1. This document embodies the Conflict of Interest Management Policy for THIRD WAY INVESTMENT PARTNERS (Pty) Ltd.
2. “Conflict of interest” means any situation in which THIRD WAY INVESTMENT PARTNERS or its representatives has an actual or potential interest that may, in rendering a financial service to a client influence the objective performance of his, her or its obligations to that client; or prevent THIRD WAY INVESTMENT PARTNERS or its representatives from rendering an unbiased and fair financial service to that client, or from acting in the interests of that client, including, but not limited to
i. a financial interest;
ii. an ownership interest;
iii. any relationship with a third party (“third party” means
a. a product supplier,
b. another provider,
c. an associate of a product supplier or a provider;
d. a distribution channel;
e. any person who in terms of an agreement or arrangement with a person referred to in paragraphs (a) to (d) above provides a financial interest to a provider or its representatives.)
3. The primary objectives of this Policy are:
i. To promote transparency and to avoid business-related COI;
ii. To ensure fairness in the interests of employees and THIRD WAY INVESTMENT PARTNERS;
iii. To document the process for the disclosure, approval and review of activities that may amount to actual, potential or perceived COI;
iv. To provide a mechanism for the objective review of personal outside interests.
4. THIRD WAY INVESTMENT PARTNERS is committed to ensuring that all business is conducted in accordance with good business practice. To this end THIRD WAY INVESTMENT PARTNERS conducts business in an ethical and equitable manner and in a way safeguards the interests of all stakeholders to minimize and manage all real or potential conflict of interest (COI).
B. Financial interest
1. THIRD WAY INVESTMENT PARTNERS or its representatives may only receive or offer financial interest from or to a third party as determined by the Registrar of Financial Services Providers from time to time, and as set out in Annexure A hereto.
2. “Financial interest” means any cash, cash equivalent, voucher, gift, service, advantage, benefit, discount, domestic and foreign travel, hospitality, accommodation, sponsorship, other incentive or valuable consideration, other than –
i. an ownership interest
ii. 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; specialized technological systems of a third party necessary for the rendering of a financial service; but excluding travel and accommodation associated with that training.
3. THIRD WAY INVESTMENT PARTNERS may not offer any financial interest to its representatives for giving preference to the quantity of business secured for the provider to the exclusion of the quality of the service rendered to clients; OR giving preference to a specific product supplier, where a representative may recommend more than one product supplier to a client; OR giving preference to a specific product of a product supplier, where a representative may recommend more than one product supplier to a client.
C. Mechanisms for identifying COI
Immediate declaration of conflict to an advisory board consisting of all employees of THIRD WAY INVESTMENT PARTNERS, its shareholders and its investors, that is the investors in the fund it manages TWIP Core Plus Fund 1.
D. Resolving COI
The first and most important line of defense against COI or commitment must be by the key individuals and representatives themselves.
Vote by management on whether existing COI is acceptable or not. If not acceptable COI must be removed.
E. Potential COI that could affect Third Way Investment Partners (Pty) Ltd
The following are potential COI that could affect THIRD WAY INVESTMENT PARTNERS:
i. Directorships or other employment;
ii. interests in business enterprises or professional practices;
iii. share ownership;
iv. beneficial interests in trusts;
v. personal Account Trading;
vi. professional associations or relationships with other organizations;
vii. personal associations with other groups or organizations, or family relationships;
viii. Front running;
x. Kickbacks; and
F. Measures to Avoid COI
COI advisory board.
G. Disclosure of COI:
1. At the earliest reasonable opportunity, THIRD WAY INVESTMENT PARTNERS and its representative must, in writing, disclose to a client any COI in respect of that client including –
i. Measures taken to avoid or mitigate the conflict;
ii. Any ownership interest or financial interest that the provider or representative may be or become eligible for;
iii. The nature of the relationship or arrangements with a third party that gives rise to a COI in sufficient detail to enable the client to understand the exact nature of the COI.
2. Notification of an actual or potential COI should be made to a person with responsibility for the issue or area, such as the relevant management team, supervisor, head of the department or key individual.
3. In accordance with an employee’s obligation to act in the best interest of his or her employer, it is not permissible for employees to engage in conduct that would amount to a COI with THIRD WAY INVESTMENT PARTNERS.
4. Staff that fail to disclose a potential or actual COI in accordance with this policy may be liable to disciplinary procedures as governed by relevant industrial awards or agreements.
H. Processes, procedures and internal controls to facilitate compliance with the policy
1. Every staff member must have a copy of the Conflicts of interest Management Policy.
2. If a potential COI arises, the transaction must first be discussed with management before entering into the transaction.
3. Management must approve any COI transaction before any staff member can execute.
I. Consequences of non-compliance with the policy by the provider’s employees and representatives
Non-compliance with this policy and the procedures described in it may be considered to be misconduct and employees may be subject to disciplinary action that may lead to dismissal.
J. List of all Third Way Investment Partners Associates
K. Names of any third parties in which the provider hold an ownership interest
L. Names of any third parties that holds an ownership interest in the provider
M. Include the nature and extent of the ownership interest referred to in paragraphs K and L
The third parties are shareholders of the Provider.
Annexure A – Financial interest
The Registrar of Financial Services Providers issued Board Notice 58 of 2010 (BN 58) under section 15 of the Financial Advisory and Intermediary Services Act, 2002 (FAIS). BN 58 amends the General Code of Conduct for Authorised Financial Services Providers and Representatives under FAIS and determines that a financial services provider or its representatives may only receive or offer financial interest from or to a third party as follows:
i. Commission authorised under the Long-term Insurance Actor Short-term Insurance Act;
ii. Commission authorised under the Medical Schemes Act;
iii. Fees authorised under the Long-term Insurance Act, the Short-term Insurance Act or the Medical Schemes Act, if those fees are reasonably commensurate to a service being rendered;
iv. Fees for the rendering of a financial service in respect of which commission or fees referred to in sub-paragraph (i), (ii) or (iii) is not paid, if those fees –
aa. are specifically agreed to by a client in writing; and
ab. may be stopped at the discretion of that client.
v. fees or remuneration for the rendering of a service to a third party, which fees or remuneration are reasonably commensurate to the service being rendered;
vi. subject to any other law, an immaterial financial interest*; and
vii. a financial interest, not referred to under sub-paragraph (i) to (vi), for which a consideration, fair value or remuneration that is reasonably commensurate to the value of the financial interest, is paid by that provider or representative at the time of receipt thereof.
* “immaterial financial interest” means any financial interest with a determinable monetary value, the aggregate of which does not exceed R1 000 in any calendar year from the same third party in that calendar year received by –
a) a provider who is a sole proprietor; or
b) a representative for that representative’s direct benefit;
c) a provider, who for its benefit or that of some or all of its representatives, aggregates the immaterial financial interest paid to its representation.
|Name of Key Individual / Representative||Date on which gift was received||Source of gift||Type of gift||Value of gift|