicts relating t credit licensees Australian Credit Licensees (ACLs) must cmply with their cnflicts f interest management bligatins under the Natinal Cnsumer Credit Prtectin Act 2009 and ASIC Regulatry Guide 205 t have adequate arrangements in place t ensure that clients are nt disadvantaged by any cnflict f interest that may arise whlly r partly in relatin t credit activities engaged in by the ACL, its persnnel and representatives. 4.7 Cnflicts affecting New Zealand schemes and financial services Where financial services are prvided and schemes are ffered by a New Zealand cmpany, guidance prvided by the New Zealand Financial Markets Authrity must be fllwed, including bligatins t: Carefully cnsider rles, respnsibilities, lcatins, and reprting lines f different managed scheme functins t ensure they are designed t enable rbust checks and balances, and t minimise the risk f cllusin r cnflicts f interest. Carefully cnsider ptential cnflicts f interest and prvide clear guidelines n hw they will be addressed fr a managed scheme. Clearly identify, manage and disclse actual and ptential cnflicts f a financial services prvider, particularly hw staff are paid r incentivised. Explain why a financial services prvider believes its apprach is aligned t custmer interests. This includes what services and prducts are recmmended t custmers, and hw any perfrmance benefits (such as returns) are shared with the custmer. Clearly explain any arrangement that a financial services prvider has with assciated parties. In additin t these bligatins, there is an bligatin under IOOF New Zealand Ltd s cmpany cnstitutin that when dealing with cnflicts f interest between anther IOOF Grup cmpany and IOOF New Zealand Ltd, the interests f IOOF New Zealand Ltd must be priritised ver the interests f the IOOF Grup. 5 Yur specific bligatins under this Plicy 5.1 Obligatins affecting all persnnel Cmpliance with the Cnflicts Framewrk Yu must cmply with IOOF s Cde f Cnduct and the Cnflicts f Interest Management Framewrk including the Plicy and the Prcedures. Failure t reprt and treat cnflicts in accrdance with the Plicy and Prcedures may result in disciplinary actin, including remval frm an Executive, Respnsible Persn, Respnsible Manager r Respnsible Executive psitin. 10

11 IOOF Cnflicts f Interest Management Plicy If yu are uncertain as t whether a Cnflict f Interest shuld be disclsed in accrdance with this Plicy, yu shuld cnsult with Grup Cmpliance, r fr directrs, the Grup General Cunsel r Cmpany Secretary. T treat ptential remuneratin cnflicts and prmte cmpliance with this Plicy and ther IOOF plicies, frm 1 July 2016 IOOF s Perfrmance Management System will include a gvernance gate s that there is a direct cnsideratin f gvernance behaviurs in staff perfrmance management. Gifts, entertainment and alternative remuneratin During the nrmal curse f business, gifts f a nminal value are smetimes exchanged with external parties. Gifts in the frm f cash, lans, securities r their equivalent are nt t be ffered r accepted. It is als prhibited t ffer r accept gifts r entertainment frm gvernment fficials r regulatry bdies, ther than wrking lunches in the rdinary curse f business. If a third party s primary purpse is t btain business frm us r influence decisin-making thrugh the ffer f gifts r entertainment, such ffers are t be declined. Gd judgement is t be exercised in all circumstances. It is equally imprtant that yu d nt use the ffer f gifts r entertainment t try t influence the decisin f anther party. Yu must reprt all gifts, entertainment r ther alternative frms f remuneratin related t yur emplyment at IOOF and wrth mre than $300 t Grup Cmpliance in accrdance with the Prcedures. AFS Licensees that prvide financial prduct advice t retail clients, and prduct issuers that prvide nn-mnetary benefits t them, must als maintain recrds f nn-mnetary benefits ver $100 in accrdance with the Prcedures. Where pssible disclsure shuld happen befre acceptance f the ffer. Prhibitin n brrwing and lending by persnnel Yu must nt brrw frm r lend t clients r suppliers, except where this is their usual curse f their business (fr example, where yur client is a bank). Even then, the brrwing r lending must nly be n terms ffered t thers in similar circumstances when it cmes t interest rates, terms, security, repayment, and the like. Other cnflicts f interest that culd invlve persnnel and/ r IOOF cmpanies Yu must nt use yur psitin r use infrmatin btained thrugh yur psitin t gain an advantage fr yurself r smene else including an IOOF cmpany. 4 This prhibitin includes the fllwing types f ptential cnflicts: Inside infrmatin Situatins where yu cme acrss inside infrmatin n ther cmpanies r funds that culd be used fr yur persnal gain r the benefit f IOOF. 5 Client cnflict Situatins where yu r IOOF receive a persnal gain at the expense f ur clients, investrs r superannuatin members. Outside influence Situatins where yu r IOOF have an external relatinship and yu, IOOF r external party receive a persnal gain. This als includes situatins where external parties use their influence ver yu r IOOF fr their wn gain. Remuneratin cnflicts Remuneratin cnflicts may arise where yu are ffered an incentive t achieve an utcme that may be, r reward behaviurs that are, in cnflict with the best interests f clients, investrs and superannuatin members. (Fr example, setting a $1millin target fr IPO revenue fr the direct equities team). Executive and directr remuneratin must be reviewed by a remuneratin cmmittee and is subject t the requirements f remuneratin and gvernance plicies. Under the IOOF Grup Plicy - Persnal Trading in IOOF Hldings Limited Securities, staff must nt 4 ss 182, 183 Crpratins Act 2001 (Cth). 5 Cmmunicatin f inside infrmatin is prhibited, s 1043A Crpratins Act 2001 (Cth). 11

12 IOOF Cnflicts f Interest Management Plicy enter int a hedging transactin (including using derivatives) t remve the at risk aspect f any IFL securities granted t them as part f their remuneratin package. Persnal relatinships Situatins where yu may be directly related t r in a relatinship with anther emplyee that is a direct reprt r a line manager may give rise t a cnflict f interest when cnsidering perfrmance assessments and remuneratin decisins. The manager/subrdinate dynamics may als impact n the carrying ut f their duties t IOOF. Such relatinships must be reprted t the Human Resurces department wh will cnsider the apprpriate actin t take, which may include reprting the situatin t Grup Cmpliance. 5.2 Bard and directrs cnflicts f interest If yu are a directr, yu must disclse t all ther directrs at each Bard r cmmittee meeting: Any Material Persnal Interest yu have in a matter which relates t the affairs f the cmpany. Any ther interest which yu believe shuld be disclsed in rder t avid an actual Cnflict f Interest r the perceptin f a Cnflict f Interest. Yu shuld make this disclsure as sn as practicable after yu becme aware f the interest r the need t make a disclsure and the Prcedures must be fllwed t manage the Cnflict. If multiple directrs are cnflicted in relatin t a particular matter, the Chair must cnsider implementing ther steps t ensure that either the Bard is able t effectively cnsider the matter in the absence f the cnflicted directrs r the cnflict is t be avided entirely. If yu are a directr f multiple cmpanies acrss IOOF, this may give rise t ptential cnflicts that culd impact n the crprate decisin making prcess. In all cases, yu shuld refer t the Prcedures we have put in place t ensure that yur duties can be met despite the ptential cnflicts and that the interests f Beneficiaries are nt adversely impacted. Directrs must als cnsider all cnflicts highlighted in Bard submissins and ensure that cnflicts are either avided r apprpriately treated, as cnsidered apprpriate. 5.3 Related Party transactins, crprate cnflicts and in-huse prducts The Crpratins Act 2001 prvides that public cmpanies must nt give a financial benefit t a Related Party withut the apprval f the members f the cmpany unless the giving f that benefit falls int ne f the exceptins in the legislatin including that it is perfrmed at arm s length and n cmmercial terms. This rule als applies t a Respnsible Entity f a managed investment scheme. ASX Listing Rule 10.1 als gverns Related Party transactins stating that apprval is required frm security hlders fr certain transactins. Therefre all prpsed cmmercial transactins between related bdies crprate must first be apprved by ne r mre members f the Leadership Grup, wh must cnsider whether the terms are at arm s length and cmmercial. Grup General Cunsel and/r internal/external legal advisers must be cnsulted t ensure the arrangement is legal and that the transactin is perfrmed at arm s length and n cmmercial terms. All Related Party transactins must be apprved by the Bard after Legal sign ff has been btained. Appintment f related service prviders Even when a transactin r utsurced arrangement is cmpleted n an arm s length basis with a Related Party, cnflicts f interest may arise frm thse arrangements that need t be identified, dcumented and addressed t ensure that pririty is given t the duties and interests f the Beneficiaries; that duties are met despite the Cnflict and that Beneficiaries are nt adversely impacted by the Cnflict. In all cases, yu shuld refer t the Prcedures t ensure that there are apprpriate treatment plans t manage cnflicts arising frm Related Party transactins. In additin, the Vendr Management and Outsurcing Plicy sets ut the minimum standards which must be fllwed when acquiring services frm related parties, including the cnsideratin f ptential r actual cnflicts as part f the due diligence and nging mnitring prcesses. 12

13 IOOF Cnflicts f Interest Management Plicy Investment in IOOF prducts Care must be taken when determining and mnitring whether IOOF prducts shuld select ther IOOF inhuse prducts t invest in. This includes fund f fund multimanager arrangements, ptins n platfrms including when a default cash ptin is chsen, and underlying friendly sciety benefit funds. T manage this type f Cnflict, the parties must deal with each ther at arm s length frm a pricing perspective, the in-huse investr shuld be treated n mre favurably than an external investr, apprpriate infrmatin barriers must be in place and the investments must be subject t the same scrutiny as an external ptin. Requirements fr managing these types f cnflicts are set ut in the Prcedures and as part f the applicable investment gvernance framewrk, and may include the use f external experts t assist with independently assessing internal investments, cnsideratin f the apprpriateness f any perfrmance fees and whether they shuld be frgne if the perfrmance is nt delivered. Purchase r sale f securities Client requests t participate in ffers f securities made available thrugh an IOOF wned platfrm must be priritised ver any allcatin f securities that IOOF wishes t participate in as a principal. 5.4 Superannuatin relevant duties and relevant interests RSE Licensees are required t prepare and publish registers f relevant duties and relevant interests n their website as part f their cnflicts management framewrks. If yu are a Respnsible Persn f an IOOF RSE yu must supply Grup Cmpliance with infrmatin n new, r changes t, yur relevant interests and relevant duties as they arise. In the Prcedures we prvide examples f interests that the RSE Licensee is likely t cnsider relevant. 5.5 Research cnflicts Cnflicts f interest must never cmprmise the integrity f the advice given in IOOF s research reprts and at all times IOOF s Research teams must act efficiently, hnestly and fairly when preparing and issuing research reprts. IOOF management must ensure that the business units are structured t minimise and manage cnflicts. They must have adequate cntrls in place t manage cnflicts including aviding thse that cannt be managed and prvide meaningful disclsures t help users f research reprts understand cnflicts and hw they are managed. At all times, research Reprts issued by IOOF must have enugh infrmatin t allw users t frm a realistic view abut the ptential impact f any cnflicts f interest n the quality and bjectivity f the research service. The Prcedures that we have develped must be fllwed t ensure ur research is independent, unbiased and is nt cmprmised by any dealings f any ther part f the cmpany. 5.6 Placement fees Our AFS Licensees may take a placement r similar fee in the curse f an IPO where an IOOF Research team has published a research reprt n the security the subject f that IPO. Hwever, in this situatin, IOOF shuld: Publish the research reprt after the prspectus has been ldged with ASIC. Ensure that this Plicy and the Prcedures are fllwed in preparing the research reprt. Include a statement in its research reprt which satisfies the disclsure exceptin in s 734 f the Crpratins Act Include a further statement in its research reprt disclsing that it will receive a placement fee r ther benefit in cnnectin with the IPO. 13

14 IOOF Cnflicts f Interest Management Plicy 6 Cnflict Management Prcess This sectin prvides an verview f the prcess that must be fllwed t deal with identified cnflicts. Further detail is prvided in the Prcedures. Identify Reprt Assess Recrd Treat, Manage & Mnitr 6.1 Identify the actual r ptential Cnflict If yu identify an actual, apparent r ptential Cnflict f Interest yu shuld discuss this with yur manager in the first instance. Grup Cmpliance will als prvide yu with guidance and cnfirm whether a cnflict exists. 6.2 Reprt t Grup Cmpliance r the Cmpany Secretary Once an actual, apparent r ptential Cnflict f Interest has been identified, it must be reprted t Grup Cmpliance. Cmmercially sensitive matters identified in Bard meetings must be reprted t and dcumented in a cnfidential register maintained by the Cmpany Secretary. 6.3 Assess the Cnflict Grup Cmpliance must meet with the Cnflict Owner, cmplete an assessment and determine the curse f actin t be taken including whether any further treatment f the Cnflict is required. 6.4 Recrd the Cnflict Gvernance Services maintain a number f registers and will determine in which register r registers the Cnflict must be recrded in as set ut in the Prcedures. The registers include: Cnflicts Register Sensitive Cnflicts Register Gifts, Entertainment and Alternative Remuneratin (Sft Dllar) Register RSE Licensee Registers f Duties and Interests Related Party Cntracts Register Research Interests Trading Registers 6.5 Treating, managing and mnitring Cnflicts Yu must cnsult with Grup Cmpliance arund hw best t manage, treat and mnitr the Cnflict. Each Cnflict f Interest needs t be separately cnsidered and treated based n the circumstances. The treatment plans that Grup Cmpliance will wrk with yu t implement will fall int ne f the categries set ut belw: Further infrmatin n when each type f treatment plan wuld be cnsidered t be an apprpriate respnse is set ut in the Prcedures. Optins are: Aviding the cnflict. Cntrlling the cnflict. Disclsing the cnflict. Mnitring the cnflict. Further infrmatin n when each type f treatment plan wuld be cnsidered t be an apprpriate respnse is set ut in the Prcedures. 14

15 IOOF Cnflicts f Interest Management Plicy 7 Plicy Gvernance 7.1 Training Training n this Plicy and the related Prcedures must be prvided t ensure everyne cvered by this Plicy has a sund awareness f the Plicy and understanding f the prcess fr identifying, managing and reprting cnflicts f interest and the assciated registers that must be maintained. This training must include: Cmpulsry, assessed inductin and nging training t all staff via an e-learning mdule. Publicatin f this plicy n the HQ intranet site by Gvernance Services s it is available fr all staff t access. Prvisin f this Plicy and the Prcedures t all new Respnsible Persns, Respnsible Managers and Respnsible Executives by Cmpliance n appintment alng with a briefing t enable them t prvide a declaratin f interests and their declaratin f cmpliance with this plicy n appintment and quarterly. Additinal targeted training, wrkshps r reminders fr staff and/r directrs as cnsidered apprpriate. Reminders shuld be sent t all staff quarterly arund the timing f significant events where guest invitatins are cmmn, such as the Melburne Cup. At least annually, staff reminders shuld include a prmpt t cnfirm that staff have read and understd the Plicy and disclsed all knwn cnflicts as required under the Plicy. When the Plicy is updated, an annuncement must be made via a HQ news stry r business-wide Review and apprval This Plicy (and each material change t the Plicy) must be apprved by the IOOF Hldings Ltd Bard, each f the RSE Licensee and AFS Licensee Bards including IOOF Ltd, and the IOOF Grup Ltd Bard (except where nn-material changes are made). Nn-material changes must be apprved by the Managing Directr. Grup Cmpliance is required t review the Plicy and the Prcedures n an annual basis and any amendments shall be reprted t the IOOF Risk and Cmpliance Cmmittee. The RSE Licensees must ensure that a cmprehensive independent review f the Cnflicts f Interest Management Framewrk is cnducted at least nce every three years by an apprpriately trained and cmpetent persn, and that the results f this review are reprted t the RSE Licensee Bards. This review must be added t the Bards annual calendars f events and will be cnducted by the appinted internal auditr wh must present their internal audit reprt t the Risk and Cmpliance Cmmittee and applicable Bards. 7.3 Further infrmatin Fr further infrmatin n this plicy please cntact any member f Grup Cmpliance r the Cmpany Secretary. 15

16 IOOF Cnflicts f Interest Management Plicy 8 Dcument release infrmatin 8.1 File details File Name Descriptin Previus Authr(s) Dcument1 Defines and describes cnflicts f interest, the principles regarding cnflicts f interest, hw they are managed, mnitring and reprting f cnflicts f interest. Thmas Rbertsn Creatin Date December 2004 Current Revisin Authr(s) Andrea Tanner, Cmpliance Manager 8.2 Revisin histry Versin Revisin Date Authr(s) Revisin Ntes 5.0 August 2010 Thmas Rbertsn Revisin fllwing IOOF-AWM merger 6.0 January 2013 Andrea Tanner Revisin t incrprate APRA Prudential Standards 7.0 August 2013 Andrea Tanner Revisin t incrprate APRA Feedback 7.1 February 2013 Thmas Rbertsn Replace Attachment G 8.0 Octber 2014 Andrea Tanner Update t incrprate business changes including update t Relevant Interest definitin and Attachment G 8.1 May 2015 Christine Craig Amendment t Attachment E (b) and sectins 16 and 17 t change legal reference t the ASIC Market Integrity Rules (ASX Market) June 2016 Andrea Tanner/Christine Craig Cmprehensive re-write f the plicy including findings frm self-assessment against ASIC Rep 474, Internal audit f cmpliance with SPS 521 and new Plicy writing guidelines. 8.3 Release cntrl Release Date Apprved By Release Ntes 24 August 2010 IOOF Hldings Ltd Apprved by the Bard 24 August March 2013 IOOF Hldings Ltd Adpted by: IOOF Investment Management Limited Questr Financial Services Limited Australian Executr Trustees Limited Apprved by the Bard 26 March August 2013 Amendments requested by APRA apprved by Managing Directr under delegated authrity. Apprved by MD 29 August February 2014 Head f Cmpliance Manuscript amendment 27 Octber 2014 IOOF Hldings Ltd Adpted by: IOOF Investment Management Limited Questr Financial Services Limited Australian Executr Trustees Limited 22 May 2015 Amendment t Attachment E (b) and sectins 16 and 17 t change legal reference t the ASIC Market Integrity Rules (ASX Market) August 2016 IOOF Hldings Ltd, AET, IIML, Questr and IOOF Ltd bards AFS Licensee Bards t adpt Apprved by the Bard 27 Octber 2014 Apprved by the MD 22 May 2015 RCC 26 August 2016 Bard apprved 29 August 2016 subject t RCC s changes 16