Our Policies: Management of Conflicts of Interest

Management of conflicts of interest

What are conflicts of interest?

Legally, a conflict of interest is where a firm puts itself in a position where its own interests conflict with the duty owed to its clients. However, the FCA uses the term to cover all conflicts inherent in and arising from performance of fiduciary duties. Our policy therefore covers:

  • Conflicts of interest – where our interests conflict with our clients’
  • Conflicts of duty – where our duties to one client conflict with our duty to another
  • Duty of confidentiality – which we owe to our clients

FCA Requirements

FCA Principle 8 – ‘A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client’. The SYSC Rules also require us to have adequate systems and controls to manage risks. The new MiFID Rules require us to formally document this. It is not sufficient that we rely solely on disclosure of conflicts in customer agreements etc.

Conflicts of Interest Policy

In accordance with our regulatory requirements it is our policy to identify all potential material conflicts inherent in our business and have adequate systems and controls to avoid or mitigate their impact on customers, including disclosure to customers as appropriate.

It is incumbent on our Board to consider and all our staff to escalate any matter that they consider may conflict with our policy. The Risk Management Committee regularly reviews any issues raised in this manner or by virtue of any other business development.

Conflicts Inventory

Potential Conflicts

Management Arrangements

Dealing with Customers

  1. Promotional material
    That financial promotions including non-independent investment research promotions, are unfair, unclear and/or misleading.
  2. Third party marketers
    That inappropriately licensed or disreputable firms with undisclosed remuneration arrangements are involved in attracting new clients.
  3. Preferential arrangements
    That arrangements are established providing advantages for certain investors that disadvantage others.
  4. Interests in issuers
    That recommendations are made to clients where we have a material or other commercial interests and the objectivity of the recommendation is compromised.
  5. Portfolios
    May be managed on behalf of persons who in turn introduce other clients

What we do

  1. Promotional material
    All such material is approved by individuals assessed as competent and formally apportioned responsibility and is independently signed off by a qualified person other than the preparer
  2. Third party marketers
    Rowan Dartington has no third party marketers.
  3. Preferential arrangements
    Rowan Dartington has not entered into any arrangements with particular clients that could disadvantage any other clients and ensures all research issued is distributed to clients fairly.
  4. Interests in issuers
    Rowan Dartington does not make research recommendations on the securities of issuers where it has had material or other commercial interests in the previous 12 months. Where it does, it will disclose such information to clients on a case-by-case basis. Materials issued to promote the shares of issuers with whom we have a relationship are clearly marked as promotional material.
  5. Portfolios
    All portfolios are managed on a commercial arms-length basis. Our relationships with introducers are documented and transparent.

Execution of Transactions

  1. Suitability
    That suitability requirements are not adhered to and that excessive transactions are undertaken.
  2. Confidentiality
    That commercial or private information is not sufficiently protected
  3. Appropriateness.
    That the appropriateness of relevant transactions is not established and our interests as a firm are put before those of clients.
  4. Activity Levels
    That client transaction activity levels are either less or more than the level appropriate to meet its investment objectives.
  5. Transaction Order Handling
    That customer orders are not handled fairly in relation to other customers or the firm.
  6. Best Execution
    That transaction quality or counterpart relationships are negligently managed.
  7. Affiliates
    That business is routed through affiliates in inordinate amounts or on unfair terms.
  8. Bundling
    That services are provided to clients in exchange for transaction commission that constitute an inducement i.e. they do not comprise either best execution or research.
  9. Market Abuse
    That we undertake activities that constitute market abuse, including market timing, that compromise the integrity of our investment process or product.
  10. Trade Errors
    That the costs of client trading errors are inappropriately picked up.
  11. Principal Trading
    That the interests of the firm are put before those of clients e.g. front running.
  12. PA Dealing
    That the interests of staff are put before those of clients e.g. front running

What we do

  1. Suitability
    Rowan Dartington establishes its clients’ understanding of risk, their ability to withstand losses and their investment objectives prior to commencement of business and on an ongoing basis. Rowan Dartington’s internal procedures outline how these factors should be taken into account and are independently monitored.
  2. Confidentiality
    The standards relating to the imperative of client and commercial confidentiality are clearly laid out in our internal procedures.
  3. Appropriateness
    During the client classification process Rowan Dartington establishes clients’ understanding of risk and endeavours to highlight where clients’ instructions appear uncorrelated to this understanding.
  4. Activity Levels
    Activity levels are reviewed by business and risk management on a regular basis to identify patterns of activity outside normal parameters.
  5. Transaction Order Handling
    Transactions are either handled in accordance with customers specific instructions or in accordance with procedures requiring fair treatment for all customers and are independently monitored.
  6. Best Execution
    Rowan Dartington has established a Best Execution Policy which is communicated to all staff and clients.
  7. Affiliates
    Rowan Dartington only executes transactions through affiliates where it considers this to be in the clients best interests.
  8. Bundling
    Commissions are only charged for achieving best execution and for research. Rowan Dartington reports to all its clients the split between these services.Other services provided to clients by Rowan Dartington are charged discretely.
  9. Market Abuse
    Rowan Dartington has in place practices and policies to ensure awareness amongst all staff of its, and their, obligations and actively trains its staff to reinforce and administer its Market Abuse prevention regime.
  10. Trade Errors
    Rowan Dartington’s trade error resolution policy is to make good any errors arising from its own errors. Rowan Dartington does not pick up the costs of errors made by clients.
  11. Principal Trading
    Rowan Dartington makes clear where it, or an affiliate, may have an interest in certain securities and its internal procedures are designed to ensure customers’ interests are given the highest priority.
  12. PA Dealing
    The standards expected of staff in relation to their PA deals are clearly laid out and communicated via internal procedures. All deals must be independently approved prior to execution and retrospectively reviewed.

Infrastructure Arrangements

  1. Firm remuneration
    That the firms remuneration arrangements are undisclosed.
  2. Staff remuneration
    That staff are remunerated to act in a manner that conflicts with clients objectives.
  3. Recruitment and development
    That inappropriate staff are hired or that staff are not adequately developed.
  4. Key Man Risk
    That reasonable arrangements to minimise the likelihood of losing key staff are not established.
  5. Insufficient Resources
    That insufficient financial or human resources are in place to ensure delivery of contractual obligations and that sufficient segregation of duties is maintained to manage risk.
  6. Gifts and entertainment (Inducements)
    That the integrity of either staff or suppliers is compromised by excessive largess.
  7. Business Continuity
    That inadequate arrangements are established to ensure continuance of the business in the event of a disaster.

What we do

  1. Firm Renumeration
    Rowan Dartington’s client agreements set out the basis of our remuneration in full.
  2. Staff Renumeration
    The long-term interests of our staff are designed to correlate with the interests and financial wellbeing of our clients and their activities are overseen and monitored.
  3. Recruitment and development
    Rowan Dartington aims to hire experienced professionals and has in place a rigorous referencing and recruitment process. This is complemented with a formal appraisal and personal development programme.
  4. Key Man Risk
    Key individuals are identified on an ongoing basis and succession plans and development arrangements are adopted as appropriate.
  5. Insufficient Resources
    Rowan Dartington carries excess capital in accordance with its regulatory requirements. During its annual budgeting processes it has full regard to the need to maintain adequate resources to fulfil its contractual obligations and the maintenance of segregation of duties in key areas.
  6. Gifts and entertainment (Inducements)
    The standards expected and the internal approval and disclosure requirements with regard to inducements are clearly set out in our internal procedures.
  7. Business Continuity
    Rowan Dartington regularly tests the adequacy of key components of its plans.

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