Conflicts of interest policy

Executive summary

Conflicts of interest are unavoidable and could cause considerable damage to CCLA and the interests of clients if they are not managed properly. CCLA considers the identification and management of such conflicts fundamental to our integrity and the delivery of good outcomes for customers. CCLA has taken all appropriate steps to identify and manage the conflicts (actual and potential) that it faces in its day-to-day business.

This Policy sets out the circumstances that may give rise to a conflict or potential conflict and CCLA’s expectations regarding disclosure.

Scope

This Policy applies to all CCLA executive directors, permanent employees, fixed-term employees, contractors and Non-Executive Directors (collectively “employees” for the purpose of this policy). All employees are responsible for understanding the contents of this Policy.

Conflicts of interest

Conflicts of interest may be static or active for a period of time and can take different forms such as:

  • favouring one client over another;
  • CCLA making a financial gain, or avoiding a financial loss, at the expense of the client;
  • a CCLA employee being favoured over a client;
  • CCLA providing to (or receiving from) a person other than the client, an inducement in relation to a service provided to the client, in the form of a financial interest; or
  • favouring CCLA shareholders over a client.

Conflict management

CCLA has established processes and procedures to help ensure that all conflicts of interest identified are managed in a manner that seeks to ensure that CCLA or its employees act in the best interests of its funds, its investors and/or potential investors. Where new potential conflicts are identified, similarly, processes and procedures will be established to manage them accordingly.

This Policy shall be reviewed periodically, at least on an annual basis with a view to addressing any deficiencies. The Policy will be published on CCLA’s website.

Conflict monitoring

CCLA’s business is monitored through internal audit reviews, risk assessments and compliance monitoring reviews, all of which can identify conflicts of interest. Individual employees are also expected to identify any conflicts of interest that may arise during their day to day business. In accordance with the regulatory requirements, details of conflicts are recorded in the Conflicts of Interest Register maintained by the Compliance department. The Conflicts of Interest Register will be reported at the periodic Executive Committee meetings where it gets reviewed by the Senior Executives of the firm, and at the quarterly Risk Committee meetings.

Education and awareness

All employees must attest to having read and understood CCLA’s Compliance Manual and associated policies, including personal account dealing and Anti-Bribery (including gifts and hospitality) Policy as well as this policy, amongst others. The Manual outlines employee responsibilities with regard to identifying and managing conflicts of interest.

Conflicts disclosures to clients

Where CCLA’s arrangements to manage conflicts are not sufficient to ensure, with reasonable confidence, that risks of detriment to the interests of a client/investor will be prevented, CCLA will clearly disclose the following to the client/investor before undertaking or continuing business with them:

  • The general nature or sources of conflicts or both; and
  • The steps taken to mitigate those risks.

Further, the disclosure will:

  • be made in a durable medium;
  • clearly state that the organisational administrative arrangements established by CCLA to prevent or manage that conflict are not sufficient to ensure, with reasonable confidence, that the risks of damage to the interests of the client will be prevented;
  • include specific description of the conflicts of interest that arise in the provision of investment services;
  • explain the risks to the client that arise as a result of the conflict of interest; and
  • include sufficient detail taking into account the nature of the client, to enable that client to take an informed decision with respect to the service in context of which the conflict of interest arises.

CCLA shall treat the disclosure of conflicts to clients as a measure of last resort, to be used only where the effective organisational and administrative arrangements established to prevent or manage conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks to the interests of the client will be prevented.

Retention of records

The Compliance department will maintain records for a minimum of seven years’ worth of the following items:

  • Employee disclosures
  • Disclosures communicated to clients
  • Conflict registers

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