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At Seven Investment Management LLP (7IM) our most fundamental principle is that our long term interests are aligned with those of our clients. In addition we pride ourselves on treating our customers fairly and acting with integrity at all times. However we do not believe it is enough just to say that this is the case; it is essential that we have policies in place which aim to achieve our objective in practice and to help to ensure that if we ever fall below the standards which we set ourselves that such instances are quickly identified, corrected and learned from. Conflicts of interest can arise between the interests of 7IM or persons connected to 7IM and the duty of care we owe to our clients. Conflicts may also arise between the interests of our clients. This policy sets out our procedures in managing new and existing conflicts and the actions we take to prevent bribery and corruption to ensure the business operates with integrity.
WHO THIS POLICY APPLIES TO
This policy applies to all 7IM staff which includes members, employees, and any permanent or temporary contractors.
CONFLICT OF INTEREST COMMITTEE
The 7IM Executive Committee will act as the Conflict of Interest Committee and will deal with any related matters.
ANTI-BRIBERY AND CORRUPTION
Under the Bribery Act 2010 it is a criminal offence to:
Instances where bribery or corruption may have common factors to circumstances where conflicts of interest may arise and therefore both are dealt with in the policy that follows. Members of staff are reminded that the Bribery Act relates to all business, whether conducted in the UK or overseas.
The majority of 7IM’s business is UK based, however should business be conducted outside of the UK, members of staff are reminded that, in addition to complying with the Bribery Act, they should also comply with the anti-bribery and anti-corruption legislation in the relevant jurisdiction. The 7IM Executive Committee are responsible for reviewing this policy and ensuring all procedures for mitigating the risk of bribery and corruption maintain the high standards set. In addition the risk of bribery and corruption is also reviewed when considering new business opportunities.
The following have been identified as areas where potential conflicts of interests may arise or areas where specific action is required to mitigate the risk of bribery and corruption.
Occasionally 7IM will receive sensitive information regarding companies in which it invests in on behalf of clients. Due to the nature of investments made this is unlikely to be a frequent occurrence. Should such information be received it is logged with the Compliance Officer who will monitor any transactions entered into until the information ceases to be sensitive.
DECLARATION OF INTERESTS IN THIRD PARTY COMPANIES
All members of staff must declare any interest in any third party company that 7IM is involved with (or conducts business with) – this includes (but is not limited to) Financial Advisers/Wealth Managers, Corporate Relationships, IT Providers, and any other business relationships or outsourced services used by 7IM. In circumstances where the Conflicts of Interest Committee consider a conflict (which may arise) to be unmanageable, they may request the employee to relinquish that interest.
Decisions Taken Where a Board Member or Member of Staff has an Interest
In the event of a decision as to whether an issue in which a member of staff is involved in is a conflict, this matter will be discussed by the Conflict of Interest Committee. A member of the Committee may not be involved in discussions (or present at the discussions) on matters affecting their own interests. All decisions relating to a Conflict of Interest should be recorded.
DECLARATIONS OF OUTSIDE DIRECTORSHIPS
If any member of staff holds or proposes to hold an outside Directorship this must be reported to HR on joining 7IM or before the directorship is undertaken. If there is reason to believe there is a conflict this will be reported to the Conflicts of Interest Committee to make a decision.
THIRD PARTY BUSINESS RELATIONSHIPS
Where 7IM enter into a business agreement with a third party all terms and charges set out in contracts (whether by 7IM or a third party) should always be fair and should not include beneficial terms for 7IM as opposed to our clients. Reviews are conducted throughout regular service meetings with the third party to ensure circumstances have not changed.
As part of the market 7IM operate in we are often approached to provide assistance or funding for events for the participants in the industry. 7IM recognise that entering an agreement for these events may be construed as an inducement. Prior to confirmation, agreements are reviewed by both 7IM’s Legal and Compliance departments to ensure that such agreements comply with specifc rules and regulatory guidance.
PERSONAL ACCOUNT DEALING
All members of staff are covered by the Personal Account Dealing policy contained within the Compliance Manual; adherence to that policy is a contractual obligation. The policy has been designed to ensure clients are not disadvantaged and that conflicts are extinguished at the earliest opportunity. Specific confirmation is sought from all new joiners that they have read, understood and agree to abide by the policy. Generally members of staff use the dealing facilities provided by 7IM, however, where an individual wishes to use another regulated firm, this must be discussed with Compliance prior to using. If deemed appropriate, copy statements of actvitiy must be sent to Compliance by the firm to ensure activity can be monitored. Pre-approval must be sought from the Chief Investment Officer with Compliance oversight when wishing to conduct certain transactions. Monitoring is conducted on a monthly basis to ensure compliance with the rules and management are informed of any issues arising.
FEES AND REBATES
7IM are fully compliant with the FCA’s Retail Distribution Review. As such ongoing charges are only paid to Wealth Managers where they have provided an ongoing service or for regular payment products and where they are specifically authorised by the client. We encourage and facilitate the full disclosure of fees to clients, whether directly from us or via Wealth Managers to the underlying client. Any rebates from fund managers are returned to the clients’ portfolios wherever possible. However any HMRC taxation charges due from these rebates will be deducted. In the light of the recent regulatory paper on the subject we are in the process of converting shares which carry rebates into clean share classes.
SUPERVISION AND REMUNERATION OF: RELATIONSHIP MANAGEMENT TEAM INVESTMENT MANAGEMENT TEAM
DEALING & RESEARCH
Charges for research from firms is sometimes included within the commission price on transactions. 7IM recognises that a potential conflict could exist between getting the best price for our clients and achieving the most valuable research. To limit the potential for this conflict to arise, it is the responsibility of 7IM’s dealing desk and not the Investment team (who receive the research) to decide where an order should be placed. Therefore the receipt of research is not a factor in this decision.
GIFTS AND CORPORATE HOSPITALITY
It is recognised that clients and business associates with 7IM may provide staff with gifts or offers of hospitality. 7IM has an Inducements, Gifts and Hospitality policy contained within the Compliance Manual which all members of staff should be familiar with.
Receipt of Gifts
Cash should never be accepted;
Offering of Gifts
7IM recognise that this area is particularly open to the risk of bribery and corruption. All members of staff are therefore reminded of the policy in place and the criminal repercussions of falling foul of the Bribery Act 2010. Where a member of staff is being offered hospitality or a gift exceeding the values set within 7IM’s Gifts and Hospitality Policy and are unsure of the action to take then they are encouraged to discuss this with Compliance.
SUITABLE INVESTMENT OPPORTUNITIES
All investments are promptly and accurately recorded. Where transactions involve several clients these transactions are allocated fairly.
If a cross trade is required (a transfer of securities between customers’ portfolios) then these will be conducted through the market for a nominal fee. This will contribute to ensure a fair price is received. In addition the reasons for conducting a cross trade will be recorded to evidence why it was believed to be beneficial to both clients.
Errors that occur during the day-to-day running of the business are reported to Compliance in accordance with 7IM’s Error Policy contained within the Compliance Manual. 7IM encourages errors to be reported to ensure the smooth running of our business. Errors are monitored and reviewed for similar issues or repeated errors by an individual and, where necessary, further training or awareness of the issue can be highlighted to the department(s) concerned to prevent future recurrence. Any errors which may cause a loss to the client as a result of 7IM’s actions or omissions are rectified at no cost to the client. The client is effectively put back into the position they would have been in had the error not occurred. Where the actions or omissions causing the error are as a result of a third party, 7IM ensures the client does not suffer and will recover any loss from the third party.
WHAT SHOULD YOU DO?
It is the responsibility of all 7IM members of staff to take all reasonable steps to ensure compliance with this policy and to prevent, detect and report any suspected bribery, fraud, corruption or breaches of this policy. Any reports of suspicion should be directed to Compliance who will, where practical and appropriate, maintain confidentiality during the investigation.
WHAT HAPPENS IF PROCEDURES ARE NOT FOLLOWED?
A breach of any of the policies referred to above is considered a disciplinary offence and dealt with in accordance with 7IM’s disciplinary policy.7IM members of staff are reminded that they can be held personally liable for offences under the Bribery Act. If it is suspected that an offence has been committed, 7IM may report this to the appropriate authorities which may include regulatory bodies such as the FCA and the police.
If you are unsure of anything contained within this Policy or associated policies then you should contact Compliance (firstname.lastname@example.org) for further training and guidance.