RESEARCH CONFLICTS POLICY GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL

Transcription

1 RESEARCH CONFLICTS POLICY GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL Policy for managing conflicts of interest 1. INTRODUCTION 1.1 This policy applies solely to all investment research prepared and distributed by Goldman Sachs Asset Management International ( GSAMI, we or us ). 1.2 This policy is available from us on request and is made available on our website at [ We reserve the right to amend or supplement this policy at any time. For the current policy, please check our website. 1.3 This policy is prepared for compliance with the Principles for Businesses issued by our regulator, the Financial Services Authority ( the FSA ), and the FSA s Conduct of Business Rules ( Rules ) that apply to us. It is not intended to create third party rights or duties that would not already exist if the policy had not been made available, or to constitute or form part of any contract between any client or customer of GSAMI and us. 2. MEANING OF INVESTMENT RESEARCH 2.1 Investment research is defined very broadly in the Rules as a document (other than a personal recommendation) which contains one or more of the following: (a) (b) (c) the results of research into a designated investment or its issuer; analysis of factors likely to influence the future performance of a designated investment or its issuer; and advice or recommendations based on those results and that analysis. 2.2 Research Recommendation is defined very broadly in the Rules as research or other information concerning investments which is intended for distribution so that it is likely to become accessible to a larger number of persons or the public, which (a) strategy; or explicitly or implicitly recommends or suggests an investment (b) directly or indirectly expresses a particular investment recommendation; or (c) expresses an opinion as to the present or future value or price of such security, derivative or other relevant instrument to which the recommendation relates. 2.3 Analyst is not used in its conventional broader market sense in this policy. GSAMI does not employ individuals whose primary function is to issue research to third parties. Reference to an analyst in this policy relates

2 to an individual or one of a group of individuals, who is part of a portfolio management team, has responsibility for investigating a range of securities and sharing the result of that research with the broader team, so that the security concerned can be considered for incorporation into a portfolio of securities managed by GSAMI. Dissemination of that research to third parties is incidental to this primary purpose and is only made for the limited purposes specified in this policy. 3. IDENTIFICATION OF POSSIBLE CONFLICTS 3.1 GSAMI prepares investment research solely for its own internal use, including for use by its fund managers in the management of investment portfolios. The Rules do not apply to such investment research as the Rules only apply where GSAMI determines in its discretion to publish or distribute investment research or to make a research recommendation based upon it: (a) (b) which it holds out as being an impartial assessment of the value or prospects of its subject matter; or where it is reasonable for those to whom GSAMI has published or distributed the research to rely on it as an impartial assessment of the value or prospects of its subject matter. 3.2 Subject to 3.5, GSAMI only distributes such investment research to discretionary investment management clients, prospects and other third persons for information and educational purposes as part of its investment management activities and in circumstances in which it will not reasonably be expected to have a material influence on a client s or a third person s investment decision. For example, investment research may be distributed to clients to explain the basis for previously made investment decisions or to third persons as part of a marketing presentation on GSAMI s investment process. 3.3 Subject to 3.5, GSAMI only distributes such investment research in these limited circumstances. Specifically, investment research is only distributed after it has been employed in GSAMI s investment decision making process and management of client assets and where it contains a statement that the information is being provided for information or educational purposes only, that GSAMI may have already dealt on the basis of the information contained in such investment research and may continue to deal upon it and that it does not constitute investment advice. 3.4 Accordingly, many of the Rules applying to investment research are unlikely to apply to the investment research prepared and distributed by GSAMI. In addition, conflicts of interest, or the appearance of conflicts, between the recipients of GSAMI investment research, discretionary investment management clients and the personal interests of our officers and employees are thought to be relatively unlikely to arise given the nature of the research and our Chinese Walls. However, in accordance

3 with the Rules, we operate policies and internal procedures to assist us in identifying possible conflicts of interest, provide internal guidance and training to officers and employees and ensure that senior management periodically review these policies and procedures for continued compliance with the Rules. 3.5 GSAMI will publish the results of its internal investment research, which has led it to make investment recommendations in relation to certain Collateralised Debt Obligations ( CDOs ) structures of which an affiliate acts as Arrangers and Dealers. While it is not the intention of GSAMI that third parties act on this information, which is intended for information purposes only, the definitions contained in the Rules indicate that it is possible that it may amount to investment research or a research recommendation and, accordingly, such information is covered by the policy.

4 4. SUPERVISION AND REMUNERATION OF ANALYSTS 4.1 Our policy is that analysts are not supervised by personnel from other business units of Goldman Sachs whose functions may conflict with those of the analysts. 4.2 The evaluation and remuneration of analysts within our portfolio management teams is determined on the basis of a number of factors, including quality and accuracy of research, productivity and experience. Analysts remuneration is not directly linked to individual transactions or pieces of investment research but rather reflects, in part, the relative performance of a portfolio of stocks subject to discretionary management or advice by GSAMI. It will also be impacted by a range of other factors such as prevailing market rates, performance of the analyst s team as well as, of course, the overall profitability of GSAMI and the Firm. 4.3 For the avoidance of doubt, given that the primary function of analysts within GSAMI is support its investment process, analysts compensation is not linked to the views of any third party as to the qualities of a piece of research prepared by an analyst and released to clients or third parties in the circumstances set out at 3.2 above. 5. ACTIVITIES OF ANALYSTS 5.1 It is our policy to adopt policies and procedures designed to prevent staff, including analysts, from carrying on activities which could result in GSAMI being regarded as holding out investment research as being an impartial assessment of the value or prospects of its subject matter or which it is reasonable for those to whom GSAMI has published or distributed the research to rely on it as an impartial assessment of the value or prospects of its subject matter. Public appearances: It is our policy to educate staff, including analysts, to refrain from producing or initiating documents in connection with public appearances which could amount to investment research to which the Rules apply. 5.2 It is our policy to prohibit analysts from performing roles within Goldman Sachs that could prejudice, or may appear to prejudice, the independence of their research to which the Rules apply. 5.3 To ensure the proper functioning of this policy, analysts are required to disclose all personal interests relevant to their research functions. 5.4 Analysts are required to comply with GSAMI s rules and procedures on personal account dealing, which include requirements for dealings to be conducted through an account with Goldman Sachs and to be precleared with GSAMI s compliance department. 6. INDUCEMENTS AND INAPPROPRIATE INFLUENCES

5 6.1 In accordance with the Rules, it is our policy to monitor any inducement offered or received by our employees. This would include any inducement in respect of analysts production of research so as to ensure that this does not interfere with their duties and are at all times in accordance with the Rules.

6 7. REVIEW AND COMMENT ON INVESTMENT RESEARCH 7.1 We operate policies to ensure that parties with interests which potentially conflict with those of recipients of investment research to which the Rules apply are not able to review or comment on research in a manner which might affect the impartiality of the research. 8. TIMING AND CONTENT OF INVESTMENT RESEARCH 8.1 We operate policies to ensure that decisions on the timing and content of investment research to which the Rules apply are not made, or inappropriately influenced, by persons with interests conflicting with those of users of investment research and that new research and other material statements of an analyst s views are not disclosed prematurely. 9. DISCLOSURE OF INTERESTS 9.1 GSAMI s policy is to disclose in investment research to which the Rules apply, in accordance with applicable law and regulation, particulars of interests, including those of GSAMI and the analyst, that are or may be material in the context of the relevant report.