Conflict of Interest Management Policy
Nextury Asset Management Conflict of Interest Management Policy: principles, applicable measures and processes for the transparent management of conflicts of interest.
Chapter I
General Provisions
This Conflict of Interest Management Policy hereinafter referred to as the “Policy”establishes the procedure for identifying and managing circumstances giving rise to conflicts of interest at UAB “Nextury Asset Management” hereinafter referred to as the “Company” or the “Management Company”.This Policy also sets out the measures used to prevent potential conflicts of interest or, where such conflicts arise, to avoid their adverse impact on the interests of the Company’s Clients.
This Policy applies to the Company’s employees and other persons related to the Company.
The Policy shall be approved by the Board of the Company, while the Director of the Company shall be responsible for its implementation, monitoring compliance with the Policy and maintaining its effectiveness.
The Policy has been prepared in accordance with the Law of the Republic of Lithuania on Collective Investment Undertakings Intended for Informed Investors, as amended and/or supplemented, hereinafter referred to as the “LCIUII”, Resolution No. 03-144 of the Board of the Bank of Lithuania of 12 July 2012 “On the Approval of the Rules on the Organisation and Conduct of Activities of Management Companies”, and other legal acts applicable to the activities of management companies and collective investment undertakings.
Chapter II
Definitions
- the head of the Company, a person holding other similar duties or a person of similar status, or a shareholder who directly and/or indirectly holds a majority of votes or may directly or indirectly exercise decisive influence over the Company, as well as a person who provides the Company with services related to the management of a collective investment undertaking or whose significant part of income consists of income received from services provided to the Company;
- an employee of a collective investment undertaking or of the Company managing it, as well as any other person participating in the activities of the collective investment undertaking or in the management of the collective investment undertaking by the Company managing it, where that person’s services are provided on behalf of, and are controlled by, the collective investment undertaking or the Company managing it;
- a natural person who directly participates in the activities of a collective investment undertaking or in the activities of the Company managing it under an agreement on the delegation of certain functions, the purpose of which is to ensure that the collective investment undertaking or the Company managing it is able to carry out investment activities;
- the spouse, cohabiting partner, child or adopted child of the persons referred to in clauses 2.1.9.1, 2.1.9.2 and 2.1.9.3 of this section;
- a legal person related to the persons referred to in clauses 2.1.9.1, 2.1.9.2 and 2.1.9.3 of this section, whose head, member of the board or supervisory board is a person referred to in clause 2.1.9.4 of this section, or which is controlled by such a person, or which has been established for the benefit of such a person, or whose economic interests are equivalent to the economic interests of such a person.
Chapter III
Obligation to Avoid and Disclose Conflicts of Interest
The Company must take all necessary measures to identify Conflicts of Interest arising between the Company and other Persons Related to the Company and Clients, or solely between Clients, or between different collective investment undertakings managed by the Company or their participants, where such Conflicts of Interest arise in the course of the Company’s management of collective investment undertakings.
The Company must take all necessary measures to prevent potential Conflicts of Interest or, where such conflicts arise, to avoid their adverse impact on the interests of the Client.
Where the interests of the Management Company, a Related Person and Clients conflict, priority must be given to the interests of Clients. The interests of the Management Company shall be satisfied second, and the interests of the shareholders of the Management Company shall be satisfied third.
In the event of a Conflict of Interest, before providing services to a Client, the Management Company must clearly and understandably, taking into account the Client’s understanding of financial instrument markets, inform each Client in writing about the Conflict of Interest that has arisen and disclose to the Client the nature and source of the Conflict of Interest.
The written notice prepared for the Client must be printed in two copies, and one copy must be stored and managed by the Management Company in accordance with the applicable document management procedures in such a way that it can be reviewed immediately, if necessary. If new circumstances arise in relation to a Conflict of Interest of which the Client has been informed, the information provided to the Client must be updated. The Client must be informed of the changed circumstances in writing.
Information must be disclosed to the Client on a durable medium and must be understandable to each Client, so that the Client can make an informed decision regarding the service in relation to which the Conflict of Interest arises. The services of the Management Company may be provided to the Client only if the Client clearly expresses consent to the provision of the service in the presence of a Conflict of Interest. Client complaints shall be handled in accordance with the complaints handling procedure applicable within the Management Company.
An Employee or any other Person Related to the Company who notices circumstances that, in their opinion, may give rise to a Conflict of Interest, or where, in their opinion, a Conflict of Interest has already arisen, must take all necessary actions to eliminate the conflict so that the interests of Clients are not harmed, and must inform the Head of the Management Company and/or the person responsible for the compliance function thereof.
Chapter IV
Identification of Circumstances Giving Rise to Conflicts of Interest
When managing collective investment undertakings, there is a possibility that a Conflict of Interest may arise between: the Company and its Clients; Persons Related to the Company and Clients; one Client and another Client; several collective investment undertakings managed by the Company or their participants.
Minimum Criteria for Identifying Conflicts of Interest
In order to identify and determine Conflicts of Interest that may harm the financial interests of Clients and that may arise when the Management Company manages CIUs, the Management Company shall apply minimum criteria and assess whether the Management Company, a Person or Persons Related to the Management Company, fall within any of the situations listed below:
Conflicts of Interest may arise in the course of the Company’s management of Collective Investment Undertakings. The purpose of managing Collective Investment Undertakings is the long-term growth of the assets accumulated by the participants of such Collective Investment Undertakings. The decisions adopted by the Company must not be adversely influenced by:
The Company’s Clients seeking to issue or acquire financial instruments at the best possible price or to achieve their strategic objectives; the Company’s interests related to the management of its positions in financial instruments; the Company’s interests as a seller of financial instruments; the Company’s Employees seeking to enter into transactions in financial instruments on the best possible terms; improper timing or allocation decisions, where the manner in which transactions are carried out or allocated may be intended to give biased preference to certain funds or Clients at the expense of others.
When identifying types of conflicts of interest, the Management Company must take into account: the interests of the Management Company, including interests arising from its belonging to a group of companies or from the provision of services and performance of activities; the interests of Clients; the duties of the Management Company towards the CIU; the interests of two or more CIUs managed by the Management Company.
Chapter V
Management of Conflicts of Interest
Chapter V · Clause 29
More Common Cases of Conflict of Interest Management
Chapter VI
Data Retention
The Management Company must retain and regularly update data and information relating to the activities of the Management Company, the services provided, or certain collective investment undertaking management functions, or related functions, carried out on behalf of the Management Company, in relation to which a Conflict of Interest has arisen, or may arise if the provision of services and performance of activities has not yet been completed, and which may harm the interests of one or more Collective Investment Undertakings.
If the organisational and/or administrative measures taken by the Company to manage Conflicts of Interest are insufficient to ensure that the risk of harm to the interests of a Collective Investment Undertaking or its participants is avoided, the Head of the Company and/or the Compliance Officer must be informed immediately so that the necessary decision can be made to ensure that the Company acts, in all cases, in the best interests of the Collective Investment Undertaking or its participants.
Information about the situations referred to in Clause 6.2 of the Policy must be provided by the Company to Clients immediately on a durable medium, together with the reasons for the decisions adopted.
Chapter VII
Remuneration Received by the Management Company
The Management Company has the right to receive fees, commissions or non-monetary benefits. The Management Company is not entitled to receive financial benefits if this is inconsistent with the Management Company’s obligation to act honestly, fairly, professionally and in the interests of the Client.
The Management Company shall be deemed to act honestly, fairly, professionally and in the interests of the Client if any fee, remuneration or non-monetary benefit paid to it meets the following conditions:
- Such payments enable the management of Collective Investment Undertakings or are necessary for their management.
- The nature of the payments must not give rise to any conflict with the Management Company’s duty to act honestly, fairly, professionally and in the interests of Clients.
- The Client must be clearly informed in advance about such payment or other benefit, including its purpose, nature and amount.
- The payment or provision of a non-monetary benefit must be intended to improve the quality of the service provided to the Client and must not breach the Management Company’s duty to act in the interests of the Client.
Where the Management Company receives a financial or other benefit, other than a benefit related to the provision of services, from a person who is not the Client or the Client’s representative, the Management Company must inform the Client thereof before providing the relevant service to the Client. Upon the Client’s written request, the Management Company undertakes to provide the Client with all additional information related to the receipt of financial benefits by the Management Company, insofar as this relates to the services provided by the Management Company to the Client. For this purpose, proper informing of the participants of a Collective Investment Undertaking shall be deemed to include disclosure of information about the benefit received in the prospectus of the relevant Collective Investment Undertaking managed by the Management Company or in a similar informative document.
All internal arrangements within the Management Company, including payment or benefit arrangements with third parties, must be concluded in writing, reviewed and approved in advance by the Head of the Management Company. All such arrangements and related documentation must be retained for the period established by applicable laws.
If a payment or benefit arrangement or a payment to a third party is permitted, the Client must be informed thereof before the provision of the service begins. Such information must indicate the existence, nature and amount of the fee, commission or benefit. Where the amount cannot be determined, it is sufficient to provide information on the calculation method.
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Conflict of Interest Provisions in Other Documents and Final Provisions
The job descriptions and confidentiality undertakings of the Management Company shall provide that information related to Clients may be used and disclosed to third parties only with the Client’s consent and, in the absence of such consent, only where such disclosure is required by applicable laws.
This Policy shall enter into force on the date of its approval and may be revoked, amended and/or supplemented only by a decision of the Board. Amendments and/or supplements to the Policy shall enter into force on the day following the date of their adoption. The Head of the Management Company must ensure that the Employees of the Management Company are informed in a timely manner of any amendments and/or supplements to the Policy.
The Head of the Company must ensure that all Employees of the Management Company are introduced to this Policy against signature.