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FCA regulations require Firms to establish policies and procedures to ensure that conflicts do not adversely affect a client’s interests or, when this is not possible, inform a client of the conflict so they may decide whether to continue with a particular transaction, investment or to use that Firm. In addition:
- FCA Principle 1 requires a Firm to conduct its business with integrity;
- FCA Principle 6 requires that a Firm must pay due regard to the interests of its clients and treat them fairly;
- FCA Principle 8 requires a Firm to manage conflicts of interest fairly.
This policy sets out Shares App Ltd (the “Firm”) arrangements in connection with the identification, management and prevention of conflicts of interest that may arise during the course of the Firm’s business. This document will not only address any conflicts that arise between the Firm and a client, but it will also address any conflicts that arise between the Firm and another Firm and also between clients.
In the course of business, circumstances may arise whereby the interests of a client conflict with the interests of the Firm, the Firm’s staff, or the interests of another client. The Firm is committed to treating our clients fairly and following the Principles above and specific section of the FCA handbook in COBS 7.1 and SYSC 10.1.
The Firm has developed and implemented policies and procedures to identify, mitigate, manage, and disclose conflicts in order to avoid putting the Firm in a position whereby its own interests, or our duty to any persons for whom we are acting, conflicts with our duty to a client or external Firm. However, the Firm recognises that there may be instances whereby conflicts of interest are unavoidable. A conflict may exist even if no unethical or improper act or detriment results from it.
This policy is applicable to all members of staff of the Firm. All staff members will be required to read the policy and confirm that they have read, understood and agree to be bound by the policy.
What is a Conflict of Interest?
A Conflict of Interest is where the Firm, or a company with which the Firm is associated with, and/or any of the Firms employees is exposed to a number of interests, and the competition between such interests might negatively affect the decision-making or outcomes in the course of the Firms business. A conflict can be the competition of legitimate interests (such as acting for multiple clients), or the presence of harmful ones (such as personal gain of an employee/the Firm at the expense of a client).
A Conflict of Interest under this policy includes both an actual conflict of Interest, and a potential conflict of Interest. It also includes a perceived conflict of Interest (i.e., a situation which may give rise to the perception of a conflict of Interest), even where a conflict of Interest may not in fact exist.
Examples of situations that may give rise to conflicts of interest are;
- The Firm holds knowledge in confidence for one client which would benefit another;
- Acting for one client where this may cause damage to another client;
- The Firm may be remunerated in a way which encourages it to act against its clients’ interests;
- The Firm’s employees may take advantage of client information;
- The Firm and/or a Staff Member failing to comply with legal or regulatory obligations in order to benefit themselves to the detriment of a client;
A conflict of interest may arise in one, or more of the following cases;
- The Firm and the client;
- One client and another client;
- An employee of the Firm and a client;
- An employee and the Firm;
- The Firm and another Firm.
Additionally, the Firm has taken additional steps to try to prevent any conflicts of interest arising including;
- Firm employees may not act for a Client where the employee may have close links with (e.g. is related to) the Client concerned as this may influence the employee to put that Client’s interests ahead of those of other Clients;
- Firm employees may not hold/participate in an outside activity or a position outside their professional capacity (for the Firm) that may conflict with their duties to the firm and its Clients. This arrangement supports the Firms commitment to ensure an employee does not put their own interests ahead of that of a Client.
The Firm has reviewed the risks associated with the Firm’s business and have produced a conflicts of interest register. The conflicts of interest register identifies the areas which may present a higher risk to Clients and sets out the procedures the Firm has implemented to address them.
How the Firm Manages Conflicts of Interest
The management of conflicts involves taking all reasonable steps to prevent conflicts from giving rise to a material risk of damage to the interests of clients, through maintaining and operating effective organisational and administrative arrangements. Where conflicts are identified as having arisen we seek to manage and control them as appropriate to the circumstances. In accordance with guidelines the Firm has the following principles:
- Client’s interests will at all times be protected and preferred to the Firm’s interests.
- Client’s interests where possible will at all times be protected and preferred to third-parties interests.
- Where conflicts between clients arise, the Firm will treat both clients fairly.
- Conflict of Interest issues are disclosed and minimised.
- The Firm operates a policy of transparency through disclosure.
- Employees are asked to disclose conflicts, formally upon employment, annually, and on an ongoing basis. .
- To prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out investment or ancillary services or investment activities.
- To prevent or control the exchange of information between relevant persons where the exchange of that information may harm the interests of one or more Clients.
It is the on-going responsibility of all employees to identify potential and actual conflicts of interest as they arise in the Firm’s business and to notify their manager and/or the Compliance Officer. The Compliance Officer is responsible for implementing appropriate procedures to manage and monitor those conflicts and reports directly to the senior management on a regular basis.
Disclosure to Clients
If the Firm’s arrangements to effectively manage a potential conflict of interest are not sufficient to ensure that the risk of damage to a client’s interests is prevented, the Firm will disclose the conflict to the client in writing. The disclosure will provide sufficient detail to enable the client to make an informed decision with respect to the service in the context of which the conflict of interest has arisen.
Declining to Act
The Firm may decline to act in situations where conflicts of interest are unavoidable.
Policies and procedures
In addition to this Policy, the Firm has comprehensive policies and procedures which are designed to establish consistent controls to manage and mitigate conflicts. These will include:
- An effective compliance monitoring program
- Whistleblowing policy and procedures
- Conducting training
- Gifts and Entertainments Policy
- Complaints Policy and procedures