The General Code of Conduct for Financial Services Providers and Representatives (the “Code”) published in terms of the Financial Advisory and Intermediary Services Act, No. 37 of 2002 (“FAIS”), requires every Financial Services Provider (“FSP”) to adopt, implement and maintain a Conflict of Interest Management Policy.
All Employees of Mexem Africa (Pty) Ltd (“Mexem”) must perform their duties independently and act in the best interests of Mexem’s existing and potential clients (“Clients”). Accordingly, this Policy applies to any staff who have entered into a permanent, fixed term or temporary contract of employment with Mexem.
Mexem has introduced reasonable mechanisms to identify Conflicts
of Interest between:
itself, Employees and Clients; and between different Clients.
In considering potential Conflicts of Interest, Mexem considers: (i) the structure and business activities of Mexem; and (ii) any proposed new business activities of Mexem.
Mexem is obliged to render unbiased and fair financial services to Clients. Accordingly, we must take all reasonable steps to avoid any business activities and/or practices that may create Conflicts of Interest between Mexem and Employee interests, and the interests of Clients. In the event that it is not possible to avoid a Conflict of Interest, Mexem will take all reasonable steps to mitigate the impact as well as appropriately disclosing any such Conflict of Interest to Clients.
PURPOSE OF THIS POLICY
The purpose of this Conflicts of Interest Management Policy is primarily to provide mechanisms for the identification and management of Conflicts of Interest that may arise in the rendering of financial services to Clients.
APPLICATION OF THIS POLICY
This Conflicts of Interest Management Policy applies to all Employees and must be read together with the related policies listed below, some of which reflect specific categories of Conflicts of Interest:
- Gifts and Inducements;
- Outside Interests and Personal Account Investing;
- Insider Trading;
- Code of Ethics;
- Order Execution;
- Transaction Costs Disclosure;
- Counterparty and Credit Risk;
- Proprietary Trading; and
MECHANISMS THROUGH WHICH MEXEM IDENTIFIES AND MANAGES ACTUAL OR
POTENTIAL CONFLICTS OF INTEREST
All Employees are required to report any potential or actual Conflicts of Interest to the Compliance Officer. The onus is on every Employee to comply with this Policy. Should any individual be uncertain as to whether they are in a conflicted situation e.g. whether a particular action or omission amounts to a Conflict of Interest, then he/she should contact the Compliance Officer immediately.
Every manager must, on an ongoing basis, identify any actual or potential Conflicts of Interest which may arise within his or her area. These must be reported to the Compliance Officer. The Compliance Officer maintains a Conflicts of Interest Register which is reviewed periodically with executive directors to determine whether conflicts already identified are still valid, whether the mitigation strategies in place operate effectively and whether there are any new or potential conflicts that may have arisen since the last review.
The Compliance Officer will investigate any potential or actual Conflicts of Interest to determine whether such conflicts are conflicts as contemplated in FAIS or any other applicable legislation. The Compliance Officer, in conjunction with executive directors, will determine whether such Conflicts of Interest are avoidable or unavoidable conflicts.
If a Conflict of Interest is identified as being avoidable, then Mexem will adopt the necessary internal procedures to ensure that the activity that gives rise to the avoidable conflict is avoided.
If a Conflict of Interest is identified as being
unavoidable, the Compliance Officer, in conjunction with the executive
directors, will establish a strategy to mitigate the risk of such Conflict of
Interest impacting negatively on Mexem’s ability to render fair and unbiased
services to affected Clients.
Mexem will disclose any specific Conflict of Interest impacting a Client to such impacted Client, together with the mitigation strategy employed.
GUIDELINES IN RELATION TO FINANCIAL OR OWNERSHIP INTERESTS
No Employee may accept/give a Financial Interest or Ownership Interest from/to a Third Party, other than an Immaterial Financial Interest.
Mexem may not offer any Financial Interest to an Employee which incentivizes such Employee to:
- Give preference to the quantity of business over quality of service rendered to Clients;
- Give preference to a specific product supplier in the event that it is possible to recommend more than one supplier to a Client; and/or
- Give preference to a specific product in the event that it is possible to recommend more than one product to a Client.
No employee may directly or indirectly refer any actual or potential item of designated investment business to another person on their own initiative or on instruction from Mexem, if it is likely to conflict with any duty that Mexem owes to its lients or any duty which such recipient firm owes to its Clients.
REPRESENTATIVE’S ENTITLEMENT TO FINANCIAL INTEREST
As consideration for providing services to Clients, Representatives are entitled to remuneration by salary and other benefits in terms of their contracts of employments.
No Employee may receive a Financial Interest that leads to a potential Conflict of Interest between the Employee and any Clients.
No Employee may be remunerated in such a way that encourages that Employee to contravene this Policy.
MANAGEMENT OF CONFLICTS OF INTEREST
Once an actual or potential Conflict of Interest has been identified, it must be reported to the Compliance Officer in the prescribed manner.
The Compliance Officer will keep a record of all actual or potential Conflicts of Interest in the Conflicts of Interest Register.
The Compliance Officer is responsible for monitoring Mexem’s adherence to the Conflicts of Interests Management Policy.
The Conflicts of Interests Management Policy and related policies are reviewed annually, and where necessary, updated to ensure that the provisions remain sufficient to identify, assess, evaluate and mitigate Conflicts of Interest.
CONSEQUENCES FOR NON-COMPLIANCE
If any Employee fails to comply with the contents of this Policy or avoids same through any means, it will be regarded as a breach of his/her employment contract. This will potentially render the individual liable to sanction under both the FAIS Act and Mexem’s disciplinary procedures.
TRAINING OF RELEVANT POLICIES
All Employees must know and understand the Conflicts of Interest Management Policy aswell as the policies relating to the identified categories of potential Conflicts of Interests. Appropriate training will be provided to all Employees on a periodic basis.
ACCEPTANCE AND PUBLICATION OF THE CONFLICTS OF INTEREST
The directors have adopted this Conflicts of Interest Management Policy as well as the policies relating to the identified categories of potential Conflicts of Interest. The Conflicts of Interest Management Policy is available to all Employees.