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Conflict of Interest

Information on handling conflicts of interest and general information for clients on contributions

 

Conflicts of interest cannot always be ruled out, especially with institutions that provide a variety of investment services for their clients and that also finance and advise companies. In accordance with the requirements of MIFID II and other regulations[1], we provide the following information on our extensive measures in place for addressing these conflicts of interest.

 

Such conflicts of interest may arise between our firm, other companies in our Group, our Managing Directors, our employees, contractors, intermediaries or other persons associated with us and our clients or between our clients.

 

Conflicts of interest may arise in particular:

 

  • in the area of Investment Advisory Services and Asset Management due to our own interest (including in terms of revenue) in the sale of financial instruments, in particular the Group’s own products;
  • when receiving or granting contributions from third parties or to third parties in connection with investment services provided to you;
  • in the use of our own funds in Asset Management;
  • through performance related remuneration paid to employees and intermediaries;
  • when granting contributions to our employees and intermediaries;
  • from other business activities of our Company;
  • from relationships of our firm with issuers of financial instruments, for example, in the case of a credit relationship, participation in issues and cooperation agreements;
  • in the preparation of marketing material with respect to securities offered for purchase to clients;
  • by acquiring information that is not publicly known;
  • from personal relationships of our employees or the Managing Directors or related parties; or
  • with respect to the participation of these persons in management boards or advisory boards.

 

To prevent irrelevant interests from influencing our advisory services, order execution, asset management or financial analysis, for example, we have committed ourselves and our employees to high ethical standards. We expect diligence and integrity at all times, and we expect all of our employees to act lawfully and professionally and to observe market standards while, in particular, always taking the client’s best interests into account.

 

 

Specifically, the measures we have adopted include the following:

 

  • the establishment of organisational procedures to safeguard the interests of clients in the areas of Investment Advisory Services and Asset Management, e.g. through approval procedures for new products;
  • rules on accepting and granting contributions as well as their disclosure;
  • the creation of zones of confidentiality through the erection of information barriers, the separation of responsibilities and/or spatial separation;
  • maintenance of an insider or watch list to monitor the volume of sensitive information and to prevent the misuse of insider information;
  • maintenance of a restricted list designed, among other purposes, to counter potential conflicts of interest by prohibiting business or advisory activities or financial analyses;
  • disclosure to the competent authority of securities transactions by any employees who may have a conflict of interest in the course of their duties;
  • employee training courses;
  • we will disclose to the clients concerned any conflicts of interest that cannot be avoided before concluding a transaction or providing advice;
  • direct crediting of contributions to the client’s custody account, to the extent already regulated by law.

 

Please note the following points in particular:

 

  • In Asset Management, you, as the client, have delegated the management and consequently also the decision on the purchase and sale of financial instruments to your Asset Manager. This means that we will take decisions on purchases and sales within the framework of the investment guidelines agreed with you, without obtaining your consent. This arrangement may exacerbate existing conflicts of interest. There may be a conflict of interest in deciding which funds to invest in if investments are made in funds whose fund manager or investment advisor is the Asset Manager. Within the framework of a mandate of this kind, the Asset Manager receives additional remuneration from the fund. We address the resulting risks through suitable organisational measures, in particular an investment selection process that is geared towards the interests of our clients. Independently of this, we will disclose to you the amount of the contributions before concluding an asset management agreement and provide an account of this information.

We will provide you with details and exact amounts upon request.

  • Another conflict of interest that is typical in Asset Management can arise when a performance-based fee has been agreed. In this respect, it cannot be ruled out that the Asset Manager may take disproportionate risks in order to achieve the highest possible performance and consequently to generate increased remuneration. Among the ways in which risk is reduced here is through internal monitoring of the investment decisions made and through the combination with other fixed remuneration components. A conflict of interest may also arise from the fact that we also provide Investment Advisory Services for funds in addition to Asset Management. In the context of Asset Management, investments are often made in funds for which we are the investment advisor. However, this is of course not a criterion for the selection and composition of the Asset Management.
  • Finally, we receive complimentary contributions from our service providers in connection with our securities business, such as marketing materials, training and, in some cases, technical services and equipment to access third-party information and distribution systems. The receipt of such contributions is not directly related to the services provided to you; we use such contributions solely to provide and continuously improve our services to the high standard you require.
  • We also provide information about relevant potential conflicts of interest in financial analyses that we prepare or distribute.

 

If we become aware of potential conflicts of interest, our employees are obligated to immediately inform the independent Compliance Officer.

After investigating the situation, the Compliance Officer will make proposals to resolve the conflict of interest in the interest of our clients, in consultation with the respective departments as well as the Management Board, where necessary.

The Compliance Officer shall maintain a register of potential and actual conflicts of interest and a register of contributions received from issuers and other service providers. The records are regularly reviewed and updated. Unavoidable conflicts of interest will always be resolved in the interest of the clients.

 

The foregoing statements are in compliance with our obligation under the Asset Management Agreement to disclose everything we receive under the Agreement.

 

Upon request, we will provide you with further details on these principles. Information on this topic is also available by telephone on: +352 24 69 35-0.