Section 3A (2) (a) the General Code of Conduct stipulates that every provider, other than a representative, must adopt, maintain and implement a Conflict of Interest Management Policy that complies with the provision of the Act. The policy is to provide for mechanisms in place at Intelligent Asset Minders CC T/A FinBofs.com (FinBofs.com) to identify, mitigate and manage the conflicts of interest to which FinBofs.com is a party. This Conflict of Interest Management Policy is designed as prescribed in Board of Notices 58 of 2010, which amends the General Code of Conduct for Financial Services Providers and Representatives published in Board Notice 80 of 2003, as amended by Board Notice 43 of 2008.
Objective of the Policy
In terms of the Financial Advisory and Intermediary Services Act 2002, FinBofs.com is required to maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to identify, monitor and manage conflicts of interest. FinBofs.com has put in place a policy to safeguard its client’s interests and ensure fair treatment of clients.
All providers, key individuals, representatives, associates and administrative personnel will commit to such policy and the processes will be monitored on an ongoing basis.
FinBofs.com keeps and maintains a register in which all actual or potential conflicts are recorded.
Mission Statement on Conflict of Interest
FinBofs.com is committed to ensuring that all business is conducted in accordance with good business practice. To this end FinBofs.com conducts business in an ethical and equitable manner and in a way that safeguards the interests of all stakeholders to minimise and manage all real and potential conflicts of interests. Like any financial services provider, FinBofs.com is potentially exposed to conflicts of interest in relation to various activities. However, the protection of our client’s interests is our primary concern and so our policy sets out how:
- We will identify circumstances which may give rise to actual or potential conflicts of interest entailing a material risk damage to our client’s interests.
- We have established appropriate structures and systems to manage those conflicts.
- We will maintain systems in an effort to prevent damage to our clients’ interests through identified conflict of interest.
Understanding the Definitions
Conflict of Interest
A conflict of interest may occur when, in rendering a financial service to you, we do not act objectively or do not render an unbiased or fair service to you or do not act in your interests, including but not, limited to:
- A financial interest
- Any relationship with a third party/business relationship
- An ownership interest
A Financial Interest
Any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, valuable consideration, other incentive or valuable consideration (exceeding R1000 per annum) other than:
- An ownership interest
- Training, that is not exclusively available to a selected group of providers or representatives, on:
- Products and legal matters relating to those products
- General financial and industry information
- Specialised technological systems of a third part necessary for the rendering of a financial service, but excluding travel and accommodation associated with that training
An Ownership Interest
- Any equity of proprietary interest for which a fair value was paid on acquisition other than such an interest held by a nominee
- Includes any dividend, profit share or similar benefit derived from such interest
Has the meaning assigned to it in the financial reporting standards adopted or issued under the Companies Act, 61 or 1973.
What we may Give and Receive
We confirm that we can receive financial interest from the aforesaid providers in the form of:
- Commission authorised under the Short-Term Insurance Act, 53 of 1998
- Fees under the aforesaid acts if these fees are reasonably commensurate to the service being rendered
- Subject to any other law, an immaterial financial interest
- A financial interest for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest is paid at the time of receipt thereof.
All employees receive a basic remuneration and a bonus dependant on individual performance and percentage over overall Company Profit, as set and measured by the Members and Managers.
Process and Internal Controls
Identification of Conflict of Interest
To adequately manage conflicts of interest we must identify all relevant conflicts timeously. In determining whether there is, or may be, a conflict of interest to which the policy applies, FinBofs.com considers whether there is a material risk of damage to the client, taking into account whether FinBofs.com or its representative or key individual:
- Is likely to make a financial gain, or avoid a financial loss, at the expense of the client
- Has a financial 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, group of clients or any other third party over the interests of 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 legislated commission or reasonable fee for that service.
Our policy defines possible conflicts of interest as, inter alia
- Conflicts of interest between FinBofs.com and the client
- Conflicts of interest between our clients if we are acting for different clients and the different interests conflict materially
- Conflicts of interest where associates, product suppliers, distribution channels or any other third party is involved in the rendering of a financial service to a client
- Holding confidential information on clients, which, if we would disclose or use, would affect the advice or services provided to clients
- We may only receive commissions authorised in terms of applicable legislation
FinBofs.com maintains an index of potential conflict risks, taking into consideration all business areas and income streams. The index is updated with all new conflicts identified, and to ensure completeness as reviewed on an annual basis.
All employees, including internal compliance offices and management, are responsible for identifying specific instances of conflict and are required to notify the Key Individual of any conflicts they become aware of. The Key Individual will assess the implications of the conflict and how the conflict should be managed and act impartially to avoid a material risk of harming clients’ interests.
Measurements for Avoiding and Mitigating Conflict of Interest
Create awareness and knowledge of application stipulations of the General Code of Conduct and relevant legislation relating to conflict of interest through training and educational material.
Ensure understanding and adoption of conflict of interest policy and management measures by all employees, representatives and associates.
Regular inspections of all commissions, remuneration, fees and financial interests proposed or received to avoid non-compliance.
Keeping a register of conflict of interest.
Once a conflict of interest has been identified it needs to be appropriately and adequately managed.
The Key Individual will assess each conflict, including whether the conflict is actual or perceived, and what the value of the conflict or exposure is and the potential reputational risk. Compliance and management then agree on the controls that need to be put in place to manage the conflict.
When there is no other way of managing a conflict, or where the measures in place do not sufficiently protect the client’s interests, the conflict must be disclosed to allow clients to make an informed decision on whether to continue using our service in the situation concerned. In all cases, where appropriate and where determinable, the monetary value of non-cash inducements will be disclosed to all clients.
We will publish our conflict of interest management policy in appropriate media and ensure that it is easily accessible for public inspection at all reasonable times. This will be placed on the company website www.finbofs.com.
We may decline to act for a client in cases where we believe the conflict of interest cannot be managed in any other way.
Ongoing monitoring of Conflict of Interest Management
This policy will be reviewed annually, and must be included in our annual FSB compliance report, containing details “… on at least the implementation, monitoring and compliance with, and the accessibility of the conflict of interest management policy.”
The Compliance Officer, Key Individual, or staff member in charge of supervision and monitoring of this policy will regularly monitor and assess all related matters.
Training and Staff
All employees and representatives are required to read this policy and to sign a statement to the effect that they have done so and fully understand the provisions of both documents and the application thereof.
Comprehensive training on the Conflict of Interest policy will be provided to all employees and representatives as part of general or specific FAIS training.
Training will be incorporated as part of all new appointees’ induction and refresher training provided on an annual basis.
The Key Individual will conduct ad hoc checks on business transactions to ensure this policy has been complied with.
The Compliance Officer will include monitoring of the Conflict of Interest policy as part of his general monitoring duties and will report thereon in the annual compliance report.
Non-compliance will be subject to disciplinary procedures in terms of The FAIS Act and employment conditions. This can ultimately result in debarment or dismissal as applicable.
Avoidance, limitation or circumvention of this policy will via an associate will be deemed non-compliance.
This policy will be reviewed annually and updated annually as necessary.
We confirm that we will not offer any financial interest to our key individuals or representatives for:
- Favouring quantity of business over quality of service
- Giving preference to a specific product supplier where more than one supplier can be recommended to a client
- Giving preference to a specific product of a supplier where more than one product of that supplier can be recommended.
With regard to existing third party relationships; being the product suppliers listed in our Disclosure letter, we confirm that any ownership interest or exclusive training, or any other circumstances, which could lead to a potential conflict of interest, shall be listed in relevant registers attached hereto.
FinBofs.com has implemented the registers below:
Annexure 1. Financial Interest Received
Annexure 2. Business Relationship
Annexure 3. Ownership Interest
Financial Interest Received: Member
Any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic or foreign travel, hospitality, accommodation, sponsorship, valuable consideration, other incentive or valuable consideration (exceeding R1,000 per annum) other than:
- An ownership interest
- Training, that is not exclusively available to a select group of providers or representatives, including:
- Products and legal matters relating to those products
- General financial and industrial information
- Specialised technological system of a third party necessary for the rendering of a financial service, but excluding travel and accommodation associated with that training.