Conflict of Interest Policy and Statement | Measures and Procedures | Information Barriers and Separate Supervision | Mortgage Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

Conflict of Interest Policy

1. Policy Statement

The company are committed to the identification and fair management of any conflict of interest which may arise in the normal course of business. In accordance with the Financial Conduct Authority (FCA) handbook and specifically Principle 8 and section SYSC 10, we aim to manage conflicts of interest fairly, both between the company and our customers, and between any customer and another client.

2. Purpose

This purpose of this policy is to provide clear guidance on managing conflicts of interest and to ensure a fair and transparent approach. As a service provider in the [Financial Services/Consumer Credit] sector, it is natural that we face conflict of interest from time to time, and it is our aim to take measures and implement controls identify and manage any such conflict.

3. Scope

The policy applies to all staff (meaning permanent, fixed term, and temporary staff, any third-party representatives or sub-contractors, agency workers, volunteers, interns and agents engaged with the company in the UK or overseas) within the organisation and has been created to ensure that staff deal with the area that this policy relates to in accordance with legal, regulatory, contractual and business expectations and requirements.

4. What Is a Conflict of Interest?

A conflict of interest as it relates to business is defined as an action or relationship that may impair the ability to make an objective and fair decision. This conflict can arise from the impairment of an individual employee or as a business activity.

A conflict of interest in a financial firm is defined as an employee or the firm itself having a financial interest in a client or business activity with which it is involved, resulting in the potential compromise of the advice, products or services provided to the detriment of the client.

Financial conflicts of interest are seen to be tangible, because they can be seen and measured, however this is not always the case and, so it is important for firms to put controls, systems and procedures in place to assess, identify, manage and monitor conflicts of interest.

5. Objectives

The company has laid out the below objectives which it aims to meet when dealing with financial conflicts of interest: –

• Ensure clear procedures are in place for identifying and managing conflicts of interest.
• Ensure that all staff are provided with training on identifying and dealing with conflicts of interest, including being advised of the responsible person within the firm.
• Ensure that we comply with FCA Principle 8 and handbook section SYSC 10 on managing conflicts of interest.
• We will ensure that any conflict, including potential conflicts, are recorded and continuously monitored, including any risks associated with such conflicts.
• We will maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest as defined in SYSC 10.1.3.
• If the mitigating measures and controls used to prevent conflicts of interest are not successful in preventing risk to clients, we will clearly disclose the general nature and sources of the conflicts before undertaking any working relationship with the client.
• We will ensure that this Conflicts of Interest policy is updated and maintained in accordance with legal and regulatory requirements and any updates are communicated to staff in a timely manner.

6. Types of Conflict of Interest Relevant to the company

6.1 Types of Conflict of Interest

When identifying conflicts of interest that may arise, the company considers whether the firm or any employee: –

• Is likely to make a financial gain, or avoid a financial loss, at the expense of the client.
• Has an interest in the outcome of a service provided to the client, or of a transaction carried out on behalf of the client, which is distinct from the client’s interest in that outcome.
• Has a financial or other incentive to favour the interest of another client or group of clients over the interests of the client.
• Carries on the same business as the client.
• Receives or will receive from a person other than the client, an inducement in relation to a service provided to the client, in the form of monies, goods or services, other than the standard commission or fee for that service.

6.2 Circumstances Leading to Conflicts of Interest

[Section SYSC 10.1.11 of the FCA Handbook advises what should be contained in this COI Policy, which includes circumstances which constitute or may give rise to a conflict of interest in your business – below YOU must add the circumstances relevant to your business that could result in a conflict of interest.]

EXAMPLES

• Providing services in different capacities at the same time
• Giving financial advice that directly benefits the firm and/or any of its employees
• Acting for more than one client in a financial transaction
• Accepting benefits or gifts that could be construed as conflicting with our duties to the client
• ADD YOUR CIRCUMSTANCES IN PLACE OF THESE

7. Our Measures and Procedures

The full Conflicts of Interest procedures for the company can be found in our separate Procedure Document [This is not supplied as they are bespoke to each firm], however below is a summary of the measures and controls we have in place to identify and manage conflicts of interest.

7.1 Information Barriers

Effective and robust procedures are in place to control the flow of information where a client may be at risk of a conflict of interest.  Access to confidential information is restricted to those staff members who have a proper requirement due to the nature of their role or business activity. Information barriers have been set up as part of our COI procedures to prevent the flow of information to and from other parts of the firm, which serves to mitigate against conflicts of interest.

The company complies with all laws and regulations on the handling of any such information and procedures are in place for the use, storage and retention of any such data.

7.2 Separate Supervision

If two or more departments with the firm could incur a conflict of interest in the working together, these departments have clear separation of duties as well as separate supervisory procedures and managers.

7.3 Remuneration

Any staff member that is open to conflicts of interest in their role or business activities are not subject to commissions or bonuses that are performance related. Any incentives or bonuses offered to staff are strictly monitored by management to ensure that conflicts of interest are not a deciding factor and cannot be misconstrued as such. No pay is linked to specific clients or transactions.

7.4 Disclosure

Where there is no way to prevent the conflict of interest, the company will disclose the nature and source of the conflict to the client/s prior to forming a working relationship with them. All disclosed conflicts will be recorded on the COI Register for auditing and regulatory purposes.

This disclosure is done with the intent of allowing the client to make an informed decision regarding the working relationship and nature of the conflict.

7.5 Removal from Duty

On occasion, staff may be removed from tasks, transactions or working client accounts where a known conflict of interest has been identified.

8. Record Keeping

In accordance with the FCA rules for identifying and managing Conflicts of Interest, the company maintain a COI Register which contains all the regulated activities undertaken by the firm in which any conflict of interest that entailed a material risk of damage to the interests of one or more clients has arisen or may have arisen.

9. Responsibilities

9.1 The company ensures that all staff are provided with the time, training and support to learn, understand and implement the Conflicts of Interest Policy and subsequent procedures. Management are responsible for a top down approach and in ensuring that all staff are included and have the support needed to meet the regulatory requirements in this area.

9.2 The Compliance Officer and Senior Management are responsible for developing the procedures to identify and manage conflicts of interest and for monitoring these procedures to ensure that they are fit for purpose.