Conflict of Interest Policy

1. Introduction
2. Regulation
3. Definition of a Conflict of Interest
4. Identification of Conflicts of Interest
4.1 Conflict: Corporate broking and advisory clients
4.2 Conflict: Personal Account Dealing
4.3 Conflict: Gifts, hospitality and inducements
4.4 Outside business interests
4.5 Conflict: Remuneration
4.6 Conflict: Segregation of duties
5. Requirements for Employees
6. Managing and Recording Conflicts of Interest
7. Record Keeping
8. Training and Review
9. Failure to Comply
10. Amendments to this Policy

1. Introduction
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It is important to identify and manage conflicts of interest which arise or may arise in the course of providing a service. A conflict of interest may arise where a Firm or an employee who, owing a duty to a client, may have personal or professional interests which compete with this duty and may entail a risk of material damage to clients’ interests. A situation may be a conflict of interest even if no improper act or disadvantage to the client arises from it.

Clear Capital Markets Limited (the “Firm”) is committed to identifying, monitoring, and managing all actual and potential conflicts of interest that can arise between the Firm’s clients and between the Firm’s clients and the Firm.

The purpose of this Policy is to identify and summarise those conflicts which the Firm may experience as an organisation and how it can address the challenges that such conflicts create. It also provides the Firm’s clients with appropriate information relating to the policies the Firm has in place to identify and manage conflicts of interest.

2. Regulation

This Policy is designed to fulfil the Firm’s obligations under SYSC 10, COBS 12 and Principle for Business 8 of the FCA Handbook, the first two of which implemented the Markets in Financial Instruments Directive (“MiFID”). This Policy should ensure that procedures are in place to identify, monitor and handle all potential and actual conflicts so that these are not to the detriment of the client.

3. Definition of a Conflict of Interest

Conflicts of interest are defined in the context of FCA rules as any conflicts which arise between the following when the Firm is carrying out activities which are regulated by the FCA or ancillary services:

The Firm and a client; or
A client and another client.

4. Identification of Conflicts of Interest

Conflicts of interest may arise in the course of providing investment or ancillary services whose existence may damage the interests of a client. The Firm considers that as a minimum, any of the following situations may give rise to a conflict of interest:

The Firm or relevant person is likely to make a financial gain, or avoid a financial loss, at the expense of the client.

The Firm or relevant person has an interest in the outcome of a service provided to the client or of a transaction carried out on behalf of a client which is distinct from the client’s interest in that outcome.

The Firm or relevant person has a financial or other incentive to favour the interest of a client or group of clients over the interest of another client.

The Firm or relevant person carries on the same business as the client.

The Firm or relevant person receives or will receive from another other than the client, an inducement in relation to a service provided to the client in the form of a financial gain, goods, or services – other than the standard fee or commission for that service.

Examples of conflicts of interest relevant to the Firm:

4.1 Conflict: Corporate broking and advisory clients

Nature of conflict and measures: The Firm acts as corporate broker to corporate broking clients and is remunerated for this service. The Firm also provides advisory clients with an advisory service that may include transactions involving corporate broking clients. In this situation, the Firm is acting on behalf of the issuer and may act for investors participating in such offerings.

One of the key aims of the Firm’s Remuneration Policy is to avoid conflicts of interest and to align employee’s interests with the Firm’s long-term strategy and objectives. Bonuses are linked to both financial and non-financial criteria, rewarding behaviours that promote positive non-financial outcomes for the Firm and limiting eventual behaviours contrary to the Firm’s values. The bonus pool and other individual bonuses will be adjusted in consideration of any matters that adversely impact client outcomes. Any matters that adversely impact client outcomes will also result in claw back arrangements being invoked.

4.2 Conflict: Personal Account Dealing

Nature of conflict and measures: The risk arising is that staff who are party to privileged information concerning investments with which we deal may trade on information which is unknown to the client for personal gain. Personal investments are permitted strictly in accordance with the Firm’s Market Abuse Policy and Personal Account Dealing Policy. All personal account dealing must be reported to [and approved by] Compliance.

4.3 Conflict: Gifts, hospitality and inducements

Nature of conflict and measures: This covers the risk that any gifts, hospitality or inducement provided by a third-party may materially influence the service provided to the client. Any gifts or hospitality, given or received, are subject to the Firm’s Gifts and Entertainment Policy. This ensures that the firm has a record of gifts and entertainment of material value, and that where appropriate, they are subject to approval from the compliance department. The Firm operates an Anti-Corruption, Bribery and Fraud Policy prohibiting facilitation payments or kickbacks of any kind.

4.4 Outside business interests

Nature of conflict and measures: The risk that the Firm’s employees have outside business interests which may create a conflict with the interests of the Firm or its clients.

The Firm’s employees are required to declare any outside business interests. Interests that are considered to present a conflict are added to our Conflicts of Interest Register and are assessed for approval on a case by case basis by the board at inception and annually thereafter.

4.5 Conflict: Remuneration

Nature of conflict and measures: This deals with the risk that the Firm’s remuneration framework may encourage staff to take account of their own earnings from a potential transaction rather than the best interests of the client.

The Firm’s Remuneration Policy is designed to encourage responsible business conduct, to limit risk taking and avoid conflicts of interest.

4.6 Conflict: Segregation of duties

Nature of conflict and measures: This deals with the risk that a single person has the ability to initiate, process and control transactions. Where possible, the Firm mitigates this risk through clearly segregated management structures to ensure that decisions belonging to each key area of the business are made with independence. If extenuating circumstances result in an individual temporarily operating across more than one area of the business (e.g. combining front office and back-office responsibilities), the individual’s activities will be subject to enhanced monitoring and independent oversight.

5. Requirements for Employees

Employees are required to report potential conflicts of interest in writing to the Firm’s Compliance department as soon as practicable. To identify the potential conflicts of interest that require reporting, employees should take into account the information in Section 4 of this Policy. In particular, employees must consider whether the Firm, or an employee of the Firm:

is likely to make a profit or avoid a loss at the expense of meeting obligations to the client;

is aware of any situation where the interest of one client may conflict with those of another;

has an incentive, financial or otherwise, to favour the interest of one client or group of clients over another; or

could be in a position where the ability to act in a client’s best interests is potentially affected by any other matter.

6. Managing and Recording Conflicts of Interest

The Firm recognises its responsibility to identify and manage potential conflicts of interest and as such has several internal policies and procedures in place to counter this:

Personal Account Dealing Policy – setting out personal account dealing requirements applicable to relevant persons in relation to their own investments.

Privacy Policy – governing access to electronic data.

Gifts and Entertainment Policy – managing the registration of the solicitation, offer or receipt of certain benefits and to limit the giving or receiving of inducements.

If it appears for any reason that the conflict cannot be managed so as not to prejudice the best interests of the client, this will be disclosed.

In accordance with SYSC 10, the Firm annually carries out a review and maintains a record of the types of activity carried out from which a conflict of interest may arise.

7. Record Keeping

The Firm maintains a record of all activities where a conflict of interest has arisen or may arise.

8. Training and Review

All Firm employees are provided with annually renewed training on how to be aware of conflicts of interest and how to report any new or future conflicts.

9. Failure to Comply

Failure to comply with this Policy and procedures outlined above may result in disciplinary procedures being invoked.

10. Amendments to this Policy

The responsibilities contained within this document are reviewed on an annual basis and any changes made if appropriate. The Firm’s Conflicts of Interest Policy is available to clients upon request.