CONFLICTS OF INTEREST POLICY
JTC’S STATEMENT FOR CONDUCTING BUSINESS
JTC conducts its business in a manner that is consistent with its reputation, conducive to maintaining high standards of integrity in all its business dealings, whilst having the highest regard for the interests of all Clients. JTC is committed to complying in full with all legal, regulatory and other requirements in whichever jurisdiction it operates, adopting best practice wherever possible. JTC, in line with its Conduct of Business Policy, will manage all conflicts fairly both between itself and its Clients and between one Client and another.
From time to time JTC will face actual and potential conflicts of interest. It is JTC policy to take reasonable steps to maintain and operate an effective organisational and administrative structure in order that all actual or potential conflicts of interest are effectively identified and correctly managed.
JTC’s senior management team, with the assistance of the local Compliance Department, is responsible for ensuring JTC’s systems, controls and procedures are adequate to identify conflicts of interest.
This document applies to all areas of JTC business whether regulated or not and will be periodically reviewed, and if required updated, by the Risk Committee.
WHAT ARE CONFLICTS OF INTEREST?
Conflicts of interest are defined as a set of circumstances creating a risk that a decision or action which should be undertaken impartially or for the benefit of one or more others will be unduly or inappropriately influenced by a personal or other interest, direct or indirect, of the actor or will conflict with the interest or duty owed to another person.
This document applies to those conflicts of interest that may give rise to a material risk of damage to Clients’ interests where JTC, a director, officer or other JTC personnel:
- Is likely to make a financial gain, or avoid a financial loss, at the expense of a Client
- Has an interest in the outcome of a service provided to a Client or transaction carried out on behalf of a Client, which is separate from the Client’s interest in that outcome
- Carries on the same business as the Client
- Will receive or receives from another person an inducement in relation to the service provided to the Client, by way of pecuniary consideration, goods or services, other than a standard fee or commission for that service.
- A conflict of interest may typically be demonstrated by:
- Divided loyalties arising from multiple roles
- Diversion of an investment opportunity
- Investment allocation
- Preferential investment terms
- Financial incentives
- Managed entities
- Retrocession /commission based fees /performance fees.
WHERE MAY A CONFLICT OF INTEREST OCCUR?
In the ordinary course of business, JTC Group provides services to clients that may under certain circumstance potentially give rise to conflict and some examples have been listed below of situations that could give rise to a conflict and the parties that may be involved in a conflict. Where JTC Directors sit on the board of client companies that JTC provide other services to, typically administration services, then those Directors need to be particularly aware of the potential for conflicts within this policy.
Conflicts of interest typically occur between the following:
- JTC and an existing or potential Client and Client entities
- JTC and past Clients where a fiduciary or other duties remain in place
- A director, manager or appointed representative of JTC
- A director, manager of any appointed representative of JTC
- Two or more JTC Clients and Client entities where JTC provides its services to those Clients and Client entities
- JTC and its service providers (including, amongst others, those providing outsourcing facilities to JTC)
- JTC (as employer), JTC employees and directors.
The following situations might represent a conflict of interest:
- A JTC employee /consultant (or relative of the same) accepts a gift, hospitality or inducement from a Client structure
- A JTC employee /consultant operates their own business in addition to the role they carry out for JTC
- A JTC employee /consultant operates their own personal dealing accounts
- A JTC employee /consultant (or relative of the same) receives information that is not in the public domain but is likely to have a substantial impact on a listed security (refer to jurisdictional Market Abuse laws, orders and regulations, as appropriate)
- A JTC employee /consultant (or relative of the same) secures a personal loan, or financing of any description, from a Client structure, or from a Client
- A JTC employee /consultant (or relative of the same) arranging to make a loan, or to arrange financing of any description, to a client structure, or to a client
- JTC, or an employee of JTC (or relative of the same) co-investing with a Client structure, or with a Client
- A JTC employee /consultant (or relative of the same) providing a service to a Client structure, or to a Client, in a private capacity that is not associated with or connected to JTC.
- Acting as director or trustee for two or more structures under JTC administration in circumstances where a dispute or potential for a dispute arises between Clients
- Retrocession fee arrangements (including shared fee /commission arrangements) entered into by JTC.
The above lists should not be considered exhaustive and, if required, further guidance should be sought from the local Compliance Officer /Compliance Department.
IDENTIFYING AND MANAGING CONFLICTS OF INTEREST
All actual or potential conflicts of interest should be reported at the earliest possible time to a compliance officer.
The compliance officer, once notified, may consider no further reporting or action is required in respect of the following:
- Where, having considered the Articles of Association or Standard Tables of a company, a director gives proper notice, where required under the relevant Companies Law, of their direct or indirect interest in any transaction entered into or proposed to be entered into by a company or subsidiary company which to a material extent conflicts or may conflict with the interests of the company and of which the director is aware, and discloses the nature and extent of their interest to the board and the same is duly recorded in the meeting minutes of the company.
- Gifts of £50 or more (or currency equivalent) which are properly notified and recorded in the Gifts Register.
Where the compliance officer deems further reporting or action is required in addition to entering the conflict in the register, it will require the Risk Escalation Process be instigated by the relevant Business Area in order that bespoke measures to mitigate any risk to JTC are effectively carried out.
The Risk Committee will ensure the actual or potential conflict of interest is adequately recorded following the Risk Escalation meeting. As appropriate to the circumstances arising, this action will also entail recording the following:
- Disclosure of the actual or potential conflict to any affected existing, potential or past Client
- Maintaining an independent position
- Using /maintaining “Chinese walls”
- Withdrawing from discussions and the decision-making process
- Appointing an independent third party to take decisions
- Delegating the decision-making process to a dedicated sub-committee
- Using separate reporting lines for JTC employees /consultants on opposite sides of a conflict
- Separation of functions and review and reconciliation by other JTC employees
- Alignment of interest techniques
- Declining to act for an existing or potential Client.
Upon the determination by the Risk Committee of a selected course of action, the decided course will be made known to the affected JTC employee /consultant.
The affected JTC administered entity will be elevated to “High Risk” with the relevant JTC Registers updated accordingly and a note of the conflict of interest will be made on any Recommendations for Signing.
On an ongoing basis, any JTC administered entity subject to a conflict of interest must be periodically reviewed by the relevant Business Area and any action taken should be documented and monitored for compliance with the original Risk Committee decision.
It is essential the Risk Committee remains aware of, and authorises, all arrangements or transactions that might be regarded as representing a conflict of interest to JTC.
JTC respects the confidentiality of information it receives about its Clients. JTC has internal organisational arrangements which act as information barriers controlling the disclosure of information within JTC and preventing the unauthorised release of or access to confidential information. All disclosures made are on a need to know or properly required basis.
Confidential information is information received by JTC from its Clients, prospective Clients or other third parties and which is:
- Not in the public domain
- Judged to be sufficiently sensitive so that its release or disclosure is likely to cause its owner to suffer a disadvantage or loss.
For the avoidance of doubt, JTC must always treat information received from Clients to whom it owes fiduciary duties as confidential.
ASSOCIATED JTC POLICIES
The following JTC policies are also relevant to this document:
- Anti-Corruption and Bribery Policy and Guidance
- Retrocession Policy
- Staff Handbooks.
In certain jurisdictions, JTC’s regulators have issued guidance and /or rules regarding the handling of actual or potential conflicts of interest. Therefore, this document sets out the minimum standards that JTC is required to adhere to in order that it meets and /or complies with its regulators’ expectations in this regard.
This document is prepared in order that JTC meets best practise standards and is not intended to create third party rights or duties or to form part of any contractual agreement between JTC and any Client.